THE CINEMA'S SALVATION ..... Hmmmm.

Have you ever gone to a department or grocery store where all the products have the same price? That would be crazy, right? But that is just what happens when you visit your local cinema. All the movies have the same price. Avatar costs the same as the hundredth version of Harry Meets Sally. Why?

For films, the studios do not complete on price but on content. The more people that visit the cinema to view a movie the more successful it is. But isn't this contrary to all basic marketing principals! Why should I pay $9 admission for Avatar ( which cost $150 million to produce) and $9 for a film that cost $15 million to produce. Why shouldn't films be priced based upon their preceived value to the marketplace - where some films cost less or more to view then others. Not all films are created equal and therefore all films should not be priced equally as they do not have equal value.

There were over 560 films released by the studios in 2010, of which the top 50 generated close to 70% of the total boxoffice. Obviously, the 560th film did not have the same worth as Toy Story 3, the number one film. Perhaps if the studios tiered there boxoffice admission pricing more people would be motivated to go to the cinema. You know, less price more volume. Does this concept ring a bell, studios? Isn't this marketing 101.

Film distributors and exhibitors need to re-think their business model from top to bottom and any reassessment, of any business, starts with pricing, product value, and competition. Charging the same price for very movie makes no logical sense in modern market and price driven economies.

Boxoffice admissions in the U.S. peaked in 2002 and have downtrended since (2010 admissions decreased 6% from 2009). This trend can not continue if the U.S. is to have a vibrant cinema as no industry can sustain this level of customer loss and be profitable. The exhibition side of the industry is already feeling the impact of this and until and unless all the players in the movie industry change their business strategy and tactics the downtrend will continue. Re-thinking the pricing of movies at the boxoffice is a good start.

Jim Lavorato, President
Entertainment Equipment Corp.