Movie Industry: A Business Model That Will Fail….

“Biggest Opening Day Ever”

“Biggest Opening Weekend Ever”

These are the typical headlines you see with any given high budge movie opening. The latest is Pirates of the Caribbean: Dead Man’s Chest which has laid claim to a $55M opening day.

But what does it really mean? Sure, $55M is a lot of money, but does it really equate to more profits or more success than any prior film?

Nope.

According to Box Office Mojo, Pirates was playing on more movie screens on opening day than any prior movie save for Spider Man 2.

It only beat the #2 movie — Star Wars: Episode III – Revenge of the Sith — because it played on more screens. Star Wars had a higher per theatre dollar take.

The whole thing is cooked. If you look at the highest dollar value openings over time, not only is the number of theaters critical, but the number of days used to define “opening weekend” has gotten longer!

Opening weekend is now often designed as Wednesday to or through Monday, if there is marketing value in claiming a huge opening weekend.

And, of course, the average ticket price has gone up over time. Average cost in 1986 was $3.71US and now it is somewhere around $6.50.

Eventually, this numbers game will fail. It may take a while as the average movie goer is generally too ignorant to realize how the market is manipulated (Gee! Most popular opening Ever! Must Be A Good Film!).

The market will be saturated with theatres and the movie marketeers will run out of days of the week to include in the “opening weekend”. People are already uncomfortable paying upwards of $25 for a couple to go to a movie (including popcorn). Much higher, and more customers will be driven away.



6 Responses to “Movie Industry: A Business Model That Will Fail….”

  1. NeuroGuy says:

    It’s already happening… theaters are hard pressed to match historic numbers, even in dollars, much less ticket count.

    Theaters will have to adapt to offer a better experience than the consumer’s own home theater. Think better food, cocktails, service… turn going to a movie into a total experience. (Lengthy commercials may have to go, too…)

  2. bbum says:

    I sincerely hope that you are right.

  3. John C. Randolph says:

    I remember a great movie theater in Chicago. Couches, tables, waiters, and movies like Young Frankenstein and Monty Python and the Holy Grail. It beat today’s multiplexes all to hell.

    -jcr

  4. Dan Mahoney says:

    …except that POTC2 opened on a friday (technically just after thursday 11:59PM)…even if you calculate the weekend as being longer — as far back as wednesday, it wasn’t running on those nights.

  5. bbum says:

    The numbers for POTC2 were for the opening day at the time this post was made.

    As per the opening weekend, while POTC2 is setting revenue records, it also debuted on the 3rd largest set of screens ever (more than the former first place opener — Spider Man). Yet, even though it POTC2 generated $132M in revenue vs. Spider Man\’s $114M in revenue, it only garnered a handful more actual moviegoers.

    In other words, that POTC2 broke Spider Man\’s record is largely because ticket prices are higher and not because the movie is that much more popular. Given that it opened on many more screens that SpiderMan to service only a few more eyeballs, it is likely that the costs associated with the revenue are significantly higher.

  6. Adrian says:

    I wonder how all this bragging about revenue fits in with the lamenting about online piracy

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