1/06/2006

Movie theaters struggle to remain relevant: why it may not work Over the holidays, I engaged in one of my all-time favorite activities: going to the movies. At one point, I realized I had seen 8 movies in 10 days in 5 different theaters. I feel about movies like my daddy feels about fishing: there's no such thing as a bad day when it's spent doing that particular activity. One thing that really jumped out at me during all this concentrated movie-going experience was how theaters are struggling to remain relevant. You probably already know that theater attendance is down significantly. It would be easy to assume it's because Hollywood isn't producing much that's worth plopping down eight bucks or more to see. But that's only part of the reason theaters are in trouble. The fact is, people just don't see as much reason to go to the theater as they once did. After all, movies are released on DVD very quickly after release to theaters; the price of going to a movie is continuing to skyrocket; and people are starting to lose patience with the rude behavior of fellow movie goers who insist on leaving their cell phones turned on or fail to refrain from talking during the flick. Problem is, it hasn't been so long ago that theathers spent millions upgrading to more comfortable stadium style seating and state-of-the-art sound systems. Now they're stuck with a huge mortgage, so to speak, and nobody wanting to live at home. Some of the promotional gimmicks I saw during my tour of theaters recently included: > Special showings of old rock concerts ("See it on the big screen with other fans!") > Discounted group rates for private viewings (churches buy out films like Narnia) > Theater rental for business meetings (comfortable, great audio/video capability) > Frequent movie goer cards (the 10th one is on us!) > Videoconferencing capabilities (see your fellow employees 20 feet tall!) > Showing old movies that have been colorized or refurbished in some way Most of these seem like good ideas, but so far, nothing has caught fire with the viewing public yet. (The closest is discounted rates for single groups, but it's not like there are many movies that can command that kind of loyalty.) Interestingly, the two things theater owners don't seem to be doing are reducing prices for tickets and concessions, and getting rid of those irritating commercials that delay the movie for as much as 17 minutes. Yet, every article I've read about the drop in movie attendance cites these two factors as the top reasons people have reduced the number of times they attend movies. (This reminds me of the old story about the guy who wanted to make $100 selling apples, but instead of pricing 200 apples at 50 cents decided to sell two apples at $50 each. He never sold an apple.) As I see it, theater owners are focusing too much on how to recoup the cost of their renovations and not concentrating enough on what the customer really wants. They're solving a low tech problem with a high tech solution. In other words, they seem to look at the format of the theater and the technology available and dream up other ways to use them. Truly relevant organizations are those that are willing to take customer feedback and do something constructive with it, rather than try to convince the customer what their feedback should be. I once heard an executive explain that the reason his company was going to produce a particular product, despite no apparent demand for it, was because "Customers don't really know what they want. It's our job to lead them in the right direction." I haven't checked, but a part of me can't help but wonder if he left that software company to manage a theater company.

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