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Author Topic: Pricey Movies-Experts discuss why
Mike Frese
Master Film Handler

Posts: 465
From: Holts Summit, MO
Registered: Jun 2007


 - posted 05-01-2011 07:56 AM      Profile for Mike Frese   Author's Homepage   Email Mike Frese   Send New Private Message       Edit/Delete Post 
http://www.lehighvalleylive.com/today/index.ssf/2011/05/local_movie_theater_owners_and.html

Local movie experts discuss why going to the movies isn't as cheap as it used to be
Sunday, May 01, 2011
By Dustin Schoof
The Express-Times
Going to the movies used to be a relatively inexpensive afternoon getaway or date night staple.

These days, a trip to the local multiplex can be as expensive as taking in a professional baseball game, once the cost of the movie ticket and concessions are factored in.

So why is going to the movies so expensive? The answer, according to those in the industry, isn't as clear-cut as you would think.

Making money

Moviegoers tend to see the biggest dents in their wallet at larger multiplexes. But Jeremy Devine, vice president of marketing for Rave Motion Pictures, says the theater makes most of its profit from concessions, not ticket sales.

He says the bulk of revenue earned through ticket sales goes back to the studio. Devine says inflation has also played a part in driving up the price of a movie ticket -- not to mention a sluggish economy and a general dip in movie attendance across the country. At Rave, an adult ticket for a traditional 2-D film costs $10; $7.50 for a matinee.

By comparison, Regal Cinemas, which has locations in Pohatcong Township, Lower Nazareth Township and Bethlehem Township, Pa., charges $10.75 and $8.50 for matinees.

A representative for Regal could not be reached for comment.

Devine says prices, despite the high cost, are actually on par with other sources of disposable income spending. He says he understands audiences' nostalgia for their youth and old movie palaces, but stresses that installing stadium seating, digital screens and other nuances is necessary today to give audiences the most for their money.

He says he hopes such state-of-the-art technology will make people forget about the rectangular theater complexes of the '70s and '80s and what he describes as "postage-size screens." Devine says construction and technology costs are also rolled into the cost of a movie ticket -- a vital aspect of competing with the home theater market.

Rave's Upper Saucon Township location at The Promenade Shops at Saucon Valley recently installed an IMAX screen -- the first of its kind in the Lehigh Valley.

An additional $5 will be added to the cost of a traditional 2-D film shown on the IMAX screen and $7 more for a 3-D IMAX showing. Devine says the cost of 3-D glasses and technology such as digital cameras and lenses can be attributed to the higher IMAX and 3-D ticket costs.

"The kind of technology and buildings we put up are extremely expensive," Devine says. "We certainly know that we want the communal experience of going to the movies to survive."

The resurgence of 3-D movies -- thanks in large part to the success of James Cameron's 2009 science-fiction epic "Avatar" -- has led to many multiplex chains installing 3-D-friendly cameras and screens. Devine says Rave is lowering the price of its non-IMAX 3-D screenings from an additional $4.50 up-charge to $4.

But as more and more films are released in 3-D -- "Fast Five," "Thor," "Green Lantern," "Captain America: The First Avenger," "Pirates of the Caribbean: On Stranger Tides" and "Harry Potter and the Deathly Hallows: Part 2" are among the 3-D films slated for release this year -- higher ticket prices have become commonplace as demand for the technology continues to grow.

Theater versus theater

Ryan Hill, program manager of comedy and cinema at the ArtsQuest Center at SteelStacks in Bethlehem, says movie theaters are up against advances in home theater. As luxuries such as 3-D television sets and Blu-ray players become more affordable and the popularity of Netflix, Red Box and on-demand movies grow, theaters are facing stiff competition.

Hill says as more and more theaters upgrade their theaters to keep up with technology, other costs such as electricity and staffing are factored into the overall cost of a trip to the theater.

"In general, movie theaters are now competing against people's home theaters, which are getting nicer and nicer," Hill explains. "It's a battle between the movie theater and the home theater."

He says Frank Banko Alehouses at SteelStacks offer movie fans a more unique and intimate experience by focusing on independent, art-house and foreign films that they would typically have to travel to New York City or Philadelphia to see -- with ticket prices ranging from $7 for ArtsQuest members to $9.75 for nonmembers.

"We're going to be showing films you can't really see anywhere else," Hill says.

Being realistic

Washington Theatre owner Marco Matteo says he takes a realistic approach when setting prices. At the end of the day, he says, it's about the customer.

"I'd rather have more people spend less money," Matteo says. "In return, people are very appreciative. I'm trying to be realistic. Everybody knows what the prices cost these days. You've got to give people a chance."

The Washington Township, N.J.-based theater-- which uses traditional 35 millimeter cameras-- charges $7.50 for adults and $5 for matinees for first-run releases. Matteo says he dropped the matinee price from its original $6.

"After talking to people and realizing it's a family theater, I went back to $5," Matteo says. "It made perfect sense. I think it's pretty reasonable."

The theater also hosts a family night Wednesdays when the featured film is not age-restricted, charging a flat $5 ticket fee.

"It gives people a chance to save a few bucks and have a day out with their kids."

Looking ahead

Despite the rising cost of going to the movies, one thing is certain, Hill says: sitting in a theater and watching a film come to life on a movie screen is an experience you can't replicate in a living room or anywhere else.

"(Going to the movies) is still the place to be," Hill says. "It's the destination people go to in the end. You still can't see a movie (at home) when it first comes out."

Exposed Editor Dustin Schoof can be reached at 610-258-7171 or dschoof@express-times.com. Talk about entertainment at lehighvalleylive.com/forums.

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Steve Guttag
We forgot the crackers Gromit!!!

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 - posted 05-01-2011 09:14 AM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
They don't seem to explain really why movies cost more other than the equipment is really expensive in IMAX venues.

And count up how many times the word "Camera" is used instead of projector...a fluff piece with insufficient research.

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Aaron Garman
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 - posted 05-01-2011 12:08 PM      Profile for Aaron Garman   Email Aaron Garman   Send New Private Message       Edit/Delete Post 
What Steve said.

That, and they claim Fast Five was a 3D release. Um, no it wasn't?

AJG

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Mike Blakesley
Film God

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From: Forsyth, Montana
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 - posted 05-01-2011 12:53 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
Yeah - I would like to see just one of these articles list the cost of everything that goes into a good modern cinema.

Why don't they say something like "You're seeing the movie from one of 200 chairs that each cost $150 or more. The digital projection system is worth about $65,000, and the sound system maybe another $30,000, and the popcorn machine is about $6,000. And the movie cost $125 million to make. So how is nine or ten bucks too expensive?

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Jonathan M. Crist
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From: Hershey, PA, USA
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 - posted 05-01-2011 03:19 PM      Profile for Jonathan M. Crist   Email Jonathan M. Crist   Send New Private Message       Edit/Delete Post 
And the article failed to mention the Roxy Theatre - a jewel in the heart of its coverage area where movies are only $3.00 for admission:

http://www.roxytheaternorthampton.com

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Mike Frese
Master Film Handler

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From: Holts Summit, MO
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 - posted 05-01-2011 03:52 PM      Profile for Mike Frese   Author's Homepage   Email Mike Frese   Send New Private Message       Edit/Delete Post 
I have a problem too with theater owners playing the "oh we do not make any movie on tickets sales" card. You have to straight with the public.

Assume an average ticket of $7.00, the exhibitor keeps 45% or $3.15. Assume an average per cap of $3.50 and a cost of goods of 10% (which many chains do report), the exhibitor keeps $3.15.

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
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 - posted 05-01-2011 04:25 PM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
Well...the cost of the chair...at $150 lasts how many seatings? ...it is essentially free over its life...even with repairs. The $65,000 projector (you'll probably spend more money on lamps for it)...how many patrons does IT serve over its life...it too...is essentially free on a per-show/person basis. The popcorn machine is only essential if you sell popcorn and I'm sure you factor its cost in when you price your popcorn.

Compared to the electric bill, floor staff, studio's cut and the monthly payment to the bank/landlord for the property, the cost of the equipment to show the movie is really a non-starter in the big picture of why movies cost so much. The long-term items (things that last 10-years) are almost never significant in the cost of operation...it is the reoccurring things that need to be paid every week/month that cost and they often cost a similar amount even when attendance is down.

$10.00 is too much to see a movie in a typical cinema, in my opinion and is more that it used to be when compared to the typical minimum-wage worker (though there were times when the costs were similar).

-Steve

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Mike Blakesley
Film God

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From: Forsyth, Montana
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 - posted 05-01-2011 10:12 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
quote: Steve Guttag
Compared to the electric bill, floor staff, studio's cut and the monthly payment to the bank/landlord for the property, the cost of the equipment to show the movie is really a non-starter in the big picture of why movies cost so much.
Right, but the electric bill and payroll and mortgage expense figures are boring. Most people are rightly impressed when they find out how much cinema equipment costs when compared to their tee-vee setup at home.

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Scott Jentsch
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 - posted 05-02-2011 02:04 PM      Profile for Scott Jentsch   Author's Homepage   Email Scott Jentsch   Send New Private Message       Edit/Delete Post 
Any decent piece of furniture that a person would sit on at home is going to cost more than $150, so that price isn't going to impress anyone that demands more comfort than a folding card table chair.

People are impressed by excellent service and a great moviegoing experience. There is so little good customer service these days that it doesn't take much to make a positive impression in that regard, but all it takes is some apathetic staff that looks like they'd rather be doing anything else but serving that customer to make that customer think that they're paying too much for that movie ticket.

It's not so much about the price, but about the value.

What part of the country/world does someone have to come from to call a projector a "camera"?? I'm assuming that it's a regional colloquialism issue, because if it isn't, it just means the person is a dullard.

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Mike Blakesley
Film God

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From: Forsyth, Montana
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 - posted 05-02-2011 06:21 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
quote:
Any decent piece of furniture that a person would sit on at home is going to cost more than $150,
People are impressed by big numbers. The trick with the chair is to remind them there are several hundred of the $150 chairs in there.

Plus a theatre chair is nothing fancy, unlike most chairs you would find in a living room.

quote: Scott Jentsch
What part of the country/world does someone have to come from to call a projector a "camera"??
It's just because they don't see projectors all the time, but they DO see cameras. Hardly anyone uses the word "projector" in their daily life. When the world shifted from cassettes and VHS to CD and DVDs, I'd hear people in the store say "I'll bet this is a good tape" while holding a CD in their hand. And I had lots of people ask me for "a tape deck that plays CDs." It's just all in what people get used to saying.

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David E. Nedrow
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 - posted 05-02-2011 07:39 PM      Profile for David E. Nedrow   Author's Homepage   Email David E. Nedrow   Send New Private Message       Edit/Delete Post 
quote: Mike F
I have a problem too with theater owners playing the "oh we do not make any movie on tickets sales" card. You have to straight with the public.
I rarely hear anyone say they don't make "any" money, but they generally -- quite rightly -- note that they take home a small percentage of the ticket. I tell people that, if we're lucky, what we retain in ticket revenue might pay our rent for the month. Everything else comes from the stand.

-David

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Mike Frese
Master Film Handler

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From: Holts Summit, MO
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 - posted 05-02-2011 08:50 PM      Profile for Mike Frese   Author's Homepage   Email Mike Frese   Send New Private Message       Edit/Delete Post 
quote: David E. Nedrow
but they generally -- quite rightly -- note that they take home a small percentage of the ticket. I tell people that, if we're lucky, what we retain in ticket revenue might pay our rent for the month. Everything else comes from the stand
45% is not small. Plus I gave you example of how both ticket sales and concession sales contribute to the operating profit pretty equally. If you gross ticket profit barely pays your rent, then your rent way too high.

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Mike Blakesley
Film God

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From: Forsyth, Montana
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 - posted 05-02-2011 11:09 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
You guys are being way too general. You can't just consider the film rent to be the only cost of running the movie.

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 05-02-2011 11:49 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
The cost of utilities at multiplex theaters has to be really high. I don't know the exact figures, but I'm sure it is far from cheap. I wonder what the water usage is for the average 8-plex, 16-plex or 24-plex.

The electric bill for running the air condition/heating system has to be pretty big, especially for large stadium seated theaters with big cubic areas of space to heat or cool. It seems like the digital projectors are commanding a bigger power draw than 35mm units did. And then there's all the other stuff around the complex that needs power, everything from the popcorn machine to the neon and LED signs.

The air conditioning systems alone cost a lot to buy and install and are expensive to repair and replace. At my workplace we're doing a trade-out with a heating and air company. They're replacing one of the central heat and air units in return for a vehicle wrap and ad time on one of our LED billboards.

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Monte L Fullmer
Film God

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From: Nampa, Idaho, USA
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 - posted 05-03-2011 12:52 AM      Profile for Monte L Fullmer   Email Monte L Fullmer   Send New Private Message       Edit/Delete Post 
...and try "high lease payments/month" at certain market areas..

Suddenly, ten bucks a tix doesn't sound that all bad since there are those patrons who will pay for that tix price for entertainment.

-monte

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