February 23rd, 2012

Why Hollywood Is Not In The Movie Business

Last November, Anthony Lane wrote in The New Yorker about two major motion pictures, Tower Heist and Melancholia, and an experiment that involved their simultaneous release in movie houses and through video-on-demand.

Both films, while very different in story and tone, just weren’t suited to the experience of “home cinema,” according to Lane, not because of their merits, of which Lane said there were few, but because certain quirky elements of storytelling demanded they be viewed the old-fashioned way—in a theater filled with strangers who gather around the desire for a shared experience.

“As you pause your film to answer the door or fetch a Coke, the experience ceases to be cinema,” Lane wrote of home viewing. “Even the act of choosing when to watch means you are no longer at the movies.” The term “home cinema,” he declared, is an oxymoron.

Now ask Netflix, Amazon and Hulu if any of that matters.

The establishment known as “Hollywood” and its myriad constituents, including the National Association of Theater Owners, are wringing their hands about the state of cinema attendance. According to a report last month from Hollywood.com, movie tickets sales dropped to a 16-year low in 2011 in North America– 4% decrease in sales from the $10.2 billion movie goers shelled out in 2010.

As Hollywood struggles to find out why fewer people are going the movies, customers might answer the question with another question: Why bother?

We live in a time-starved society. Going to the movies is major time-commitment when you consider that most Americans must drive to the multiplex. If I’m going to go to the trouble of driving, the product better be good.

But just as the railroad moguls of the early 20th century were too late in realizing they were not in the railroad business, but in the transportation business, so must Hollywood realize that it is not in the movie business, but in the experience-delivery business. The overall experience of going to the movies just isn’t worth it for several reasons:

• To watch a two-hour movie you have to invest at least three hours to buy the tickets, go to the theater, wait on line to buy food, find a good seat and sit through commercials and coming attractions.
• You’ll spend at least $50 in tickets and/or snacks, and the latter are expensive, low quality and extremely unhealthy.

In world of time starvation, it’s more efficient to wait and watch a reasonably current movie on my big, flat-screen TV in the perfect comfort of my home for $5. Why should customers go to a movie theater, especially if the movie-screening business continues to do things the same way?

Here are some suggestions for change:

• Make it easy, convenient and seamless to purchase a ticket, even online. Customers still cannot print their tickets at home from a website but must do so from a kiosk at the theater. Why can’t I use my mobile device to just scan payment when I arrive?
• Allow customers to order popcorn, candy and soda ahead of time so they don’t have to stand in line. When I walk in, my order is ready and waiting and someone just hands it to me.
• Book seat numbers—not for the entire theater—but have a certain number of premium seats available for a slightly higher price. Some theaters around the country already offer this but it is not a widespread practice and it should be.
• Extend the cinema experience by attaching it to a restaurant, which creates an experience that feels worth $50 and more, serving adult beverages and quality food.
• Create a loyalty program that awards a free movie or coupons for free food after a certain number of tickets are bought.

Just this month, Best Buy offered a cinema tie-in for loyal customers that’s part of a “surprise and delight” strategy, a points-based system of rewards, and in this instance, rewarded a handful of the consumer electronics retailer’s top shoppers to an exclusive preview screening of the film Twilight Eclipse.

Smart retail and packaged goods companies have been turning their brands into brand rituals for their customers. A brand ritual is nothing more than a branded behavioral bond with customers.

Having consumers adopt rituals around certain brands is a bit more complex in our time-starved society, but it’s not too late for those whose “product” is cinema, once they realize what business they are actually in.

View article on Forbes.com.