Read it here first: The Multiplex Under Siege

Back in July, we discussed the 7 reasons why movie theatre attendance was declining.

If you blinked, you may have missed the WSJ’s holiday weekend take on the issue — The Multiplex Under Siege — including what some theater owners are belatedly attempting to reverse the trend:

"With attendance down and movies popping up faster on DVD, theater
chains are scrambling to pry you off the couch — trying everything
from discount tickets to curbs on rude patrons. Their fight to stay
relevant in the flat-TV era . . .

The big theater chains say they’re aware of the industry’s problems and are taking steps to make cinemas more appealing. They’re planning to improve picture quality with new digital projection systems and clamp down on rude audience members with more roving ushers — they’re even looking into jamming theatergoers’ cellphones. At the same time, shrinking attendance makes it more critical than ever to eke the most dollars from each customer. And some of the primary options there — increasing revenue from concessions and preshow advertisements — risk turning consumers off more."

One of the things that caught my eye int he article was  this line: "We have to be creative, and attack the concerns that our patrons have raised with us," says John Fithian, president of the National Association of Theatre Owners.

Here’s my gift to the theater owners: Before each movie, stage some guerilla theater. Roll a fake preview clip, and then 30 seconds into it, have  an audience plant cell phone ring LOUDLY in the theater. Stop the clip, partially raise the house lights, and then put a spotlight on the offender. Have two ushers confront the guy out — he’s wearing makeup and a corny outfit (i.e, zoot suit), so it looks real campy — but have the goons drag him out, kicking and screaming. It should be both theatrical and real looking.

People would talk about this for months. 


Here’s how the Journal rated the theater going experince at a variety of chains:



The Multiplex Under Siege
(with Bruce Orwall and Peter Sanders)
WSJ December 24, 2005; Page P1

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What's been said:

Discussions found on the web:
  1. TOMBOT commented on Dec 27

    I don’t really buy it. DVDs, Netflix and PPV have changed a few things, but on the face of it nothing looks disruptive enough to force a sea change in the movie business. I still go to the theater as often as I ever have, like most of the people in my generation; some attendance by baby boomers has probably fallen off, but not much.

    A good look at the “this is a non-story” perspective:,1,16837,00.html

    Ebert mentions similar details in his Answer Man column today.

  2. JimMNy commented on Dec 28

    Why are movie theaters hurting?
    1. Competition; 2. Cost squeeze; 3. Piracy effects;
    4. Content?

    1. Competition – What competes for our leisure time?
    Before WW2 the choices were movie or a live show.

    Then came…
    b&w TV
    Color TV
    analog cable
    Pay per View, HBO (expanded programming on cable)
    electronic games (handheld & TV connected)
    DVDs & Big screen TVs
    digital cable & High definition
    Big FLAT panel TVs (Gorgeous images at last!)

    Other competition for our leisure time:
    A. PCs & Internet for browsing, gaming, video etc.
    B. Youth Sports – At least here in Minnesota not only have the girls joined sports in huge numbers but a greater % of boys participate as well.

    2. Cost squeeze at the theaters.
    Think about why the multiplex came to be. One reason- to be an entertainment magnet the other was staff productivity – one projector operator and food sales cover many films with staggered start times.

    Hollywood gets/keeps a HUGE portion of ticket sales. Without food sales the theaters would simply close. This is why we get so many adverts. They need the money. Look at the financials. Theaters lose money.

    Perhaps as digital projectors cause the $1 billion cost of the film prints to go away Hollywood will share a bit more with the theaters. (perhaps they won’t)

    3. Piracy effects – To combat piracy (the dude with the video cam under his jacket in the 10th row) Hollywood went from rolling worldwide release to simultaneous releases. This causes a huge increase in the number of film “prints” that have to be made by opening day. In the old days prints from the USA were processed with subtitles and shipped overseas 6 months or more later.

    This is also why the DVDs are RUSHED to market. To close the opportunity window for sales of the pirated DVDs made by that guy in row 10 of the theater.

    Thus the Exclusivity of having seen the movie in a theater and being able to discuss it with friends and at work only lasts weeks rather than a year or more.
    More folks can choose to wait because they can see it soon anyway.

    4. Content varies but is quite good overall.

  3. meta-roj blog commented on Dec 28

    drama in the theater?

    i can’t take any credit for this one, but it’s a brilliant idea… Read it here first: The Multiplex Under Siege [the big picture, barry ritholtz]Here’s my gift to the theater owners: Before each movie, stage some guerilla theater. Roll…

  4. meta-roj blog commented on Dec 28

    drama in the theater?

    i can’t take any credit for this one, but it’s a brilliant idea… Read it here first: The Multiplex Under Siege [the big picture, barry ritholtz]Here’s my gift to the theater owners: Before each movie, stage some guerilla theater. Roll…

  5. Jim Rockford commented on Dec 29

    JimMNy —

    I agree with all but content. Look at how people show up for Spider-Man, LoTR, movies that present tradtional stories. With traditional heroes. And Traditional villains. Good guys win.

    Hollywood forgot it’s core business: ENTERTAINMENT. LA Times has a Calendar Section story (dead tree edition) about how “clever” Hollywood has been by not presenting “tradtional love stories” but “boy-meets-boy,” “ape meets girl,” and “girl longs for businessmen and ends up alone.”

    The decline of the female-skewing romantic comedy is not hard to fathom; women don’t have fun proxies who win the day and get the guy; and the same for the male side of things with action movies.

    I guarantee that movies like Die Hard or Princess Diaries if made today would find great audiences, the problem theater owners have is that their suppliers Hollywood is uninterested in making movies audiences like. Having ridden the TV sales and DVD revenue money train for so long.

    However, “Bewitched” went straight to the bargain bin at $8 (compared to $11 per person at the movies) suggesting that the money train there is ending too.

    Really it’s a Studio Management problem. Guys like Angst Lee or even Steven Spielberg are great technical movie makers but have no clue about what ordinary people want and like. They don’t understand the audience wants to be taken away from it’s cares for an hour and half to two hours; and has as you point out many other alternatives when Hollywood fails to deliver on that need: Sports, video games, the internet, etc.

  6. Jim Rockford commented on Dec 29

    I’ll add one more thing. Content of movies reflects a balkanized culture in what MUST be a mass-market medium.

    Even a “small” movie costs around $40-60 million to make and another $15 million to market; add in another $15 million or so for DVD marketing and about $6-8 million for foreign marketing and expenses, and you are around $76 to $98 million of costs to cover.

    Unless somehow investors don’t want to make money any more, either you have “small” movies aimed at the mass audience or you lose money even with those films. So far Hollywood has ignored basic reality with all the easy TV sales and DVD money rolling in and neglected core profitability by making movies that lose money. There’s only so many times you can con suckers into financing “Monster” or something.

    Suggesting that the cultural balkanization with audiences chopped into tiny little chunks is not very profitable when your costs are so high. I believe that most theater chains will simply go out of business since their leverage with suppliers is pretty low (Hollywood can sell direct to DVD or pay-per-view); even digital projections have issues (basically, paying for the systems which aren’t cheap).

    The Edwards bankruptcy should have been a wake-up call but wasn’t.

  7. Barry Ritholtz commented on Dec 29

    Yes, but the right movie — well written, good story, well developed characters — can find an audience.

    Bewitched was a great idea, poorly executed — it went off the rails half way thru.

    And films like Die Hard worked because the characters were so well received — Bruce Willis was extremely likable as John McClane.

    The idea behind the Long Tail is that collectively, balkanized products make up a huge market . . .

  8. JimMNy commented on Dec 29

    Regarding point 4
    I arrived at my statement in point 4 above with little thought or experience.

    Film-going in recent years: Jurassic Park, Toy Story, Terminator II, Harry Potter films, Star Wars films, LOTR films and smaller stuff like Amelie. All quite good.
    TV – pick and choose with no regular shows these days.

    Perhaps shows based upon real books do better/are better than shows for which a “book” was churned out as a companion piece. But then there are lousy films based upon great books. I had a housemate in my college era who wrote plays and now writes for TV. He could pound out a script in 2-3 days on a typewriter. Nothing great but there it was.

    Perhaps when there were fewer outlets for creative works (theaters of old vs. multiplexes + cable channels of today) only the best made it. Now there is such a huge need for “stuff” to fill all the screens and channels that there is much more stuff that is modest or weak.

    To give a better answer for point 4 would require information I don’t have.
    I have not read any study that attempted to assess to overall Quality-Worth of the current mix of films compared with earlier times.
    AND then compare that quality-worth level with a similar measure for the competing venues of TV/Internet/Gaming etc.

  9. Karmakin commented on Dec 29

    Never underestimate the impact of gaming on these things. The dollar value per entertaiment hour ratio is just insanly hight for those things, especially when you get into game renting and used game sales. Rent a game, play it on average for 10 hours a week, that’s about 70 cents an hour? A DVD, 2 hours, you’re talking 2.50 or so.

  10. Karmakin commented on Dec 29

    One further point on that. World of Warcraft, an online RPG, currently has an active subscriber base of about 5 million. Who are each ponying up about 15 bucks a month in fees.

    That’s about 75 million out of the entertainment pool on a monthly basis.

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