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TOPIC: added fee charge for digital?

added fee charge for digital? 05 Mar 2012 17:37 #37990

  • Mike
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We're looking at everything to pay for the digital upgrade. Then we said: they charge an uptick for 3-D, why not for digital? We've been messing around with a plan to transfer the cost to our 60K yearly customers. What do you think?
Michael Hurley
Impresario
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Re: added fee charge for digital? 05 Mar 2012 17:48 #37991

  • rufusjack
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It can be justified if you are doing some other upgrades too. like sound, decor, more efficient lobby, better seating, etc. But.....the theaters in my area that comp the best are those that have relatively low ticket prices. FWIW
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Re: added fee charge for digital? 05 Mar 2012 18:16 #37992

  • JPRM
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I don't have any problem with a business raising prices when it needs to. But if you're asking if there's any difference, you have to look at it the way your paying customers do.

Digital in and of itself offers no benefit of any sort to the customer. You're asking people to pay more for the same experience you gave them previously with 35mm. Also, 3D costs a customer more when the customer chooses to pay for it. If you up your ticket price for digital, it's permanent.

No fair comparing digital to scratchy 35mm prints, by the way; that's not apples to apples. Anyway, I say operators should do what they need to do to survive, but don't expect customers to thank you for the better picture. VERY few of them will notice any difference.
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Re: added fee charge for digital? 05 Mar 2012 18:35 #37993

  • lionheart
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I don't think you should have an upcharge for digital, at least not in an obvious way. You shouldn't have film running in one room and then digital in another, and then post that the 2nd movie is $2 more because it's digital. I do think you could raise your prices across the board by a reasonable amount, as long as they are competitive and reasonable. When people ask you why, the answer is the higher cost of doing business. Everything is going up and upgrades and upkeep costs lots of money. The only problem with an increased ticket price is that the distributors get their cut of that (whether or not you call it a digital surcharge), so you can't direct all of it to pay off your new equipment. They cause you to have to spend lots on new equipment, and you have to pay them more for the privilege.

"Thanks you sir, may I have another."
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Re: added fee charge for digital? 08 Mar 2012 23:17 #38009

  • BECKWITH1
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Mike,
I hear and feel the pain. We've watched, listened and learned through this forum for many years now knowing all along that our theater was very unlikely to make the jump. However, miracles sometimes happen :)

Our situation is different from yours but I have often wondered if the small town that is going to lose it's movie theater would care enough to pay at little more for tickets if they are faced with the facts and made a part of the process. I will put my little idea out there and see if anyone can make it work. I don't think that digital really means anything to customers and charging extra for it just feels like the gouging that has been going on with the 3D. I think that people will accept a price increase for digital if you can separate out the amount that you need to make it work and tell them that the extra .50-1.00 is going to fund the digital equipment. Then follow that up with a display in the lobby showing them how it is progressing. Something like the United Way campaign thermometer. If you have a newsletter then put it in there also. You need to make them feel like they have a part in it too. Obviously this is a long term program something like 5 - 7 years or so depending on how your payments work and it will be hard to keep it fresh and involved unless you add something like a monthly or quarterly drawing for something like a free movie night for 4 with free concessions for the winning ticket. Give a drawing ticket to each ticket buyer and have them put it in the box on the way into the theater. Make sure that they know that this program is because they are paying the extra amount for the digital equipment and you are thanking them for their frequent and continuing patronage. Post pictures of the winners in the lobby with the digital campaign thermometer. You could also invite the winning ticket holders to choose a free poster out of your large stock of used movie posters as an added incentive. Your local newspaper could be used to intially explain the dilemma that you find yourself in. You live in and are part of your town so you had better be as honest and plain in how you describe the problem as possible. It helps if you are not driving around town in a Lamborghini also.
OK I'm done. I hope somebody can build on this and save their theater. I can't - I think that we have 6 - 9 months left probably. BTW - Mike - I have wanted to say thank you for some time for providing Bigscreenbiz. It has been my best source of information on the digital divide and has helped us not make some mistakes. Hope I can help somebody else.
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Re: added fee charge for digital? 09 Mar 2012 05:45 #38011

  • slapintheface
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If you have no competition I would raise the price and if someone asks -- then I would say its for the new digital facility.. Get the local papers to do a story on digital once its in.
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Re: added fee charge for digital? 09 Mar 2012 15:58 #38012

  • RoxyVaudeville
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In regards to what Beckwith said, keep in mind that any additional charge that one would be required to make as part of a ticket purchase, would be subject to film rental percentage. Therefore, if you added 50 cents or a dollar to the admission to cover digital projection cost, 50% (or whatever your % is that week) will go to the film company.

Isn't that just wonderful. The studios force you to spend a huge amount of money to convert, won't give you VPFs, and then when you try and recover the cost from your patrons, take possibly half of it for themselves. If you check your master contract agreements you will see that any service that's paid for as a prerequiste to seeing the movie, whether it's for parking, sitting in the balcony or whatever, you must pay film rental on those amounts as well.

Don't you just love this business?
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Re: added fee charge for digital? 09 Mar 2012 17:25 #38013

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RoxyVaudeville wrote:
won't give you VPFs,

Don't you just love this business?

You make money for the studio, they will give you the VPFS. Make them little to no money and they will not. Why should they?
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Re: added fee charge for digital? 09 Mar 2012 18:46 #38015

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You make money for the studio, they will give you the VPFS. Make them little to no money and they will not. Why should they?

But there in fact is the problem, that is not what they are doing. I've argued this point before. VPFs are not based on now much money you make for the studio, but rather by your run. If you are first run, but don't gross much and thus pay little film rental, you can get VPFs. If you are 2nd run and gross a lot and pay more dollars (not %)you are not eligible for VPFs.

My 2nd run single screen theatre that plays anywhere from 5 to 10 weeks behind national release often at 35% pays more film rental then some 1st runs in my area even gross on a film. There are a number of small town first run plexes in my part of the state that with 3 or 4 screens don't gross with all their screens combined what I gross with just one picture on my single screen. I literally pay 3 to 4 times as much film rental as they do, but am not eligible for VPFs.

Is that fair?
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Re: added fee charge for digital? 09 Mar 2012 20:26 #38016

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For as long as I have been in this business the studios have never cared for (or been fair to) second run theatres.

Sure the studios will take the film rental generated by second run theatres but beneath the surface remains the nagging belief by the studios that if the second run market were to completely disappear then most of that second run business would then go to the first runs.

This same logic applies in the bit torrent piracy arena: that every illegal download represents a ticket or video sale lost. A recent study has shown the fallacy of that belief as well:

www.geekosystem.com/bittorrent-box-office-study/
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Re: added fee charge for digital? 10 Mar 2012 20:13 #38023

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RoxyVaudeville wrote:
You make money for the studio, they will give you the VPFS. Make them little to no money and they will not. Why should they?

But there in fact is the problem, that is not what they are doing. I've argued this point before. VPFs are not based on now much money you make for the studio, but rather by your run. If you are first run, but don't gross much and thus pay little film rental, you can get VPFs. If you are 2nd run and gross a lot and pay more dollars (not %)you are not eligible for VPFs.

My 2nd run single screen theatre that plays anywhere from 5 to 10 weeks behind national release often at 35% pays more film rental then some 1st runs in my area even gross on a film. There are a number of small town first run plexes in my part of the state that with 3 or 4 screens don't gross with all their screens combined what I gross with just one picture on my single screen. I literally pay 3 to 4 times as much film rental as they do, but am not eligible for VPFs.

Is that fair?

Roxy,
As we have discussed those theaters will be in a crappy position once they have signed the ir VPF agreements. They will be only first run half of the year (summer, holidays, and. Few bigger movies in the spring) and then be 7 weeks old the other half of the year. As things stand now, the only first run theaters that should be getting VPFs are those that seldom gross less than $3000 a movie (when looking at movies you are likely to play).

If you are grossing $4000+ on a movie, have you thought about playing movies at 5 or 6 weeks? If you are paying $1300-$1500 in film rental you shoud not have problems getting movies then even with VPFs. I notice you are playing many movies out on DVD now. I would think you would have to stop doing that as we have already shared stories of studios wanting you to play DVD or blu ray than digital.
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Re: added fee charge for digital? 11 Mar 2012 01:25 #38024

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rufusjack

Obviously things are done differently in different parts of the country. The small town small plexes (3 to 6 screens)that I'm talking about play on national release ALL the time. They are not seasonal. Yet they seldom gross $3000 a week per movie, in fact they seldom gross $2000 per week per movie. Are you saying that these theatres will have a problem getting VPFs? I really don't know as they are not my theatres and I'm not privy to what they are negotiating.

You asked if I have thought about playing movies that are 5 to 6 weeks old rather then the 5 to 10 weeks (or more)that I now play. Of course I have thought about it, but I can't without raising my ticket price (now $3.00 all seats) and having to play more pictures a minimum of 2 weeks. I'm in a very competitive market with many large chain multi-plexes. The distributors don't want a $3.00 house playing their product while it's still playing in full price theatres.

In fact I often out gross the first runs now, can you imagine what I would do with an earlier run. I don't need to move up my run, I'm happy with what I do now. The only reason that I play so late is because I have only one screen and there is so much product that gets dumped into the market place at just two given time periods, Nov. & Dec. and May, June & July. The holiday product that comes out from Nov. 1st through Christmas day takes me from Christmas day until Easter to play off. And I only play maybe 12 to 14 pictures of that product when about 35 pictues are released during that time period from the major distributors alone. I only play 3 or 4 pictures a year after the DVD release, and that again is because I get so backlogged by the amount of product and having only one screen. Besides, what difference does it make? I'm currently playing HUGO which has been out for 16 weeks and came out on DVD this past week, and as I sit here typing this I have a sold out 7 PM show. What more could I ask for?

My average week IS over $4000, but that does nothing to get me VPFs since I can't move up my run. In fact I don't want VPFs. I was just using my situation to make the point that it would be fairer to be based on film rental paid, rather then run.

What I would like to see happen, of course, is something to surface that would help all theatres make the switch to digital like NATO promised. Yes, I sat right in front of Mr. Fithian when he stated that the studios would pay for the conversion and that all theatres would be included large and small.

I would like to see NATO keep that promise.
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Re: added fee charge for digital? 11 Mar 2012 02:44 #38025

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Those are fantastic numbers Richard (and very hard to replicate newbies).

The theaters you talk about will be able to get VPFs. The problem is like Mike has talked about is that the existence of the VPFs will keep you from getting many movies. Only gross $2000 the first week of a decent size release.....probably get skipped over in October on that 3100 location release. Probably get skipped over for 6 weeks on the same movie. Men in back 3? No problem.

I am in the above situation. There is no meat left on the bone by the 7th week. So as of right now I will not seek a VPFs. I have been told my 2 different studio reps that the above scenario will exist for me. So the industry wide deals are not good for me.

Maybe something can be accomplished. But I am not holding my breath. We have no power over the studios. We are the last kid being picked.
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Re: added fee charge for digital? 11 Mar 2012 02:56 #38026

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I would not increase ticket prices for digital or 3D. When 3D came around the first time (in the 50s) there was no up-charge as exhibitors saw it as a way to get more butts in the seats. Make them pay extra and they will be far less interested.

Jack - if you're having trouble making money on films everyone else has sucked the life out of why not try playing something the competition has not played?
Bob Allen
The Old Showman
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Re: added fee charge for digital? 11 Mar 2012 20:14 #38027

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revrobor wrote:
Jack - if you're having trouble making money on films everyone else has sucked the life out of why not try playing something the competition has not played?

We do as a last resort. Playing 2 movies right now that did not open in the area. They do poorly. We compete with a 8-plex.

My first choice: on the break highly marketed hollywood movie
My second choice: same as 1
My third choice: same as 1
And keep going.

Playing Gone & Wanderlust right now with Lorax & John Carter. Well......the first two have done poorly as expected but nothing else to play. If we keep movies for 3 weeks, we need 69 movies to play throughout the year. You are going to a some that do not make much.
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