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TOPIC: For Those With 3-D

For Those With 3-D 03 Apr 2010 17:10 #33684

  • Larry Thomas
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Need to know if the extra added on to the 3-D ticket for glasses etc. is supposed to be reported to the filmcos as part of the total ticket price. Just had an account add a Technicolor 35mm 3-D system, and he thinks it's not accountable as part of the ticket price, since it's supposed to be for lens rental. Being a dyed-in-the-wool cynic, I'm thinking he's in error.

Any enlightenment appreciated.
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Re:For Those With 3-D 03 Apr 2010 18:46 #33685

  • leeler
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Larry, when reporting to the 3D company you're supposed to report what the customer gave you. That's how it was explained to me. We have RealD and they get fifty cents a ticket and I just send them the same report I send the studio and then mail out a check.
"What a crazy business"
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Re:For Those With 3-D 03 Apr 2010 18:47 #33686

  • rufusjack
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It is my understanding that it is included in the ticket price and therefore the studios collect more. Which is one reason why they (studios, in this case) are paying for the glasses in the tech system.
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Re:For Those With 3-D 03 Apr 2010 20:42 #33688

  • sevstar
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The amount paid by the customer at the box office. Is the amount reported to the filmcos. That is why they are all rushing to get 2D films converted to 3D. They are loving that extra gross they get a cut of.
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Re:For Those With 3-D 03 Apr 2010 23:47 #33690

  • rufusjack
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We really wanted to only charge a $1 more for 3d, but the economics of it does not make sense. Especially when you consider you are probably paying more than average as you are playing the bigger grossers. So you need to at least charge $2. In the case of Real3d, you lose money by only charging $1 more ($.50 to Real3d and $.55-$.62 to the studio).

I am working on some digital/3d numbers and hope to post them soon for everyone's input.
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Re:For Those With 3-D 05 Apr 2010 05:13 #33692

  • BWT
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@sevstar:

Well, economically speaking it only makes sense for them to do this. With the average cost of a stereoscopic post-production conversion currently running at ~$5 million for a pic like 'Clash of the Titans', they'd be crazy not to convert them.

If you assume about a ~70% mix of 3D vs 2D tickets (which is in line with most of the 3D product to date since 'Monsters vs Aliens' in '09) and a modest ~30% premium to the 2009 NATO average ticket price (which is low given you're adding a $3 surcharge to a $7.50 avg ticket), then converting a film to 3D pays for the conversion cost in the first weekend of debut typically. Over the life of the film, the studios can add slightly more than ~20% to the domestic gross from conversion alone.

I know this is working with national gross box numbers, but a prime example would be 'How To Train Your Dragon' which had ~$10-11 million (~22-25%) added to its first weekend gross due to the 3D ticket mix and associated surcharges. It's tough to argue with the money when for a given film you're seeing 20-25% of its screens grossing 50-65% of its box office dollars.
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Re:For Those With 3-D 06 Apr 2010 10:01 #33702

  • Barry Floyd
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While I don't run 3D at my theatre, I spoke with another theatre owner last week who posed the same scenario.

In his case, he wanted to raise the ticket price BECAUSE it was 3D, then charge the customers EXTRA (on top of the ticket price) for the glasses that were sent to him by the studios via Technicolor. He asked me whether I thought the charge for the glasses would be subject to film rental.

I told him in MY OPINION, as a customer coming specifically to your theatre to watch a 3D movie, and you're going to charge me extra BECAUSE it's in 3D - it better include the glasses in the cost of admission. Once again, in MY OPINION, I told him, "You can't really SELL the glasses, since technically they're not yours to sell in the first place." If you cannot see the 3D effect without purchasing the glasses extra, then the actual admission price would be whatever he charged for the admission plus the extra charge for the glasses - all subject to film rental.

His response was, "Then how am I supposed to recoup the $2,000 cost of the 3D lenses from Technicolor for each print?" I responded back to him... "That's just the cost for doing business." If he really wanted to recoup the cost of the $2,000 surcharge, he needed to raise his ticket prices enough that whatever was his take after film rental would be sufficient to cover it. Once again that was just MY OPINION.
Barry Floyd
Floyd Entertainment Group
Lebanon, Tennessee

Stardust Drive-In Theatre
Watertown, Tennessee
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Re:For Those With 3-D 08 Apr 2010 08:11 #33714

  • Narrow Gauge
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I have said this a couple of times and beleive it to be true: Offering 3D is an upgrade to your theater like new bathrooms, stadium, digital sound etc. While yes the numbers have to make a certain sense, i didn't obsess about recouping every last penney in the pro forma. What some are missing also is the tax implications of spending 75k on a projector which falls under a section 179 deduction. Lets say I pay 25% in taxes annually this purchase of the projector will save me close to 20 thousand in state/federal taxes reducing the net cost of the projector. Further if you beleive as i do that the current admin is going to put the hammer to business these section 179 deductions are likely to change drastically-2010 may be the last chance to fully take advantage of the large 179 deduction as it now stands. This is why I bought one digital projector in 2009 and another three weeks ago.
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