No One Wanted To Pay $30 For In-Home Movie Rentals... So Now Universal Will Try $60?

from the is-this-a-joke? dept

There are times when I wonder just what various entertainment industry execs are thinking (or drinking or smoking, as the case may be). Back in April we laughed at the idea that people would be interested in paying $30 for video on demand for a movie, just because they could get it a little bit before it came out on DVD. The $30 price point was just too high. And, of course, it didn't take long for the news to come out that... $30 was just too high and almost no one bought.

So what do you do if that plan fails? Well, if you're smart, you look at more reasonable price points. If you're not... you raise the price. Yes, that's right. Universal, with the assistance of parent company Comcast, is now going to test the preposterous $60 video on demand offering. The reason for the jacked up price? Because it'll come out on VOD three weeks after being released in the theaters -- at which point the film will still be in the theaters. The test is also going to be done on what the studio hopes is going to be a blockbuster: Tower Heist, starring Eddie Murphy, Ben Stiller and Matthew Broderick.

Here's what's wrong with this: the studio is thinking about this from the studio's perspective and not the consumer's perspective (at all). Of course, this is NBC Universal we're talking about, so that's not particularly shocking. In the studio world, release "windows" are everything. And each later release window is less and less of a big deal. So it's totally natural to them to think "gee, if we move up the release window, that's more valuable, so let's jack up the price." But a consumer isn't thinking about release windows. A consumer is thinking "I want to watch a movie. I could go out to the theater, or I could watch it at home." And then they look at the option at home... and if they can, say, watch a film at no additional cost from Netflix... or if they can grab a movie at Redbox for $1... and they compare that to $60 for video on demand, who's actually going to do that? The pricing is insanity.

Even funnier, however, was watching how the theaters totally freaked out over the original $30 plan, as they do with any plan to shrink the precious "window" between the theatrical release and any other kind of release. This is because theater owners don't know what business they're in. They think that they're in the content business, when they're really in the business of selling their seats. The fact that theater owners thought they couldn't compete with an insane $30 rental suggests that they don't know how to provide a good experience.

And, of course, now that there's an even more ridiculous $60 price point, you would think that the theater folks would chuckle and say "hey, we can compete with that, no problem." But it appears theater owners may be even more unable to comprehend the mind of the consumer than the execs at NBC Universal. Thus, Cinemark is already warning that it will boycott the movie if Universal goes forward with this plan.

In the meantime, it's also worth noting that the theaters convinced a bunch of big name Hollywood directors to sign an open letter to the studios protesting these kinds of "early" VOD releases. One of the names on that letter, by the way? Brett Ratner. The director of Tower Heist. Embarrassing... He is, of course, trying to distance himself from this trial, noting that he wasn't informed of it until the day before it was announced and had nothing to do with it. Of course, that's part of what happens when you do a deal like this. The studio owns the project, and they can do whatever they want with it.

Either way, don't expect too many people to pay up for this experiment. It almost makes you wonder if the idea is to make it fail on purpose.


Reader Comments (rss)

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  1.  
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    Cloksin (profile), Oct 7th, 2011 @ 10:42am

    Huh??!!

    Is it just me or are these people living in a different reality than the rest of us?

     

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  2.  
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    AdamR (profile), Oct 7th, 2011 @ 10:51am

    Gotta love the new Wall St./bank/airline math. When you cant think jack up fees. When people have no choice, or think its just the way its suppose to be jack it up even further. When it fails to bring in the huge numbers blame piracy, illegal immigrants, and third world countries and cry to the media and government and jack up the fees higher.

     

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  3.  
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    Planespotter (profile), Oct 7th, 2011 @ 11:12am

    lol, just wait for cinema owners to start complaining about movies being rented within the same viewing window that they want a monopoly on.

     

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  4.  
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    Anonymous Coward, Oct 7th, 2011 @ 11:13am

    Pirates stole the VOD..... nothing left for consumers to buy

    Just waiting to hear how this failed miserably due to pirates 'stealing' all the VOD streams, not leaving any streams for the fools, er customers, who would have been willing to fork over $60.00 to bend over, grab their ankles, and cough, er watch a video on demand...

     

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  5.  
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    gorehound (profile), Oct 7th, 2011 @ 11:16am

    MAFIAA is so behind the times they will never catch up.We will forever be playing the whack a mole game.
    I boycott you MAFIAA ! $60 a movie.................you are the biggest thieves going.
    Why would anyone want to pay that much money to sit and watch a film in their home.If you had made it $20 people might not be angry.You just keep on showing your true face.

     

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  6.  
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    Charles (profile), Oct 7th, 2011 @ 11:16am

    Blockbuster?

    Not with Eddie Murphy and Ben Stiller- just my two cents.

     

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  7.  
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    Anonymous Coward, Oct 7th, 2011 @ 11:18am

    The Mpaa companies need to get some new business managers. Because that parrot they hired only seems to be able to say "raise the prices, aaawk, raise the prices".

     

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  8.  
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    bt, Oct 7th, 2011 @ 11:24am

    Why?

    If the theaters are fighting $60 like they fought $30, it is not a fight about the AMOUNT of money at all.

    They know no one will really go for the $60. But they also know that the Studios will, once the release window taboo has been broken, steadily re-price until they do have customers and the theaters will have a new level of competition.

    Though in the end, neither business seems all the clued-in, as the writer concludes. Someone else will come along and eat both of the lunches most likely.

     

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  9.  
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    Anonymous Coward, Oct 7th, 2011 @ 11:24am

    "No One Wanted To Pay $30 For In-Home Movie Rentals... So Now Universal Wil Try $60?"

    Forgot an L on the Will there.

     

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  10.  
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    Ninja (profile), Oct 7th, 2011 @ 11:26am

    Release that exactly at the same time the movie goes to the cinemas and I might get it and watch with like 10 friends at home. It should be fun that way. And cheaper than going to the theaters.

    But uh, yea... Fail.

     

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  11.  
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    Anonymous Coward, Oct 7th, 2011 @ 11:27am

    How do these people have jobs? If I get a lobotomy, will I get a promotion in their corporate world?

    It's one thing to ignore the realities of the File sharing world and believe that eliminating that will bring untold billions in profit, but this? This service would get laughed out of every single Econ 101/Business 101 class it's just nonsense. I guarantee you 0 market research was done on this product and some executive needed something to justify his job.

     

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  12.  
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    AdamR (profile), Oct 7th, 2011 @ 11:28am

    Sadly I understand their POV, but more tragically is this type of thinking should have never left the meeting room. I guess to many know it all on the pulpit and blind kiss ass's saying your right and awesome reverend his holy light.

    Executive 1: I was talking to my masseur, and i came with this ideal of charging people sixty bucks to watch a three week old my movie on VOD!

    Executive 2: Man that's brilliant, who the hell wants to go to a theater and deal with all those hassles, when you can watch it in your home theater room on a 103in plasma with 7.1 THX sound and while your rocking back on your Corinthian leather reclining chair.

    Junior executive: but want about home distraction?

    Executive 2: Hmm, well i just watch when my consirge is doing my shopping and ill let my house servants know not to disturb me.

    Chief Executive: This all sounds good let me run this threw my yoga instructor and the personal escort I'm going to having dinner with tonight.

    Executive 1: Good I have the boys in the propaganda department err mean marketing department make up dam highlight all the benefits consumers get from this.

     

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  13.  
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    Anonymous Coward, Oct 7th, 2011 @ 11:30am

    Re: Why?

    Ding! You got it. It's amazing that an econ major like Mike can't see the obvious.

     

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    fairuse (profile), Oct 7th, 2011 @ 11:30am

    Made My "Laugh of the Day Headline"

    The whoe situation sounds like a bad "Three Stooges" script from the paper shredder and the executives at Universal are running the production as is.

    Yes there is an implied [sic] in this message.
    .

     

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  15.  
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    Anonymous Coward, Oct 7th, 2011 @ 11:34am

    Re:

    This has disaster written all over it. Even in the more expensive movie theater ticket markets, this rental cost is still the price of about 5 prime time weekend tickets...to watch at home...once.

    The sticker shock alone will kill it when all the other movie watching options are sooo much cheaper. It's even twice the cost of a Bluray, which the average consumer has already deemed too expensive (Bluray adoption has been very slow).

     

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  16.  
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    Jay (profile), Oct 7th, 2011 @ 11:35am

    Re: Huh??!!

    There is not enough Face to Palm ratio for how much fail this is...

    One small suggestion. One SMALL idea that could help the industry make thousands of dollars on the project. It doesn't cost much, it makes them money, and they don't have to understand a lot of third derivative economics to get it:

    Make the DVD available at the same time as release!

    This is not a hard concept! Make it all available at the same time and you damn near kill pirate incentives. It's amazing! You sit there and you count your money, then you calculate how ALL of your partners are making money. But no, the industry doesn't think that way. They think they can kill people wanting content at the time that they want it, WHEN they want it, not the industry. They continue to complain that the millions they make are not enough and people are just thieves when there's evidence that they pay for things they *want* and actual scarcities!

    Sad day to realize that the people paid to think in Hollywood are overrated morons.

     

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  17.  
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    ok, Oct 7th, 2011 @ 11:37am

    HA! That just shows how little you know...

    "This is because theater owners don't know what business they're in. They think that they're in the content business, when they're really in the business of selling their seats."

    Nahh. They're really, actually in the concessions business. They make next to nothing on the ticket even though they need to get people in the door to make the real money.

    I'm Just Saying.

     

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  18.  
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    atroon, Oct 7th, 2011 @ 11:41am

    Re:

    Nah, that refers to Wil Wheaton.

     

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  19.  
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    jupiterkansas (profile), Oct 7th, 2011 @ 11:43am

    Re: Re: Huh??!!

    Not to mention they can do all their marketing in one blow, thus making it much cheaper to market a film, leading to more profits.

     

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  20.  
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    Wiggs (profile), Oct 7th, 2011 @ 11:43am

    Re: Why?

    So, given past history, we should expect their next re-price to be $120 per stream and be available as VOD the same day as the theatrical release?

     

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  21.  
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    hothmonster, Oct 7th, 2011 @ 11:45am

    Re: Re: Huh??!!

    You mean I could see a movie in theaters, love it and buy a DVD full of deleted scenes and extra features before I even leave the building...no thats stupid.

     

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  22.  
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    SiliconJon (profile), Oct 7th, 2011 @ 11:46am

    Still Not Biting

    Not until it reaches a quadrillion dollars, and only if it's an Austin Powers movie.

     

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  23.  
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    hothmonster, Oct 7th, 2011 @ 11:52am

    "Only 10 people bought the 30 dollar movies, we need more profit"

    "Well if we double the price and move up the release maybe we can get 6 people to watch it, increasing our profit."

    "GENIUS!"

     

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  24.  
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    hothmonster, Oct 7th, 2011 @ 11:54am

    Re: Re:

    "Bluray adoption has been very slow"

    Is that a price issue or do people just not see the benefit of replacing their working dvd player?

    "My dvd player still works and i don't need higher Ps"

     

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  25.  
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    Rikuo (profile), Oct 7th, 2011 @ 12:03pm

    Re: Re: Re:

    Well...if blu-ray players were the same price or near to the same price as DVD players, I'd expect a sharp increase in sales. Sure they may say they don't need higher P's, but if you can get a better picture quality for the same price...why not?

     

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  26.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:03pm

    Re: Re: Re: Huh??!!

    But...But...But...

    They don't want more profits in the film production company, as that would result in the Actors and contracted parties to get a higher cut of the profits.

    They want to be able to pay their CEO's brother's company to re-run the same marketing campaign 3-4 times per movie, with the studio paying the full 'development' cost that they paid for the first marketing campaign, this allows them to siphon another $500k to 1 million out of the movie and into their buddies pockets, while sticking it to the actors who thought they might actually get a cut of the profits at some point in the future...

    Just because it's sick and twisted doesn't mean it's not reality ;)

     

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  27.  
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    The Mighty Buzzard (profile), Oct 7th, 2011 @ 12:07pm

    Re: Huh??!!

    Well, they certainly have different laws than the rest of us.

     

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  28.  
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    Lord Binky, Oct 7th, 2011 @ 12:09pm

    Well, now that I've thought about it...

    I can run a quite impressive little personal movie theater... I mean, throw a party with uh... manditory donations. Anyways, I get to see the movie without dealing with a crappy theater, if I get 15 friends to donate $5 each for the repeated showings over my rental window, I cover the cost of the rental as well as get a little money out of my home theater setup.... Thank you hollywood.

     

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  29.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:14pm

    They should be selling alcohol at theaters, it's always a profitable business.

     

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  30.  
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    The Mighty Buzzard (profile), Oct 7th, 2011 @ 12:16pm

    Re:

    One showing $20? Nope, I'd still be pissed. If I want to go see something in the theatre, I go see it there. If I want to watch it at home, I want to be able to do it whenever I damned well please, at outstanding quality, however many times I want to watch it, and I don't want to pay over $10-15 for it. If they can't supply at least that much, there are avenues than can for the low, low price of nothing.

     

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  31.  
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    Lord Binky, Oct 7th, 2011 @ 12:27pm

    Re:

    I do at my personal home theater, I will have great prices too, my overhead isn't much at all.

     

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  32.  
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    Wiggs (profile), Oct 7th, 2011 @ 12:27pm

    Re: Well, now that I've thought about it...

    The Federal Copyright Investigation Commission (FCIC, established as part of ACTA) has dispatched agents to your location to ensure that you are paying the proper 'public performance' fees to the copyright holders for this party. Since you and all of your friends are 'members of the public', this is clearly a 'public performance' and therefore you will be fined the not unreasonable rate of $10,000 per attendee.

    Have a nice day.

     

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  33.  
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    harbingerofdoom (profile), Oct 7th, 2011 @ 12:29pm

    Re:

    i know id be more inclined to go...

     

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  34.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:29pm

    Re:

     

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  35.  
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    sehlat (profile), Oct 7th, 2011 @ 12:30pm

    Re:

    Quote: They should be selling alcohol at theaters, it's always a profitable business.

    ORLY? Aren't theaters unpleasant, unsanitary, and distractingly noisy enough without drunks throwing up on you because they're watching an Eddie Murphy/Ben Stiller movie.

     

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  36.  
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    Anonymous Anonymous Coward, Oct 7th, 2011 @ 12:32pm

    Re:

    But! But! But! This is innovation. New business ideas don't just appear, you have to be a leader.

     

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  37.  
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    Chosen Reject (profile), Oct 7th, 2011 @ 12:36pm

    Re: Why?

    You might have a point here. The theaters (wrongly, but I digress) don't want that window broken, no matter the price. It's kind of like a federal sales tax, I suppose. The arguments now are that it will be low so no worries, but some people thankfully see it for what it is; a foot in the door. So maybe the theaters are seeing this now for what it may become. Once the studios know it can work, then pricing it for max effect kicks in and studios start to lose their window. Again, the theaters are thinking wrong here as well, but I can see what you're saying.

     

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  38.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:45pm

    What's really shitty about the whole thing is the studio makes all the money on ticket sales during the 3 week exclusive window. Then when it's turn for the theaters to start making profit, the studio is trying (poorly) to rake in the cash and cut the theaters out.

    And they call "us" the pirates.

     

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  39.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:45pm

    What's really shitty about the whole thing is the studio makes all the money on ticket sales during the 3 week exclusive window. Then when it's turn for the theaters to start making profit, the studio is trying (poorly) to rake in the cash and cut the theaters out.

    And they call "us" the pirates.

     

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  40.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:45pm

    Re: Huh??!!

    It's you. And everyone else here.

    This is without question, one Masnick's most moronic, clueless posts ever.

    There is so much fail here I don't where to begin, but to pick one example, Pirate Mike appears to not grasp that Universal is taking a flyer on the consumption habits of the wealthy. There is no risk. And they aren't introducing it for any other demographic than that one.

    I could then go off on his "theaters are in the business of selling seats, not content", but it is so blatantly idiotic that I would never know when to stop.

     

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  41.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:46pm

    What's really shitty about the whole thing is the studio makes all the money on ticket sales during the 3 week exclusive window. Then when it's turn for the theaters to start making profit, the studio is trying (poorly) to rake in the cash and cut the theaters out.

    And they call "us" the pirates.

     

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  42.  
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    hothmonster, Oct 7th, 2011 @ 12:46pm

    Re: Re: Re: Re:

    Certainly, my point was just people don't see the need to replace a working DVD player for a Blue-Ray. But if they both cost near the same and you need one, I think most people would go with blue-ray. But then again you can buy a DVD player for 30$ these days, so I don't see them having the same price point for a long time, if ever.

     

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  43.  
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    hothmonster, Oct 7th, 2011 @ 12:47pm

    Re: Re: Re: Re:

    Certainly, my point was just people don't see the need to replace a working DVD player for a Blue-Ray. But if they both cost near the same and you need one, I think most people would go with blue-ray. But then again you can buy a DVD player for 30$ these days, so I don't see them having the same price point for a long time, if ever.

     

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  44.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:47pm

    Re: Re: Re:

    It's a little of both for the Bluray. It's not worth the price of the upgrade for the disks and/or player.

     

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  45.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:47pm

    Re: Re: Re: Huh??!!

    But that would make accounting simpler and Hollywood accounting more difficult. More profits means more payments to everyone that actually helped create the film, rather than lining the pockets of the execs.

     

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  46.  
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    Some Other AC (profile), Oct 7th, 2011 @ 12:47pm

    Re: Re: Re: Re:

    This is actually becoming reality. Of course, DVD players are also dropping in price, but that would be expected with older technology. I purchased my WiFi enabled, Netflix playing and other media source accessing BD player for $80.00 last Black Friday. Recently I have seen normal sales for Network connected BD players in the $50.00 range with WiFi units running around the $80.00 range on "normal" sales.

    Honestly, as ignorant as I think this move by the Studio is, I can go catch a current release, non-3D, movie for $4/ticket at the local Cinemark theater during matinee times, which covers all show times prior to 6PM. Add in that we usually "bring" our own snacks and split 2 large drinks for a family of 4, our over all cost for the showing is about $25 or less for the Big Screen. If we want to see the 3D option it is only $7/ticket for matinee.

     

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  47.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:49pm

    I wonder if they're banking on the "Wow this one costs twice as much as that one, it must be twice as good!" mentality.

    Who knows, jack the price up enough and they just might, indeed, have a blockbuster!

     

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  48.  
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    Anonymous Coward, Oct 7th, 2011 @ 12:50pm

    Re: Re: Why?

    Nope, once they have broken the window, the next re-price will be in the $20 range... then down from there until they find the market.

     

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  49.  
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    holdenough, Oct 7th, 2011 @ 12:59pm

    Reverse psychology...

    These guys just HAVE TO BE Republicans, the thought process is the same -- too close to be a coincidence. Taxes were at 90%, the highest marginal tax bracket in history, But, things worked fine -- jobs were created, and the economy grew, most everyone was happy. As time went on, they gradually lowered the top marginal tax rate until it reached 39% -- jobs were still created and the economy grew. We even got a balanced Federal budget for a short time.

    Then, Bush lowered the rate of the top tax bracket even further to 36 1/2%. At that point, and not before that, job creation slowed down and eventually shifted into job LOSSES. The US economy stalled and stopped growing, rather it started to contract. Unemployment soared from the 5%-6% range to over 9.2%. The Federal government as well as many state governments were running out of money.

    Now, you'd think that the sensible thing would be to bring tax rates back to what they were before all this started to happen - we'd go back to the 39% rate of before, maybe 40% just to be sure that we came out of this Great Recession as strong or stronger than before.

    But, no, say the Republicans -- the answer is to further "starve the beast" and lower taxes even more! Typical Republican reaction -- get caught in a lie, and rather than admit it and move on, to double down and insist in the face of all evidence to the contrary, that they and their ideology are right regardless of the evidence.

    I think the Republicans THINK the economy is like a colon cleanse -- things get worse, before they get better! In the meantime, 99% of the country suffers through unemployment, poverty, hunger, lack of health care -- all because the Republicans have some ideological idea of what is right rattling around in their pointy, little skulls! Going back to before with a tried and true solution... No, that doesn't match their fantasy! So, here we are! Up the creek without a paddle and idiots trying to steer the boat!

     

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  50.  
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    Lord Binky, Oct 7th, 2011 @ 1:00pm

    Re: Re:

    Sounds like a fun bar if it wasn't a movie theater.

     

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  51.  
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    hothmonster, Oct 7th, 2011 @ 1:01pm

    Re: Re: Re: Re: Re:

    "Add in that we usually "bring" our own snacks"

    SNACK PIRATE!!! but but the law. Apparently we need the TSA to start checking ticket lines

     

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  52.  
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    The Groove Tiger (profile), Oct 7th, 2011 @ 1:01pm

    Re: Re: Huh??!!

    Shut up TD staff. How much did Mike pay you?

     

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  53.  
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    Anonymous Coward, Oct 7th, 2011 @ 1:04pm

    Re: Re: Re: Huh??!!

    double secret reverse shills?

     

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  54.  
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    Anonymous Coward, Oct 7th, 2011 @ 1:12pm

    Re: Re: Huh??!!

    You obviously have no idea how a theatre works. All theaters make most of their profit via concessions. First the first x weeks a movie is released, the studio takes like 80-90% of the ticket rake. After x amount of weeks the studio drops their claim to the stakes to like 50-60%. Then after x more weeks, when no one is going to see that particular movie any more, the studio takes like 20% of the rake. During those x weeks, the theatre makes it's profit off large profit margin items like high-priced popcorn and candy and sugar water. So when Mike says they are in the business of selling seats, he is more or less accurate as the mire seats they sell, the mire money they rake in via concessions, which they do not have to kickup to the studios. See how that works? Please have a clue before you comment on something. Thanks.

     

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  55.  
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    Chris Rhodes (profile), Oct 7th, 2011 @ 1:29pm

    Re: Reverse psychology...

    Stopped reading after "Republicans". If you can still cling to your petty partisan bullshit after everything we seen go down in the last 50 years, then nothing you write is worth spending the time to read.

     

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  56.  
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    Anonymous Coward, Oct 7th, 2011 @ 1:31pm

    Re: Re: Re: Huh??!!

    If a theatre sells tickets for $10 each and they have 20,000 people come see it in the first weekend, they bring in $200,000 revenue and kick up $160-180K of it to the studios. Net profit = $20-40K. Now if just a measly 25% of those 20,000 spend just $10 on concessions (and that's only like a small popcorn and a small sugar water), the theatre makes $50K revenue of which they only have to cover their costs and wages. And I'd argue the % buying concessions as well as the average dollar amount spent is much higher.
    So its rather obvious that a theatre is making a helluva lot more on concessions purchased by those that purchase seats than the ticket sales themselves. If you want to support your local theatre and not the studios, wait a few weeks before going to a new release. Studios would wake up pretty quickly if their first few weeks' take dropped significantly.

     

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    khory (profile), Oct 7th, 2011 @ 1:32pm

    Re: Re: Re: Huh??!!

    Yup, and now the theaters could get a cut of some DVD sales by selling copies to people that just saw and loved a movie.

    Heck, the could even offer an exclusive theater edition to make their version more desirable AND give people that collect such things an incentive to visit the theater in the first place!

     

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  58.  
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    aguywhoneedstenbucks (profile), Oct 7th, 2011 @ 1:39pm

    Re: Re: Re: Huh??!!

    I can't believe Mike would get one of his staff members to purposefully misconstrue something so badly so that he could make the other side of the argument look like crap.

    That guy must be a professional straw man. I want that job.

     

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  59.  
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    Anonymous Coward, Oct 7th, 2011 @ 1:39pm

    Re: Re: Re: Re: Huh??!!

    Actually, it's a little more devious than that. They pay a company to handle two marketing campaigns, one for the cinema release and one for the DVD release.

    This marketing company is an LLC owned by the studio and they overpay them, thus, making movies like Lord of the Rings and Spiderman appear to have lost money.

     

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  60.  
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    Anonymous Coward, Oct 7th, 2011 @ 1:45pm

    Re: Re: Huh??!!

    Have you been to a theater before? How can someone not see how right Mike's statement is? Do you just go to any old ratty theater or try to hit the one with the nicest seats, best picture, etc?

    Theaters #1 goal is to get people to buy admission to their building and buy overpriced concessions. They don't care if it's Spiderman 4 or Exclusive youtube videos that bring you thru the door.

     

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    Mike Masnick (profile), Oct 7th, 2011 @ 1:49pm

    Re: Re: Huh??!!

    I could then go off on his "theaters are in the business of selling seats, not content", but it is so blatantly idiotic that I would never know when to stop.

    "We sell tickets to theaters, not movies." -- Marcus Loew, theater mogul

     

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  62.  
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    Cloksin (profile), Oct 7th, 2011 @ 1:53pm

    Re: Re: Re: Huh??!!

    Now THAT is a great idea!

     

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  63.  
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    Casey-Mahoney-Bradp (profile), Oct 7th, 2011 @ 1:58pm

    crazy

    Neflix learned a hard lesson doubling their fees.$60.00 is nuts!!

    Thanks Casey Mahoney Bradp

     

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  64.  
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    Cloksin (profile), Oct 7th, 2011 @ 2:00pm

    Re: Re: Huh??!!

    "I could then go off on his "theaters are in the business of selling seats, not content", but it is so blatantly idiotic that I would never know when to stop."

    Oh really?!

    Well here is an example of theaters doing something Mike has been saying they need to do for a while now, offer a better experience, part of the CwF+RtB concept.

    http://www.nj.com/news/index.ssf/2010/08/nj_theaters_to_be_redesigned_t.html

    How about theaters offering "dinner and a movie" all under one roof without having to leave your seat.

    Kinda dispels YOUR AC point!

     

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  65.  
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    John Fenderson (profile), Oct 7th, 2011 @ 2:10pm

    Re: Re: Re:

    A bit of both.

    Bluray provides no significant benefits over DVDs, unless you are running a high quality home theater system -- which most people aren't. So few people have any incentive to replace perfectly good DVD equipment.

    Even when it's time to replace a DVD player, and even with Bluray getting cheaper, DVD players are also getting cheaper. So people still go DVD. And why not?

    Plus, Bluray comes with nasty DRM, meaning that you either have to let the player phone home or you have to accept that your player will eventually stop playing new bluray disks. This is a a real deal-killer for me and many people I know, such that even if bluray was cheaper and better, I wouldn't touch it.

     

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  66.  
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    Anonymous Coward, Oct 7th, 2011 @ 2:10pm

    Re:

    If I get a lobotomy, will I get a promotion in their corporate world?

    Likely. The corporate world is not driven by intelligence, ethics, thoughtfulness, courage, fairness, or anything like that. It's driven by greed. Raw, pure, unadulterated greed. So if you want to succeed, you will need to discard all the better parts of your persona, and focus on stuffing as much money into your pockets as you possibly can without the slightest regard for anyone else.

    The CEO seat will soon be yours.

     

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  67.  
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    John Fenderson (profile), Oct 7th, 2011 @ 2:15pm

    Re:

    Two of the most popular theaters in my town do this. They also have comfy couches instead of standard-issue theater seats. You know what they don't have? First-run movies! And yet, almost every showing is to a full house.

     

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    surfer (profile), Oct 7th, 2011 @ 2:15pm

    Re: Re: Huh??!!

    I think this is a bit harsh on overrated morons.

     

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  69.  
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    Anonymous Coward, Oct 7th, 2011 @ 2:26pm

    Re: Re: Re: Re: Huh??!!

    You know how many times I bought a CD from some no-name band I went to see, liked, and bought an album from the girl at the door pimping CDs? It's a great idea but the first time that better-than-a-screener DVD ends up online would send the studios packing on that idea.

     

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    Cloksin (profile), Oct 7th, 2011 @ 2:29pm

    Re: Re: Re: Re: Re: Re:

    Now there's an incentive to go to the moview, free body gropes (the movie goer of course being the gropee).

     

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  71.  
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    Anonymous Coward, Oct 7th, 2011 @ 2:34pm

    Re: Re: Re: Re:

    Blu-Ray is Sony's format which means they get a cut of every player sold. Not wanting any of my money to ever go to Sony is the reason I will never, ever own a Blu-Ray player. I don't own a DVD or CD player any more either. The days of distribution via physical media is almost over.

     

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    The eejit (profile), Oct 7th, 2011 @ 2:45pm

    Good to see the MAFIAA still trying the Eminent Domain argument on their "products".

     

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  73.  
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    Gill Bates, Oct 7th, 2011 @ 2:47pm

    Re: Huh??!!

    It's not just you.

     

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    Gill Bates, Oct 7th, 2011 @ 2:53pm

    I no longer go to theaters

    I used to go a lot, a couple times per month.

    Now I haven't been in years.
    Why??
    Because of the ever increasing prices and the crappy surroundings. Yeah, sure $20 for a tub of popcorn, to sit in a hot theater, with sticky floors and kids all over, just what I want.

    I will never pay $60, $30, $20 or even $15 for a VOD movie.

    If it was a real hit that I actually wanted to see I might go $10.

    I would be VERY INTERESTED in knowing how many people actually fork out $60 to see a movie, because I'd probably be surprised at how many suckers there out there - no matter how small the number.

     

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    Will Best, Oct 7th, 2011 @ 3:08pm

    price points

    Lets say they sold 100,000 viewings at $30. If they can sell 70,000 at $60 then they can make money on selling it.

    It reminds me of Star Trek DVDs which were selling for $90-100 a season where pretty much every other drama series sold for $50-60. Why? cause the people that love star trek are price insensitive.

    I am going to stereotype but I suspect a good number of people here are single and or without children. Babysitter + tickets + gas + concessions costs you $50-60. So $30 was actually a pretty good deal for doing a date night in your home, and at $60 you are getting the same price you would have going to the theater. Now, to be fair you can have your date night in your house with a lot of cheaper movie options. But there are other advantages to your own home.

    You can drink alcohol, have a conversation, lay on a couch, presumably you can pause the movie to go to the bathroom. After a film has been out for a few weeks finding a convenient time is kind of difficult. So you will always be able to optimize the timing.

    As other people have suggested throw a party. So there is value to the service. Their problem isn't so much the $60 but that their target market is tiny. People that are willing to wait 10 weeks after release but aren't willing to wait the 20 weeks for the DVD.

     

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    out_of_the_blue, Oct 7th, 2011 @ 3:08pm

    Re: Reverse psychology...

    @"holdenough": Republicans don't recall that the Laffer curve IS a curve, not a straight line. You CAN'T reduce tax rates indefinitely and get more tax revenue.

    I wrote "Republicans" early on there so "Chris Rhodes" would stop reading. He's clearly afraid of a 2nd opinion pushing the one he has out of his tiny mind.

    That said, I'm NOT for higher taxes as such nor re-distribution, but only as means of social control to suppress The Rich from taking over in outright plutocracy. That's Populism. It's the only counter to the trends of the last fifty years, just as Roosevelt's policies actually DID rescue "capitalism" after decades of rampant financial crimes, including a world war.

     

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    BigKeithO (profile), Oct 7th, 2011 @ 3:15pm

    Re: Blockbuster?

    This. Movie studios are clueless, this movie will flop. Badly.

     

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    out_of_the_blue, Oct 7th, 2011 @ 3:17pm

    Re: Re: Re: Huh??!! -- @Mike and "We sell tickets to theaters, not movies."

    Marcus Loew (May 7, 1870 – September 5, 1927)
    Great up to date quote, DINOSAUR!

    You're living in the past the quote is from. Theaters NOW compete with various experiences at home.

     

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    out_of_the_blue, Oct 7th, 2011 @ 3:22pm

    Re: Re: Re: Huh??!! @"Cloksin" -- Mike quotes Marcus Loew (May 7, 1870 – September 5, 1927)

    Should check out whether Mike is at all /current/ before you leap to defend, fanboy.

     

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    monkyyy, Oct 7th, 2011 @ 3:34pm

    Re: Re:

    u mean the current model sucks?

     

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  81.  
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    out_of_the_blue, Oct 7th, 2011 @ 3:35pm

    Re: @ triple-posting "Anonymous Coward"

    Guessing from your mastery of how to post here, you chopped at least one of your hands off when you decided to become a pirate.

     

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    monkyyy, Oct 7th, 2011 @ 3:56pm

    Re: I no longer go to theaters

    im betting 3 total buy the 60$ movie

     

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    Anonymous Anonymous Coward, Oct 7th, 2011 @ 4:40pm

    The Peter Principal

    I never agreed with the Peter Principle. It leaves out the fact of management decisions. Managers decide on promotions, often for not the best reasons. Good, bad or indifferent, every decision is managements fault, whether they are present or not. It is up to them to make sure the organization makes good decisions, so the failure is theirs alone.

     

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    Anonymous Coward, Oct 7th, 2011 @ 4:42pm

    Re: Re: Re: Re: Huh??!! -- @Mike and "We sell tickets to theaters, not movies."

    Exactly. They need to focus on the differences that their version of the experience provides rather than the movie itself, which is the same in all forms.

    In other words, the quote still stands.

     

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    Togashi (profile), Oct 7th, 2011 @ 4:49pm

    Re: Re: Re: Re: Huh??!! -- @Mike and "We sell tickets to theaters, not movies."

    You're living in the past the quote is from. Theaters NOW compete with various experiences at home.


    Right, they compete with home experiences... which means that now it's even less about the content and more about the seats/experience. It used to be that if you wanted to see a movie, you had to go to the theater. Now the same content is available all sorts of ways, so they have to focus on other things to make people want to see it with them instead of at home.

     

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    Phillip Vector (profile), Oct 7th, 2011 @ 4:59pm

    Cinetopia

    Since we are talking about theaters, have to give a shout out to one that ruined me for other theaters. Seriously.

    http://www.cinetopia.com/

    If you are in the Portland, Oregon area, you OWE it to yourself to go. Other theaters will pale in comparison. They know how to fill seats. :)

    and no. I don't work there and have no ties to them (except it's the only place I watch movies away from home).

     

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  87.  
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    Anonymous Anonymous Coward, Oct 7th, 2011 @ 5:13pm

    Re: price points

    I love price elasticity. However if the quality (either in product or service) is not there, then the illusion of value at higher price points will not exist.

     

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    Jay (profile), Oct 7th, 2011 @ 5:16pm

    Re: Re: Reverse psychology...

    " Roosevelt's policies actually DID rescue "capitalism" after decades of rampant financial crimes, including a world war."

    No, they didn't. The US went from a debtor nation to a creditor nation because its lands weren't destroyed in WWII. Also, the policies he put in place such as Social Security, are now crippling the US economy because by and large, the baby boomer generation is far larger than the X and Y generations combined. You can't pay into it as much as that one generation is getting out of it.

    His policies more or less built worthless buildings, fueled America based on a lie, and entrusted one entity to give the US funds rather than the government does it themselves.

     

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  89.  
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    lucidrenegade (profile), Oct 7th, 2011 @ 6:19pm

    Re: Re: Huh??!!

    I like how Magnolia does it. Put in on PPV for like $6 a couple of months BEFORE it hits the theater.

     

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    lucidrenegade (profile), Oct 7th, 2011 @ 6:23pm

    Re: Re: Re: Re: Huh??!! @"Cloksin" -- Mike quotes Marcus Loew (May 7, 1870 – September 5, 1927)

    08/2010 isn't current enough for ya? If you're gonna troll, at least make an attempt to do it correctly.

     

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    lucidrenegade (profile), Oct 7th, 2011 @ 6:24pm

    Re: Re: Re: Re: Re: Huh??!! @"Cloksin" -- Mike quotes Marcus Loew (May 7, 1870 – September 5, 1927)

    Oh, and keeping with today's theme...

    Go fuck yourself

     

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    nasch (profile), Oct 8th, 2011 @ 10:21am

    Re: Re: Huh??!!

    Voted your comment funny, thanks for the laugh.

     

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    nasch (profile), Oct 8th, 2011 @ 10:27am

    Re: The Peter Principal

    I never agreed with the Peter Principle. It leaves out the fact of management decisions.

    No it doesn't, it attempts to describe the effect of management decisions.

     

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    Hephaestus (profile), Oct 8th, 2011 @ 8:30pm

    Re: Re: Re: Re: Huh??!!

    No way! Thats a stupid idea ... think of the microwave popcorn farmers!

     

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    ohb1knewbie (profile), Oct 9th, 2011 @ 12:43am

    Re: Re: Re: Huh??!!

    After spending 25+ years working in the movie exhibition industry, I have no more love for the movie theater business. However in fairness to the industry that kept a roof over my head and food on my table as well as, for a time at least, gave me an enjoyable way to spend eight to twelve hours a day, I have to speak in their defense.

    While it may be true that movie theater companies do not always do all that they could to provide an outstanding experience for their customers, to say that they fail to understand the business that they're in is unfair. Theater companies are in the concession business. The exhibition of feature films is a necessary incidental function of their business, albeit one without which they would have no business at all.

    If you think the film studios are putting the screws to the film viewing public, rest assured it's nothing like the treatment that they've been giving the theater companies over the last forty years. In exchange for providing film product to the theater chains, the theaters pay film rent to the studios through the film distributors.

    The way that the contract structure traditionally worked has undergone tremendous changes over the last forty years. Film rent is based on a percentage of ticket price. Forty years ago a film rent of sixty to seventy five percent would have been considered standard. Differences in this range would be a reflection of the anticipated drawing potential of a film based on genre, cast, and the director's past history. This rate of film rent would apply to the first two to four weeks of the films run, and again would vary from studio to studio and film to film. After the initial weeks of the film's run the film rent would be stepped down so that in the six to eight week period and then again in the ten to fourteen week period the movie theater company would make an increasing amount of each ticket sold.

    This meant that in the mid-seventies for a movie like “Tootsie” staring Dustin Hoffman that had a run of about twenty six weeks in large to midsize markets, for the second half of the run the theater company could pay as little as thirty to forty percent in film rent rather than the initial sixty to seventy five percent.

    This scheme worked well for both the distributors and the exhibitors through the early eighties when movie theaters generally had one, two, or at the most six screens. Things changed for the worst in the mid-eighties when economies of scale pushed theater companies into a war of multiplex one‑upmanship. Once multiplexes had twelve to twenty four screens they soon found themselves in a catch-22 trap. They were given the choice of playing new releases in two to four of their largest auditoriums for the first four to six weeks of a film's release, and thus “bleed” the film out during the high rent period, or not playing the film until it's sixth week of release – if at all. This was coupled with an increase in the initial film rent from the 60-75% range to a range of 80-95% which left the exhibitors with no recourse but to raise the already high concession prices into the stratosphere that you see today.

    The sizes of drink cups, the sizes of popcorn bags or buckets, and the ounces in packaged candy were increased 25-50% and prices were doubled or tripled in order to make up for the lose of revenue from tickets sales that resulted from the double hit of increased film rent and shorter runs that became the norm in the mega-multiplex era. If every ticket holder that comes through the door were to bypass the concession stand each and every time they went to a movie theater, every national theater chain would be out of business within six months. Such is the reality of the economics of movie exhibition in today's market. You can't pay staff and overhead off of 5-10% of the box office plus diminishing concession sells on a six week film run.

    I think this should put into perspective why the exhibitors are so very sensitive to any movement by the studios and distributors to further weaken the one remaining area where they still have any advantage over home viewing – the ever shortening window of exclusivity of availability of films in traditional movie theaters.

    No amount of increase in the movie viewing “experience” will enable the exhibitors to offset the ever diminishing revenue available to them considering the vampire like combination of high film rents, multi-screen “bleeding”, and ever shorter in theater film runs. The film studios will soon have bled the golden goose for it's last drop.

    I apologize for the length of the post, but I think you can see this subject strikes a nerve with me.

     

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    PaulT (profile), Oct 9th, 2011 @ 3:27am

    Re: Re: Re: Re: Re: Huh??!!

    "but the first time that better-than-a-screener DVD ends up online would send the studios packing on that idea"

    You mean like now, when studio leaks mean that they're often available first week of release? Yet again, you literally don't know what you're talking about if you think cam copies are the majority of "pirate" content...

     

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    PaulT (profile), Oct 9th, 2011 @ 3:31am

    Re: Re: Re: Re: Huh??!! -- @Mike and "We sell tickets to theaters, not movies."

    "Theaters NOW compete with various experiences at home."

    Yet, 2011 is already the highest grossing year in history... That has fuck all to do with release windows, which are incidentally one of the biggest incentives to pirate.

     

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    PaulT (profile), Oct 9th, 2011 @ 3:36am

    Re: Re: Why?

    Yeah, he's so clueless he referenced it in the article!

     

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    nasch (profile), Oct 9th, 2011 @ 7:23am

    Re: Re: Re: Re: Huh??!!

    While it may be true that movie theater companies do not always do all that they could to provide an outstanding experience for their customers, to say that they fail to understand the business that they're in is unfair. Theater companies are in the concession business.

    See, you misunderstand the business they're in too, or else you misspoke. Theaters are not in the business of selling concessions - even if that's where they get their profit. They are in the business of selling a movie experience. To claim their business is selling concessions is to completely fail to view the business from the customers' perspective, which is a recipe for disaster.

     

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    The eejit (profile), Oct 9th, 2011 @ 9:33am

    Re: Re: Re: Re: Re: Huh??!!

    To be fair, at least they have the experience of working; not like the morons running the studios, who seem like they've never worked an honest day in their lives.

     

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    ohb1knewbie (profile), Oct 9th, 2011 @ 3:29pm

    Ha Ha Ha ROFLMAO...

    Re: “To claim their business is selling concessions is to completely fail to view the business from the customers' perspective, which is a recipe for disaster.”

    “Sorry”, “perhaps” I should have used “sarcasm” quotes? No not really, but I will do full disclosure and state for the record that I have turned fully to the cynic side as I've aged.

    Any business is in the business of making a profit and their primary focus will always be whatever it is that facilitates that.

    Do also you believe that Google and Facebook provide you with “free” services because they like you? Do you think that Wal-Mart decides what to place on their aisle end caps based on what is most convenient for you? Or that Starbucks is better decorated than Waffle House because they have better design sense?

    Corporations exist for the purpose of creating value for shareholders, anything else they cause to happen is a by product of that goal. Human beings are nothing more than profit centers to corporations, and are subdivided into two types of profit centers - “human resources” and “customers”.

    This is not to say that Starbuck's design and layout is not meant to appeal to the customer's desire for a pleasant atmosphere, of course it is, but to think that they would go to the trouble if they could still charge three times the price for coffee that Waffle House charges without doing it is foolish.

    Marketing is nothing more than corporate psych-ops deployed to manipulate human beings in order to separate them from their money. The fact that you enjoy the experience and feel good afterward is, to use my earlier phrase, a “necessary incidental function” which they would quickly drop for cost savings it they could do so while maintaining their profit margins.

    You seemed to have missed my main point, but that could be my fault for providing too much background information. The bottom line is this, improving the “movie going experience” will not save the theaters from their emanate demise because the current film rent contract structure will continue to result in the demand for tickets being exhausted during the high rent phase of a film's run, therefore increasing attendance will mainly profit the studios and not the exhibitors if only box office receipts are considered.

    As a side note, I have been out of business for about ten years now but the last I knew most alternative movie theaters were in the “second run” category. Those theaters that operate on a dinner theater or pub theater theme were not, in my experience, allowed to run new releases “day and date” with traditional movie theaters. This means two things with respect to film rent and box office receipts. They generally paid much lower film rent because most of the demand for the film had been depleted and they charged much lower ticket prices in refection of this lower demand. Both of these had the result that second run theaters still saw most of their profit from the concession portion of their operations.

     

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    fairuse (profile), Oct 9th, 2011 @ 4:59pm

    Re: Re: Re: Re: Huh??!!

    You get an insightful for this post. I am just a movie buff and have noticed how the movie theater has changed. Now I have a better idea of the root cause of the changes. Sad story.
    .

     

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    nasch (profile), Oct 9th, 2011 @ 6:33pm

    Re: Ha Ha Ha ROFLMAO...

    Any business is in the business of making a profit and their primary focus will always be whatever it is that facilitates that.

    Only the US Mint is in the business of making money. Everyone else has making money as an objective, generally the primary one and sometimes the only one. But that isn't the business they're in, or else it's completely meaningless to even discuss it. So let's use a more useful definition.

    Do also you believe that Google and Facebook provide you with “free” services because they like you?

    I'm not sure what it is you think I wrote. I never said anything businesses doing things because they like their customers, I was talking about understanding what service or product it is that their customers value.

    The fact that you enjoy the experience and feel good afterward is, to use my earlier phrase, a “necessary incidental function” which they would quickly drop for cost savings it they could do so while maintaining their profit margins.

    Sure, and if they could set up their business so that customers would walk in and deposit cash in a lockbox in exchange for nothing, they would do that. Neither scenario exists in this reality.

    You seemed to have missed my main point, but that could be my fault for providing too much background information.

    Your points seemed to be 1. theaters are in the business of selling concessions, and the fact that there are movies there too doesn't really have much to do with their business (which I disagree with) and 2. theaters have been squeezed by the studios and are getting squeezed more and more. This is quite right, and someone will have to figure out a solution or the business will become unprofitable.

    You can't have second-run theaters without first-run theaters. What happens if the big chains like AMC start folding because they can't charge enough to cover their costs? The studios start losing the places to send their movies to make millions of dollars. Movie studios killing a golden goose, imagine that. And it all has nothing to do with piracy (not that you were claiming that).

     

    reply to this | link to this | view in thread ]

  104.  
    icon
    Niall (profile), Oct 10th, 2011 @ 5:12am

    Re: Ha Ha Ha ROFLMAO...

    If you are selling 'concessions' then yo are in competition with McDonald's, Burger King, etc. If they are trying to compete with them, then they need a much better experience since most cinema food sucks even more than other fast food - the only difference being that you can get hot dogs and popcorn.

    As a consumer, I'm sorry. I don't see why I should pay through the nose for concessions unless they are either *really* good quality, or there is something else about the experience that is worth the ridiculous prices charged. I'd far rather spend $2 on a can of Coke and a small bag of Butterkist that I bring in with me. That's my choice as a consumer (albeit one who can't afford to go to the cinema very often anymore, but used to go a lot). If I get forced to buy overpriced concessions, I'll just not go at all.

    If their model sucks, they need to push back at the film companies instead of doing the usual 'bleed the consumer' - or they will find that the consumer will vote with their wallets - and time - and just not come.

     

    reply to this | link to this | view in thread ]

  105.  
    identicon
    JBDragon, Oct 10th, 2011 @ 8:28am

    Prices!

    Remember when a VHS movie you wanted to buy was $60 or even more??? Few paid those prices and rented, and of course later on they dropped more and more to what they sell at these days.

    How about a few years ago that one company allowing you to BUY a Movie and even Copy it to a DVD, of course the DVD was DRM infested and would only play on your PC and was more expensive then just buying the DVD someplace else. Of course it FAILED! Anyone with half a brain could of told them it would have.

    There's never going to be a movie made where I'd pay $60 to see it 3 weeks later at home! I'd have always watched it at the theater in the first place release day if it was that good. This whole concept is so completely wrong and dumb and won't sell. They'll of course blame it on Pirates!

     

    reply to this | link to this | view in thread ]

  106.  
    identicon
    Anonymous Anonymous Coward, Oct 12th, 2011 @ 4:17pm

    Re: Re: The Peter Principal

    Then one does not rise to one's own level of incompetence. They rise to managements level of incompetence.

     

    reply to this | link to this | view in thread ]

  107.  
    icon
    nasch (profile), Oct 12th, 2011 @ 9:10pm

    Re: Re: Re: The Peter Principal

    Then one does not rise to one's own level of incompetence. They rise to managements level of incompetence.

    I think you're just playing word games here. If Joe is promoted up to a level where he's no longer competent, if the decision to promote him was incompetent that doesn't invalidate the law. It's just an additional unrelated conclusion.

     

    reply to this | link to this | view in thread ]


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