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A Subscription-Based Movie Theater
When the local movie theater in Oakhurst, California went out of business, residents were stuck without a way to watch films on the big screen without driving for at least an hour beforehand. Now, three men are trying to resurrect the theater with one major change: instead of relying solely on ticket sales, their business model revolves around subscriptions. From the article: 'They ran models of Nelson's subscription-based theater idea, showing that to break even they would need 3,000 people, or 15% of the mountain communities, to sign up. For $19.95 per month, a member would be able to see each movie one time and buy individual tickets for friends. Non-members could buy a $16 day pass. While researching the theater business, Nelson learned that studios are transitioning to digital distribution. Thousands of independent theaters that couldn't afford equipment upgrades have closed over the last 10 years, according to industry experts. Hundreds of others — which, like the Met, still show print films — remain on the brink. The subscription business model could pay for the new equipment.'
When you have a free "movie ticket for everything" you start going to see stuff you would not have seen otherwise. $20 a month is not a bad deal. I'd totaly take that.
I don't know about you, perhaps I am an old fuddy duddy, but I can't imagine that 15% of residents would go for that. I personally go to cinemas barely once per year and a lot of the folks I know are similar. Okay, there is the day pass options, which would work, but if their business model relies on 15% as being the critical mass needed, it seems a bet with some rather long odds.
And while $20 a month does pass for itself after two movies, are you really going to go to see that many movies? Are there even that many new movies coming out these days - let alone that many worth watching?
Now, if the cinema was playing older movies or classics along with the new releases, that might start to get interesting.
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Similarly, I just went to go see The Hobbit earlier today with a coworker (my supervisor, in fact...we skipped out of work early since he wanted to see it), and it was $4 for each of us. To say the least, the theater was packed, despite the fact that our college town is virtually empty while everyone is gone for the holidays. Mind you, this isn't some trashy theater in a seedy part of town either. It's a standard Cinemark in a good location with all of the usual amenities you'd see in an urban center (digital projectors, 3D, XD, and whatever other marketing terms they've invented since I last looked). I think the reason our prices are so low is because our area has around 200,000 people, 50,000 of whom are fickle college students that will go to whichever theater is cheapest, and there's a Premiere theater just down the street that has shown a willingness to closely match the prices Cinemark posts up.
I've always heard that the concession stand is where the money is at in a theater, and if that's true, I don't know why they're not dropping prices on tickets to get more butts in seats. As it is, higher ticket prices just encourage people to spend more time and money at home with their own entertainment setup.
This is my local theater.
Last night they announced that they hit the 3,000 subscriber mark they were shooting for and will make a go at opening.
I wish them the best, though I think there are still some very big questions to be answered about the viability of the business model. Will the studios go along with it? Will subscriptions _remain_ high enough after the buzz fades away to be a viable business? I hope so, but only time will tell. The local economy is almost entirely tourism based, and their model effectively shuts out tourists who I think will be reluctant to shell out $16 for a day pass - so long-term local support is essential.