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.
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.
Thank you for taking the time to clarify that you were speaking with respect to economic theory. My bad, I had assumed the intangible use of “good” in the context of “this promotes life, liberty and happiness and therefore serves the public good and that does not and is therefore bad” rather than the tangible goods of the marketplace.
To summarize your explanation of the economic distinction between public and private goods, private goods lend themselves to the making of profits (capturing value) and public goods do not. The distinction seems to fall mainly to the market's ability to control access to the supply (excludable vs. non-excludable) and scarcity of supply (rival vs. non-rival).
Public education helps society in general, not just poor people. I think public healthcare would likewise improve society in general. Calling it charity is like using entitlement in a pejorative manner to refer to Social Security. People pay into the system throughout their entire working lives, so , yes – they're entitled to it.
Considering that the provisioning of healthcare through the private insurance industry can only capture value by restricting itself to those who need minimal levels of healthcare, how is healthcare for the population in general not a public good? Once a public option exists, it would be difficult to restrict access to it and so it would generally be both non-excludable and non-rival.
Libertarians have done a poor job of explaining what mechanism other than the free market they would employ to prevent racism that would be as effective as the blunt instrument of government. A hundred years of free market activity in the south did not eliminate Jim Crow. When it comes to fundamental human rights the inefficiencies of the marketplace in securing those rights is simply unacceptable.
I recall all of the situations you mentioned. I also recall that few if any of the people responsible have been prosecuted and punished for their actions. If we never prosecuted murderers, murder would run rampant too. Remove the “corporations are people and therefore have free speech rights” craziness and you'll go a long way to removing the money that fuels corruption through the influencing of elections as well as the tainting of the public interest by lobbyists. I don't deny the corruptibility of human beings, but to say we know of no way to keep people honest belies the intelligence that most of your reply demonstrates.
Mostly, I'm reminded of John Kenneth Galbraith's take on modern conservatives.
“The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
Wait... Healthcare and education are not public goods??
Is this the libertarian position? If so, then I'll have to add it to the list of why I can't call myself a libertarian along with "racism is okay".
The idea that racism is okay because "the free market will take care of it" is the main reason I scratched libertarian off my list. Libertarians seem to place more faith in the mob of humanity than I'm comfortable with doing.
Based on all the complaining that you hear from HR departments every Oct.-Nov. when group health insurance policies have to be reviewed and renewed, reason would have indicated that the public option should have sailed through Congress at the insistence of the Chamber of Commerce. But the idea of removing healthcare as a ball and chain on employee mobility was too much for the corporations to ever consider giving up in the name of good business and the public good.
Like healthcare and prisons, public education is now a prime target for conversion into a profit center by the GOP (God Of Profit ?). One of the few remaining distinctions between D's and R's is the idea that somethings should be beyond the influence of the profit motive.
Very well said. As you stated it has and always will be thus... note the life spans below the quotes.
"Give me three sentences written by the most innocent man, and I will find a reason to hang him"
Cardinal Richelieu (1585-1642)
“Laws: We know what they are, and what they are worth! They are spider webs for the rich and mighty, steel chains for the poor and weak, fishing nets in the hands of the government.”
Pierre-Joseph Proudhon (1809-1865)
"There's no way to rule innocent men. The only power government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws."
Ayn Rand (1905-1982)
(Sorry for referencing Ayn Rand but on this point she was correct.)
Techdirt has not posted any stories submitted by ohb1knewbie.