Friday, July 14, 2006

How to make money by giving Movies away!

Poll Shows Moviegoers Are Big DVD Buyers
A poll of moviegoers indicates that 83 percent of those who see ten or more movies per year in theaters also "frequently" or "sometimes" buy the DVD of many of the same movies, the New York Times reported today (Monday). The study, conducted by Nielsen Entertainment, concluded that seeing movies in the theater and at home "are not mutually exclusive occurrences" and appears to boost arguments by theater owners that they would be harmed significantly if movies were released in theaters and on DVD simultaneously. Thirty-six percent said they would skip the multiplex if that were to occur.
It seems as though this survey was designed to answer a question that's been on every theater owner's mind: Will our lives be ruined if DVDs come out at the same time as new movies?

Apparently 36% of people buying DVDs and saying they'd skip the movie is a cause for alarm. And it may well be. But let's take a quick break from the red alert and think about the other things that this survey is suggesting.

86% of people that watch movies frequently buy DVDs. I doubt this is anything new, but I think this fact has got to be making studio exec's eyes roll with dollar signs. I can testify to the fact that buying DVDs is WAAAAY more addictive than going to the movies (in fact movie theaters could learn a thing or two about trophy collection and presentation, but let's focus).
1.) There's more of a selection,
2.) the value proposition is much better, you get to keep the DVDs and watch them as many times as you want -- even though you probably don't
3.) You can do it on (mostly) your own time, and always if you count online shopping (which you should)
4.) You can handle multiple movies at once -- rather than having to queue up another one while you watch the first, you can just bring both home and never watch either!
5.) You have way more to show for owning than you do for just going, you have a COLLECTION. It looks pretty on your shelf, it impresses your friends and colleagues, it gives you excuses to invite that cute girl over.

If 86% of the people who get hooked on going to the movies, are hooked on buying DVDs, imagine if MORE people went to the movies! It's no secret that DVDs are outpacing ticket sales for lots of movies, in a lot of cases DVD sales are the reason movies can make back their production costs.

So if DVDs are the cash cow, why not completely fold theatrical release into the marketing effort. Give away the screenings at theatrical release and make everyone happy!

In a perfect world, the theaters could keep selling tickets to the people who are buying them and just give away the free shows to the remainder of the people and lure all but 14% of them into buying DVDs. Price selection, I believe they call it.

Of course, the 200+ million that Pirates took in on opening day is nothing to scoff at. There's certainly money to be made there. Theaters could charge for the advance sale of tickets for really popular movies and split the revenue with distributors like they're already doing. This should make everybody happy. The people buying tickets at least know what they're buying. A really good movie might be sold out in advance the entire time it's in theatrical release. But if nobody's buying, than the free tickets should allow the theaters to recoup those costs through DVD sales. I see everybody winning.

And none of this takes into account, the extremely important fact that, more people can afford to start making movie watching a habit. And habits are what drive this business (and from a personal standpoint, they're also what makes moviewatching fun).

The share of DVD sales vs ticket sales would certainly be a useful number here, but it may not even be necessary. This model optimizes all the things that make movie going good. For the studios it makes filmmakers want to make a movie really good to get people to actually pay for it, while giving them a decent escape route if most people think it stinks. Then the theater owners can still sell popcorn to full houses, even if Hollywood is in a temporary funk. The people only have to pay for the reserve seats to the really good movies and in the mean time can try out a bunch of less popular movies that they may like and the studios will make that money back in DVD sales.

It should even reduce piracy for the crappy movies, because why pirate it when you can watch it for free?

The big selling point for this, is that I think everyone stands to make more money while really improving the movie watching experience for the people that fund it all: the moviegoers.


At 12:53 PM, Anonymous Anonymous said...

Where is this study?


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