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While many consumers will likely balk at Hollywood’s plan to introduce high-priced video-on-demand shortly after theatrical releases, theater owners are still nervous enough to strike back. Mega-theater chain AMC has announced that it will “adapt its economic model” in response to several studios’ plans to release films for digital rental 60 days after their theatrical release.

From AMC’s press release:

The p-VoD world as currently defined threatens [the health of the industry]. As such, we have notified studios of our expectations regarding economic arrangements on movies that go p-VoD. It is not wise to discuss details in the press, and Company policy precludes it, but as these windows shrink and threaten our industry’s future, it is only logical to expect AMC to adapt its economic model.

Them’s fightin’ words from the theater chain. AMC and other major chains seem to be taking the threat of $30 premium VOD quite seriously. With theater attendance on the decline, it looks like the major players will be battling for every dollar they can get from this shrinking pie.

Visit the comments and let us know if theater owners have anything to worry about from premium VOD and h0w you think Hollywood will respond.

(via Engadget)

17 Responses to “AMC Theater Chain Lashes Out Against Premium VOD”

  1. Visitor [Join Now]
    Vernon Dent [visitor]

    Every time there is something new in the way entertainment is presented or made available, exhibitors get very paranoid. Let’s see TV, video tape, pay cable, internet etc. all caused the paranoia.

    Exhibitors will adapt, the weak will perish and those willing to change will continue to thrive.

  2. Member [Join Now]

    Theatres really have no one to blame but themselves. The death spiral started in the 80s when the theatres starting getting greedy. They raised ticket prices to make their numbers better, hence getting better treatment from the studios. Then they starting raising concession prices to absurd levels and plead poverty as the excuse. Popcorn costs literally pennies a pound. If they lowered prices they’d sell more and make even more money.

    It used to be that almost everyone went to the theatres. Some just once or twice a year but even those shut ins went occasionally. Now there are many who haven’t been in years and those that do still go only go out for specific movies. As Vernon said, theatres will either adapt or die.

    I have seen a local resurgent in the bargain theatres so all hope is not lost. The closest one to me even has dirt cheap concessions. It’s two dollars for a bucket (yes a bucket) of popcorn and a similar price for soda.

    • Visitor [Join Now]
      Misty [visitor]

      Perfectly said!

    • Visitor [Join Now]
      ech0 [visitor]

      The amount of ignorance in this post is hilarious as it is obvious you know nothing of the operations of a theatre. It is the studios who became greedy. For the first couple of weeks by contractual obligations the theatre usually does not make any money per ticket sold. After the first couple of weeks the theatre will make on average twenty five cents per ticket sold. The longer a movie stays at a theatre the more money the theatre makes per sold ticket. That is why concessions are so high. To cover operating costs and to make a profit. They put salt on the popcorn to make you thirsty, to enhance profits. A theatre also does not buy a print, they rent it, for several thousand dollars; per print. They can run upwards of 50k a print. And then you have films that both sides know will do well, like star wars. Which will then also place requirements to theatres in order for them to even show a film, like the thx systems that theatres had to have in order to show episodes 1-3, Which ran around 70k per theatre. And then they will extend their control of ticket sales for much longer than the average 2-3 weeks. In 1980 they controlled the receipts for 5-6 weeks. When episode 1 came out it was two months. Lucas and fox also took a percentage of concession sales, just so the theatre could show the movie. Don’t blame the theatre, blame the studios.

      • Member [Join Now]

        Actually sir, I know exactly how theatres work having managed one. I know the profit sharing plan. You don’t understand where the greed came in. Theatres are free to set ticket prices. They escalate them (as I said in my OP which you didn’t understand) to make the revenue to the studio higher. Hence it looks good on the paper work and in theory they can get more prints of first run movies. They also sell movies to beyond capacity because the studios look at “sell out” numbers as well. The studios never set nor will they set ticket prices. The studios are a little greey at the percentage level. This of course all breaks down when you consider that a- everyone has high prices so there is no advantage and b- the reality is that most theatres will get first run prints anyway since the studios are so desperate to have massive opening weekend totals. So in short the theatres are greedy and stupid at the same time.

        Also sir, if you would read carefully my original post you would see that I addressed concession prices. You have never run a theatre personally, I can tell that. I can tell that since you’ve accepted the BS they give you without questioning it. Popcorn and soda are dirt cheap in mass quantities. That is know. A soft drink probably costs the theatre 5 cents for a large. If they lowered prices they would sell more and in the end actually make more money. Instead they would rather set the prices high so they can cut employee costs even though the extra employees and higher sales would more than compensate.

        You have also failed to explain how the recent upswing in budget theatres works if the studios control so much. Budget theatres also get first run movies and have low concession prices but still seem to make plenty of money to keep the doors open. If the studios called the shots then this would not be possible.

        Before you call someone ignorant Mr. Echo do some research of your own and don’t just believe everything you are told.

        • Visitor [Join Now]
          ech0 [visitor]

          You are so dumb, you don’t know how dumb you are. I managed for ten years at various national amusements theaters and worked in the district office overseeing 30 separate theaters in a fifty mile radius; I am friends with the owners of two local art house theatres including an original Cinerama theatre. Before that I had family in the business for several years. My understanding of the operations I’m sure is far beyond your capacity of understanding. My history goes back to the mid seventies, i have seen the changes first hand for over 30 years. I stand by my statement of your ignorance.

          The theatres don’t raise prices just to raise prices. Every year licenses are renegotiated, which first run theatres need two, one performance license and a sync license. Those licenses derive the price of tickets. A larger chain in the first run market will pay more than a second run bargain theatre. That is also why the first runs have higher concession prices, because they have significantly higher overhead. I never negated how much soda and popcorn cost on bulk. But lowering those prices on the consumer level would not only cut into the profit margins of the theatre, but the operations cost. Because again you fail to realize, that the theatre gets not one red cent from ticket sales for the first few weeks, and then after those first few weeks they are lucky to get 25-50 cents per ticket sold. By your argument the theaters are raising ticket prices to artificially inflate the income revenue to the studios to no benefit of the theatre. As on the daily operations level, the theatre knows that the more someone spends at the box office the less likely they are to spend at the concession stand, and the more likely they are to sneak in their own refreshments. The studios are not so desperate that they will let a theatre have a first run because times are tough, they are petty enough to restrict who gets what and how many unless their terms are met. By your argument, the studios are greedy, but also generous. With major releases (batman avatar iron man star wars etc) the studios and distributors will demand 10-20% of concession sales, if they do not get that percent, then your theaters will not get any prints of that movie. If you really managed a theatre then you’d know that more often then not when a major movie is released and everyone expects sellouts that the distributor will have auditors do seat counts for numbers verification but more importantly for demographic purposes. Modern theaters (at least going to the early 90s) use computers, and know exactly how many seats can be sold, and cannot over sell a show.

          Also if you did work in the theatre you’d know that the syrup is only fractions of a penny, with the cups being about 4and a half cents per on the average with all sizes. The movie theater will not make money on volume. Typically a couple will not eat and drink more than 1 large popcorn and 1 large drink; so a theater will not hope to sell two at two dollars each when they can sell sell 1 of each for four dollars a piece. But wait, right here is where I know your going to say “but bargain theaters can do it blahblahblah….”, and they can do it because they do not have the overhead that first run theaters do. Despite what you believe, bargain theaters are not first run theaters. And can get the prints cheaper, but also don’t have the same licensing costs that the first runs do(same license, but different price), so they get significantly more from ticket sales. But they too rely mostly on concessions, also not by bulk sales of concessions.
          But the upswing in budget theaters as you put it is mostly due the the conversion of first run theaters into second run theaters in an attempt to avoid closing them down entirely, which is the next step for most of those new budget places. That or the locations are sold off to another company.

          Some advice for you. Don’t get all butthurt when people call you out when you make things up and talk out your @ss. Most of what you wrote was incoherent. And the rest of it was just wrong. You should stop now before you embarrass yourself any further.

  3. Member [Join Now]
    Shemp Howard [shemp-howard]

    In fairness, theater owners, even the large chains, are always going to fight a losing battle. Minimum wage increases, rising utility costs, government regulations, rent, taxes, the list goes on and on, all making it a tough business environment.

    It isn’t so much the cost of the concessions, it’s the fact that in may states there are *no* sanitation standards nor requirements. Aren’t the hot dogs on the rotisserie appetizing? Some have been cooking there since the silent film era. ;)

    Ever use the public restroom in a theater? Good Luck! Bring a haz-mat suit or even a gun ;).

  4. Visitor [Join Now]
    Daniel [visitor]

    well no real loss of business on anything but the kids movies where you have families of 4 or more, but it will make getting good copies of movies illegally earlier.

    • Visitor [Join Now]
      Anton [visitor]

      Just don’t go crying to the local news channel when the studio cops come knocking. Wah! I only downloaded 2 movies, now the studios want to fine me $250,000.
      A warning to those who torrent films: studios are stepping up thier enforcement against torrent downloading this years.

  5. Visitor [Join Now]
    Tex Dude [visitor]

    I went to the movies for the first time in over a year this last weekend and the cost was above $40 ($25 for 2 tickets + $15 for concession stand). There were only a dozen people at the movie and I wasn’t that surprised.

    Don’t theater owners realize that if you lower the cost, you actually make more money? Raising prices as a gut reaction just accelerates the extinction of movie chains. They shouldn’t try to compete with VOD or any other format because in most cases they will lose. Instead, carve out a niche for yourself or become a dinosaur!

  6. Visitor [Join Now]
    Julie [visitor]

    Well, the idea of a high end VOD is attractive for a family, especially with the advent of home theaters. However, I can still take the family of 4 to the movies for $20 -24 depending upon what theater I go to. No, I can’t go on Friday night and yes I have to go to the first showing of the day, but I can still do it. And if the budget is tight, I don’t have to buy popcorn. I can take in my own theater candy from the grocery store.
    Granted, I hate the high theater prices too. That’s why I refuse to go to anything other than the 1st showing of the day. However, I love going to the theater, even though the quality of the film these days is less than what I get in my own home theater. I can’t get the interaction with the audience at home and sometimes that is phenomenal. And, on a larger scale, theaters are still a great source of jobs for teens and young adults. Those types of jobs are getting harder for teens to find. So, for now, I’ll stick to the movie theaters. After all, why should the studios get the full profit. Once they get rid of the theaters, then they have a clear shot to really raise the prices of the VOD.

    • Visitor [Join Now]
      Anton [visitor]

      Redbox and Netflix users won’t listen to you. It’s all about me here. I want to save $2 and put more money in some company’s wallet that doesn’t even have it’s HQ in my town, let alone state. The economy is down, they say. Yeah it is, and guess who is helping it go down?

      Who cares that the independant video store/theater closed down, and with it went 6 jobs, I saved $2. That’s capitalism and only the strong(rich) companies survive, they reply. To that I ask, is that a good thing though? The founding fathers fought against centralization, and now that’s all we want.

      • Visitor [Join Now]
        Richard [visitor]

        ” The founding fathers fought against centralization, and now that’s all we want.” They did? I must have missed that in the Constitution. Or was that in the Bill of Rights? Care to enlighten or are you just pulling arguments out of your hole??

      • Visitor [Join Now]
        Firstlawofnature [visitor]

        Do you drive a car? Because if you actually took a horse and carriage to work instead it would provide a lot more jobs to folks in your town. The local hay distributors would make a fine living.

        The car was progress to the 99% of americans that didn’t make their living selling buggy whips.

      • Member [Join Now]
        Hellstorm [hellstorm]

        Your misunderstanding of capitalism, psychology and sociology is astounding. It’s not merely about cost – it’s about return on investment (ROI). People will pay more for a better experience, as proven by the existence of multiple cinema pubs/cafes in my area.

        If some people would rather watch a film on their home theater system than wait in line to buy overpriced tickets at a theater, wait in line a second time to buy overpriced concessions at the concession stand, deal with people’s cellphones/conversations, etc, it’s hard to argue that it’s because these people misunderstand the intentions of the founding fathers.