CINEMA TICKETS ON THE CHEAP

Price-cutting Admissions

Dealflicks, an LA-based company, is trying to build a discount ticketing service for cinemas.  Called the Priceline of movie ticketing, Dealflicks' scheme is to partner with cinemas to offer discounts of up to 60% off regular movie admissions and concessions during those times when cinemas are mostly empty (like weekday afternoons).

Now, it's no surprise to anyone in the industry, that the utilization rate at cinemas is low.  In fact, a utilization rate of 20% (meaning a seat is filled 20% of the time) would be considered pretty good for the average cinema.  What Dealflicks is trying to accomplish is to raise a given cinema's utilization.

Similar to hotels and airlines, cinemas have low attendance during off-peak (non-weekend) times. What Dealflicks is pitching is that they will market those 'empty seats' to patrons at a discount from the regular admission price and take a percentage of sold tickets.  Dealflicks lets the cinema owner select which movie showtimes they wish to discount, at what price, and when.  There is no negotiation involved. Customers buy the tickets through Dealflicks' website or iPhone app and collects a 10%-20% fee for each ticket they sell.

Since its launch in 2012, Dealflicks has contracted about 2,000 screens - not a stellar success; however, they keep trying.  They added concession purchases to the shop list but I would think most cinemas would be hard-pressed to give away 20% of their concession sales.  And that's my problem with the Dealflicks' business model.

- Most moviegoers want to go to the cinema when it's convenient for them (movie-going is very discretionary).  Normally those times are evenings and weekends (Thursday night to Sunday night).  A discount on admission, even if up to 60% (representing say $5-6) isn't that much of an incentive.

- Most cinemas, particularly multiplexes, experience low utilization because they have so many seats.  Yes, they need those seats for the first weekend release of blockbusters but alas most of the time those seats are empty.

- Another reason a cinema has so many seats is because they receive, what is known is the industry, as 'house money'.  House money is essentially a kick-back of admission dollars by the studios to assist a cinema in covering it's overhead, if the gross for a movie reaches a specific benchmark.  And guess what house-money is based upon - ah, number of seats.  That is why you see cinema seats 5 feet from the screen, the exhibitor wants to cram as many seats as possible into each auditorium so as to maximized house-money contributions.

- Cinemas can do what Dealflicks is offering by themselves - and most already do.  Many, if not most, cinemas have discounted matinees and off-hour admission discounts.  They could raise these if they chose.

- No cinema, under no circumstance, should ever give away concession profits - this makes no sense.

CMG's take on Dealflicks: It's a non-starter for any cinema with even a modicum of  showmanship or marketing skill.  And if they don't have these skills they should attend a training seminar from Cinema Training Central - www.cinema-training.com .

Best
Jim