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Wednesday, December 07, 2016

Atom Ticketing: Just Another Player

I've posted about Atom Ticketing and its goal of increasing the seat utilization rate at cinemas through an on-line app and automated system - a hefty and, in my opinion, unachievable mission.

The normal utilization rate at cinema's is 12-18%, meaning that, on average, 82-88% of the seats in a cinema are unused while a film is being presented.  This rate of seats-to-occupancy has been pretty much the norm for multiplexes since their inception.  For independent cinemas, the utilization is higher because they have fewer auditoriums and don't run as 'grind houses' as multiplexes do.  Many independent cinemas have utilization rates in the 20-30% range.

Originally, Atom's mission was to offer cinemas an automated system that would assist in increasing the utilization rate during low attendance times, such as weekday afternoons, by offering seats at lower admission prices during those times. Atom has now altered its mission. Now, it is pushing an app which makes it easy for groups of people to plan film outings. "Our hopes are that Atom Tickets triggers a social moviegoing revolution", said Steven Spielberg, a backer of Atom, "This is a big win for anyone who loves going to the movies with his or her friends." Spielberg and other backers of Atom believe they have a breakthrough technology. I'm unsure why they think this.

Atom does have a slick app which allows users to scan through movie posters of current or up-coming movie releases. Then, based upon 'predictive analytics' suggests movie tickets based on previous ticket purchases and/or your preferences gleaned through linking to your social media. For example, if you follow Brad Pitt on Facebook, Atom mines this information and  then suggests you purchase tickets for his latest film. You can also pre-order concession items when purchasing admission tickets.  Additionally, in the future, Atom intends to sell movie related merchandise such as toys, music, games, and clothing  through its website and app.

Free to download its app, Atom collects a surcharge on ticket sales from users. They claim use of their app will result in a 2-5% increase in admissions and concession orders. I don't think either claim can be achieved.

Atom's original system, which automatically reduced admission prices for film screenings that were under-attended, effectively increasing the utilization rate seems to have been scraped. It was not hard to assume that such a system would be unworkable and not subscribed to. People go to the movies when they have time and when there is a film they are interested in viewing - this is mostly on Friday evenings or Saturday/Sunday days or evenings.

CMG believes that no automated system or app, however slick and innovative will ever be able to increase a cinema's utilization rate.  Utilization increases can only be achieved by a cinema offering content that is based on local moviegoers' tastes, excellent overall service, better and varied concession, a spotless and comfortable venue, efficient staff, and an engaged and forward thinking management.

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