Movie Theaters battle for share of entertainment dollars
Although this was written in 2007 (think of the technology innovations that have happened in just that time), it still remains a case study in how movie theaters can better navigate the myriad of entertainment choices we now have and is a case study in entertainment branding.
By Tom Dougherty
There is a slight sea change at your local multiplex, depending on where you live, and it marks an attempt by theater owners and chains to generate more revenue as the amount of competition increases. A handful of theater chains are showing live baseball, rock concerts, classic television shows and even opera up there on the silver screen. It’s a reaction to the fact that consumers now have more choices than ever for their entertainment dollar, while in most cases the movie-going experience has not improved with it. “I love film,” Thomas W. Stephenson Jr., president of Rave Motion Pictures, which operates in 11 states, recently told the New York Times, “but the simple fact is that we can’t count on movie attendance to grow.”
Threats to The Industry
Stephenson is right. Movie attendance has basically flattened out. It is a result of failed entertainment branding. It increased less than 1 percent in 2007 after years of declining attendance even as the number of movies made increased. Simply put, there is no new revenue coming in. The threats are even larger today, even though many theater owners may feel they have been down this road before.
The introduction of television on the 50s and VHS in the 80s also posed threats but theaters came out of it fine. Today, however, the biggest threat to an individual movie theater is not the multiplex down the road. The main competition is the consumers’ option to simply fire-up the Blu-Ray DVD on their high def, big screen television or download movies on their iPod or computer. (UPDATE: The options are even larger now with streaming video.) It is a real challenge in entertainment branding.
The slowly evolving reaction to all that is to increase and vary the content in what is basically a content-driven business. It has been successful in its limited use. The Ziegfeld Theater in New York reported a quick sellout when it showed a live broadcast of a New York Mets game, complete with a live organist and team mascot.
There is another opportunity here, though, beyond finding new revenues. These new possibilities (real entertainment branding) are only a first step for an individual theater or theater chain that can brand itself as a direct reflection of its customers.
For the Ziegfeld Theater, its brand is already rooted in its long heritage. But for others, they can be something other than just another of tens of thousands of screens showing Indiana Jones eight times a day. Brand as it is practiced by most is simply corporate identity. They tend to be about who the company is, leaving no room for the customer.
Think, for example, of Wachovia Bank (now part of Bank of America), which went through a brand makeover more than five years ago based on “Uncommon Wisdom,” which meant that Wachovia was the expert. Not the customer who used Wachovia. Therefore, consumers can’t see any room for themselves in the brand and that’s part of the reason why the bank recently announced a $708 million first-quarter loss.
There are market and economic reasons for that loss, of course, but its brand hasn’t helped it much. In the movie theater industry, the problem is that theaters have had little or no opportunity to have a brand at all – especially when multiplexes turned the grand theaters obsolete 20 years ago.
Movie theaters are dependent on negotiations with movie studios as they bid on the biggest movies in order to have some exclusivity in their area. Selling concessions at those blockbusters is a big business for the industry. But if you want to see Indiana Jones without the chatty audience, high-priced concessions and the inconvenience of the movie theater deciding when you get to watch, just wait. It’ll be on DVD or an on-demand service in a few months.
Entertainment Branding Equals Consumer Choice
Right now, consumers are picking their movie house of choice, so to speak, based on content and location. In very, very few instances will consumers inconvenience themselves in order to experience a true theater of choice. Usually, the movie-going decision tree is like this: What Do I Want to See, Who is Showing It, What Time is It Showing. A theater is eliminated based on not living up to the questions in the decision tree or because it had a previous failure with that consumer. A brand that is meaningful to target audiences and is positioned against the competition can give consumers a reason to choice, and covet being a part of that brand.
The New Possibilities of Content
That’s where the new possibilities of content come in. If the selection of content is carefully done and the theater matches the experience to it, it can always become part of the considered set and even become a destination of choice. The brand does have to do more than just match content with consumer, though. It has to live the brand in such a way that it becomes a reflection of that consumer.
A theater than concentrates on, let’s say, opera and Broadway shows can build an exciting, high-class brand that can be the umbrella under which other improvements are developed: Serving wine and cheese, for example, or having bathroom attendants. Brand gives you focus, and what movie theaters are often missing is that focus. Instead, most of them look and feel just like everyone else. Instead, they can tap into who the theatergoer is when they use that brand or experience the entertainment destination. There are a myriad of possibilities and the movement to add varied content may open the door to the theaters to think ahead and think of themselves as a brand and not just another delivery system.