Film Q&A: The Mark Cuban Movie Business Challenge
Mark Cuban says:
So if you want a job, and have a great idea on how to market movies in a completely different way. If your idea works for any and all kinds of movies. If it changes the dynamics and the economics of promoting movies, email it or post it. If its new and unique, i want to hear about it. If its a different way of doing the same thing you have seen before, it probably wont get you a job, but feel free to try.
So go for it. Come up with a great idea that i want to use and I will come up with a job for you to make that idea happen.
The challenge immediately makes me ask a simple question:
Why ?
No really. Why do you care if they go to theaters ?I know you own Landmark Theaters, and that might be a motivation for your answer. As a theater owner you need to fill seats. That has nothing to do with your thinking while you are wearing your "Magnolia hat," or with the thinking of other studio executives.
I understand that one reason the industry "cares" about theaters is that they use the theater figures in determining pricing for the other markets. The entire purpose of that is to create a marginal increase in differential pricing for those follow on markets.
That is not a customer oriented way of seeing things. Guess what ? The customer knows it too. That's what they are telling you when they don't go to theaters. They are voting with their local currency for a change.
The best way to solve your problem is simply to stop caring about it.
It is time to close the window. Release HD-DVD, Blu-Ray, DVD, TV, Internet, and theatrically simultaneously worldwide. This will eliminate the business rationale for depending on theatrical sales in your other distribution deals. It will also distribute the impact of your marketing dollars across a wide variety of distribution channels.
The industry can satiate its need to maximize profits through differential pricing by differentiating on time after release. Its a step backwards, but on its release date a DVD might be priced at $50 USD. A few weeks or months later, that same DVD will be priced at $19.99 USD- this would line up with the time that the DVD would currently go on sale with the windows in place. That is just a band-aid though- market pressures will clamp down on this differential pricing as well.
The industry is headed this way in any case, despite spending an enormous amount of capital to prevent the change. The best thing to do is to start thinking about the world of film business after the change. That is a bit broad for this little topic, so allow me to restrict myself to just your problem.
Yes closing the window will kill the theater business as we know it... and I say good riddance.
As you should readily be able to tell from the comments to your challenge, people don't like theaters. In the end the concept of going someplace to sit with dozens or hundreds of strangers is not appealing to most people.
Theaters were invented solely because people didn't have the means to view films otherwise. Technology has more than rendered that issue to the dustbin of history. Some theater's project upscaled DVD's. Blu-Ray and HD-DVD will be the nail in the coffin.
Another issue is that theaters are increasingly making the experience far far worse, by doing things like running advertisements. Such profit driven tactics cheapen the experience. The patron already paid to get in, why should they have to see an advertisement ? It makes no sense.
I want a huge screen and a great sound system. Some movies still have the spectacle in them. I understand that, and I enjoy it. I hope to create some of that spectacle myself. I can provide all this in my home, for a fairly reasonable price I might add.
There is also a value in seeing a film with a group. Most people's homes can not comfortably seat a large group. Therein lies an opportunity.
The theater is dead! Long live the theater!
What is needed isn't a theater geared to kids and separate one geared to 16-25 year olds or any such thing. What is needed is a smaller boutique theater where patrons can self select the group they attend with.
Ideally I am talking about a theater that seats small to medium groups of between 4 and 24 people in 3 to 4 "standard" sizes. A self selected group is only the beginning.
Groups should be able to rent these "mini-theaters" by the hour- and that is how theater owners will make their revenues. Forget profit sharing- they are on their own. They can create their own differentiation and suite of services. Some will focus on very high end audio and video technology. Some will offer restaurant style service and encourage sitting around after the film talking. Some will cater to kids- essentially offering a baby-sitting service. Some will combine ideas. Who knows what other niche owners of such theaters will carve out for themselves.
You can also forget making a pile of money on the screening itself. Prices will have to be competitive with pay per view and DVD purchases.These mini-theaters will have a library of HD-DVD or Blu-Ray films, and the patrons can select any of these when they reserve the theater for their showing. If the patron brings their own film media, you charge a small public performance fee. No more than five dollars- you are depending on the patron to supply the film media after all.
Other Ideas
I remain convinced that the theater as we know it is dead, but as it lays dying here are some other suggestions to make it a more pleasant death.
Purchase Credits It costs little to make compressed version of the film and sell it online. Allow people who buy tickets to the theater to get a discount- maybe even a big one. This idea should be followed through fairly consistently. If on opening night a patron chooses to download the film for their iPod, they should receive a discount towards a full HD version later on.
Bundles A patron buys a film ticket or two. Offer them a bundle including some popcorn and soda, and a few versions of the film they can own to be fulfilled via mail or Internet. As an example: I go out with my girlfriend, I get two tickets. When I am buying, I am offered a bundle that includes a downloadable 1080p version of the film and an iPod version, plus a coupon for the Blu-Ray edition with special features. Throw in popcorn and soda, and a great price: $60 USD.
Age specific screenings After opening weekend theaters should offer 21&up screenings, 12&under screenings and other useful age delineated screenings. Use these as a tactic for increasing attendance after opening weekends, to reduce tailing towards the end of a theatrical run.
Exert controls on theater owners See to it that theaters are screening films satisfactorily. I am not talking about technical measures like THX or Dolby, but rather that they avoid things like advertisements and even such mundane things like keeping clean.
That's all I have for now. For most of my readers, its just a tiny glimpse into the my vision of the future of film exhibition. For some, this will be the clarion call of doom.