22 Feb 2012

Movie Theaters Adapt to Compete with Home-Movie Options

Author: Eric Lagatta | Filed under: BGSU, Business, Localizing story, Spring 2012, Student Contributor

By Eric Lagatta

When Justin Crasto wants to watch a movie, he prefers going to a movie theater.

“It’s a more enjoyable experience,” said Crasto, a junior majoring in film production at Bowling Green State University. “It’s a chance to escape reality and enjoy time with friends.”

Crasto said that the big screens and sound quality at theaters are a big advantage compared to watching movies at home.

But with the growing trend of home-movie options, many people of Crasto’s generation are staying home, forcing movie theaters to look for ways to maintain audiences.

“Movie-going is antithetical to the types of consumption that are popular now,” said Mark Bernard, a professor in the theatre and film department at Bowling Green State University “Convenience is the name of the game now,” he said.

These home movie options, which include Netflix, Redbox and On-Demand, have the advantage of convenience, he said.

According to a 2005 poll conducted for the Associated Press and AOL News by Ipsos, 73 percent of adults said they preferred watching movies at home while 22 percent said they would rather go to a movie theater.  25 percent of American adults had not attended a movie at a theater in the past year while 38 percent had attended between one and three movies.

This movie-watching trend is especially apparent among younger people, Bernard said.

“The idea that you should pay a lot of money and drive out of your way to see something is at odds with younger people,” he said.

Crasto, like many college students, said he does not have a car, which makes it harder for him to make it to a theater.  These factors have

BGSU's department of theatre and film is located on the second floor of the Wolfe Center for the Arts. Photo by Eric Lagatta.

pushed the theaters to create more incentives for people to come out.

“One of the things that has already been an initiative with [theaters] is trying to replicate the advantages of a home movie experience,” Bernard said.

Theaters have created stadium-style seating and rows that sit farther apart so that the viewer has his or her own space and is not bothered by other people, he said.

“What we will continue to see is theaters giving you more for your experience,” he said.

Theaters have improved their food selection with some even serving meals, Bernard said.  Some even serve beer.

Another advantage theaters have is that they have multiple shows and multiple screens to maximize the convenience for the viewers, Bernard said.

Home-movie options, however, have the advantage of lower cost.  One month of video streaming from Netflix equals the price of a movie ticket, Bernard said.

“The movie experience is out of so many people’s price range right now,” he said.

In the years of the financial crisis, the numbers in attendance and dollars held but in the last year the numbers have dropped, Bernard said.

Theaters would like to lower prices, but the studios are the reason the movies cost so much, Bernard said.  Theaters have proposed seeking a ticket price based on the film’s budget.  High-budget movies would have a higher ticket price and low-budget would have a lower ticket price.  Studios, however, don’t want that because it means less money, he said.

Crasto has also worked for a movie theater for four years.  He started off as floor staff and has worked his way up to assistant manager.  He thinks his theater’s business could be impacted by the rise in home-movie options.

“In terms of pricing, I would say the [theater] industry would have some interest in that,” he said.

Crasto said his theater offers reward cards so viewers can get discounts on movie tickets.  The theater also has free movie Tuesdays for those with reward cards.

“Anything that’s on sale or on discount is a go-to thing,” he said.

The theaters also promote their concessions because that is where they make the money, Bernard said.

To promote concessions, Crasto’s theater will feature images of the current popular movies on their cups or popcorn bags, Crasto said.

The attendance at the theater depends on the movies showing, he said.  The ones that attract the biggest audience are the movies that generate the most buzz.  These are often blockbusters such as The Dark Knight.

Oscar season also brings many people out, Crasto said.

“It definitely impacts attendance because customers who haven’t seen the films nominated will want to give their thoughts,” he said.

Bernard also said that showing Oscar nominated films is good for the theater business.

“Oscars are the biggest financial thing going on in the spring,” he said.

One of the biggest advantages to the theaters, Bernard said, is that the movies are available to them before they are available for the home-movie options.  Studios, however, want to see a simultaneous release.

“That’s the only thing theaters have,” Bernard said, “and they don’t want to lose it.”

Compared to films that go straight to video, “theaters lend movies this validity,” Bernard said.

With the rise of home-movie options, Bernard sees a loss in a community movie-going experience.

“I think that we should still go to the movies for community,” he said. Otherwise, “We become very inward looking and we’re not as exposed to as much.”

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