July 2, 2008

Higher priced movies?

Not many Americans care about classical music anymore, but there is still plenty of work for symphony orchestras and opera tenors because the fans who do care are willing to pay a lot per ticket.

High ticket prices were introduced to America at the 1984 LA Olympics. Back then, the $200 prices for the opening and closing ceremonies and $95 for the gymnastics finals seemed like misprints. But, the Olympics were a financial success even though the people you'd think would be less price sensitive -- the out of town vacationers for whom ticket prices are just a fraction of the total costs -- didn't show up in large numbers, and most of the crowds were composed of locals.

In contrast, movie tickets are more or less fixed in price. So, every filmmaker is competing in the same game. Julian Schnabel and Wong Kar-Wai are going head to head against Michael Bay, and they're all being measured by tickets sold. (To be precise, that's not quite true -- films that do more matinee business, more senior business, more kids business, and run in cheaper towns, make less box office revenue per ticket sold on average, but it's not that big a difference.)

Is the single priced movie ticket eroding slowly? When I started writing this post, I figured there would be evidence that we are headed toward more stratified pricing. Yet, the more I think about it, the less evidence I see for it.

For example, for about five years now, the weekend evening movies at the Arclight on Sunset Blvd. in Hollywood (the old Cinerama Dome location) have been $14. It sells reserved seats, which is a pretty stupid idea because you can stand in line to buy tickets for a half hour while the couples ahead of you debate over whether they'd prefer to sit on the left or right sides. Yet, the films shown at the Arclight are only vaguely more upscale than average. The movies it plays make it seem like more of a mass market Date Night destination than a place where the elite meet to seat themselves.

And, in general, "arthouse" tends to be a synonym for worn-down theatre on its last legs before it becomes a revivalist church for an ambitious preacher. The Laemmle arthouse chain in LA charges between $8.50 and $10 per ticket for prime times, which isn't above average for their expensive neighborhoods.

Nor is there all that much differentiation in DVD prices: the elite hit "The Lives of Others" is selling on Amazon for $14.99, while the mass market hit "300" is $13.99.

Anyway, it's kind of neat that movies remain a democratic institution with a simple-minded pricing scheme in an otherwise increasingly tiered and marketing-modeled America.

By the way, another reason live classical music survives is because it's prestigious to donate money to it. Woody Allen has somewhat adopted this model, as well. If you invest $10 million in a Woody Allen movie, you probably won't get a profit out of it. But you probably won't lose more than a few million because he never goes over budget and he has a loyal fan base. In the meantime, you get to tell all your dinner party guests that you and Woody are making a movie together. Then, when his accountant announces you're only getting, say, an $8 million payback, you write off $2 million as a business loss, although you were expecting it, so it's more like a charitable donation to the Foundation for the Making of Woody Allen Movies. It's a dignified way for an elderly auteur to get financing.

Update: In response, Ross Douthat points out that arthouses tend to carry more expensive gourmet concessions. In reply, various commenters object to my existence.

My published articles are archived at iSteve.com -- Steve Sailer

32 comments:

Big Bill said...

I would gladly have paid a premium to avoid the theaters in the South Bronx.

Nothing like a patdown by an off-duty cop to damp first date fun.

Come to think of it, though, they didn't hire the cop at the multiplex unless there was some black gangsta epic on one of the screens.

Michael said...

I like simple-minded too. And like you I marvel that movie-theater owners haven't been more determined to charge more for blockbusters and less for losers.

I wonder though if the movie-price range doesn't extend a bit further than you're allowing. Criterion DVDs, for instance, routinely go for 30 or even 40 bucks, while I often pick up used DVDs at Blockbuster at 4 for 20 bucks.

And as movie theaters go digital I bet we'll see more variations in pricing. One reason's because they won't just be showing movies. As the recent Met Opera broadcasts to a number of digital theaters showed, special movie-theater presentations can bring in 20 bucks a ticket.

testing99 said...

Steve --

Don't forget pirating. WSJ and LAT reported that AMERICAN GANGSTER was available on high quality bootlegs at LA flea markets/swap meets two weeks BEFORE it opened.

Pirating, mostly from China I think, will produce a ceiling that ticket prices will have to compete with. As will the ever declining DVD and pay-per-view window. Heck we will probably transition to "burn while you wait" at Best Buy or Wal-Mart for DVDs to compete with Amazon, and soon after that, broadband direct download.

More tellingly, I can pick up a DVD for $5 at my supermarket. It's a commodity.

As all movies are. Will Smith's HANCOCK is in competition with that $5 copy of PRINCESS DIARIES or LAST ACTION HERO or FINDING NEMO at the Supermarket.

Pricing at the Grove is for yuppies looking to impress their dates. It's probably going to go away as the Grove strangles on high gas prices and declining income. Just as say, Apple will start to lose market share to Linux.

agnostic said...

The percent of Americans who attended a classical music or opera performance within the last year, according to the GSS, was about 17% in the three years they measured it ('93, '98, '02).

That's one in six, and if the "cultural appreciation" distribution is normal, that's everyone at +1 SD and up. Sounds like the best you could hope for, kind of like if everyone with a 115 IQ and up went to college.

The percent who like classical music "very much" was also about 17% in 1993, so everyone who really digs it goes. An additional 31% said they "like it" -- they're probably listening to CDs at home every now and then, or whatever. Again if it's a normal distribution, these "like it" people round out the 0 to +1 SD range.

Can't hope for more than that.

In 2000, 9% had used the www to listen to classical music more than 2 times in the past month, and another 19% did so 1 or 2 times.

Steve Sailer said...

Take a standardized thing like PBS fundraising drive performances, which show you what middle-aged people with disposable income like. 35 years ago they'd use the Boston Pops Orchestra. Now they use the Moody Blues or whatever.

halfbreed said...

Movies have always been a great value compared to other forms of entertainment. Back when I lived in New York City I could go to the theater for around sixty bucks (in the late 80's or early 90's) or see a movie for around seven bucks. My wife preferred the theater because it made her feel classier, but I always thought, hmm, the theater features less attractive actors and actresses overacting on a very limited set. In a movie theater, for around a tenth the price, I could watch better-looking actors acting more realistically (i.e., not emoting for the cheap seats) and a lot of great scenery to boot. Hmm, tough choice.

Another fair comparison these days is between, say, a professional baseball game and a movie. I'm not a ball fan, but my friends tell me it's impossible to go to a game and get away without spending at least two hundred bucks. And you have to deal with the crowds, the traffic, etc.

On the other hand, so much of what comes out of Hollywood these days is PC propaganda, maybe they should pay us to go to movies. Still, if you can overlook their PC aspects, movies still represent the best entertainment value.

nsam said...

I wonder how the disposable DVDs for relatively recent movies are doing (they retail around $5); apparently they automatically disable after 2 days from the first time they are popped into the player

neil craig said...

People don't like being taken for suckers & while opera cost more to produce putting something on DVD or turning on the cinema projector (or whatever) costs the same whatever is on.

Concerned said...

The main reason classical music survives is because every company, from the biggest & most prestigious, to the smallest, has hired a fund raiser. Ticket prices (yep, even at $150 a pop) cover about 1/3 the cost of a performance. Think of all the stuff that goes into a classical music performance, esp. the big symphonies. None of this comes cheap.

Funding sources come from private foundations, government, and rich individuals who vie for the prestige of a board chair on the local symphony - which could be a world class institution.

A certain ballet company now gives a rich donor the opportunity to sponsor an actual dancer, sort of like back in the days of the Russian nobility having a favorite ballerina. But without the sex. (I think.)

Agnostic, Thanks for the stats. They are more encouraging than one is led to believe.

astorian said...

Agnostic- the percentages who've attended a classical music performance in the last year may well be inflated by the people who make an annual Christmas trip to see "The Nutcracker" or watch the local symphony orchestra play a patriotic medley before the fireworks on the 4th of July.

LOTS of people take in a classical performance once in a blue moon, but very few care about it deeply (more's the pity).

Anonymous said...

Speaking of PC aspects...

I saw the trailer to The Perfect Game last night...message to kids? Mexicans and blacks good...whites, racist hate mongers...

http://perfect-game
trailer.blogspot.com/

albertosaurus said...

Steve,

You are very definitely not with it. Movie theaters are the past. Home Theater is the future.

I'm an opera fan, you might say. When I was younger I used to attend two or three operas per week. That wasn't enough for me. I started my own opera company.

Thirty years ago the SF Bay Area was filled with little opera companies (and big opera companies). That's not so true today.

Yet I still watch and hear a lot of opera - in my Home Theater. I watch high (and low) quality DVDs from NetFlix and I watch YouTube. NetFlix has essentially every full length modern opera DVD ever made. For example, they have three different recordings of Mitridate, Re de Ponto - a rather obscure Mozart opera.

YouTube has tens of thousands of opera excerpts. You can hear and see a dozen tenors sing almost any popular aria.

Opera as a live medium may very well be dead but thanks to DVDs, Blu-Ray, HDTV, YouTube, and cheap home HT, the fruits of three hundred years of opera composition and production are available to everyone at home for nearly free.

I used to go to the movies a lot also but I, like almost all Home Theater owners, almost never go to a real brick and mortar theater anymore.

First of all there's the issue of expense. The last movie I saw in a real theater was Beowolf . I wanted to see a 3D movie. I saw it alone, at a matinee, and I got a senior discount. Even so it cost me about $100 counting gas, tolls, parking, lunch (while I waited), etc...

Three weeks later the Beowolf DVD was available in the Redbox machine at my supermarket. It cost me $1 to rent it for one evening.

100 to 1. Easy to remember. Of course I lost the 3D effect but I didn't have to worry about the gang violence or the gum stuck to the floor. At the theater I had a Coke. At home I had a Martini.

In general a simple Home Theater with a good source will look and sound better than almost any movieplex theater.

My modest home theater has a nine foot screen, a DLP projector, a Dolby 5.1 sound system, and a couple Barca loungers. Trust me. It has a lot of sensory impact.

It's true that I miss out on the input from the audience members but most of the time that's a blessing.

Speiberg, Lucas, and Cameron are all interested in 3D and other such gimmicks to try to get the public back into the movie theaters. They are failing.

Henry Canaday said...

Apart from "The Aviatior," the only movies I have seen in the last ten years have been in-flight movies.

There is definitely an art to making a movie that will entertain on that tiny, blurry screen while you are struggling with wires, blankets and the remainder of the in-flight chow. In fact, I am beginning to think there ought to be a special award ceremony for artists who work in this challengeing form. Call it the Best In-Flight Movie Awards, or "the coveted Bimmies."

The clear early winner would be "Blades of Glory." Not great art, perhaps, when seen in a theater or at home. But the entire row on my 767 exploded in a synchronized belly laugh when that animal ice-skater went up in flames. That's entertainment!

Anonymous said...

"Pricing at the Grove is for yuppies looking to impress their dates. It's probably going to go away as the Grove strangles on high gas prices and declining income. Just as say, Apple will start to lose market share to Linux."

Speaking to a rich friend of mine regarding gas prices, he responded, "I don't care! I make a hell of a lot of money. Gas prices absolutely don't matter to me in any way, shape, or form. None of my friends care! Stop bringing it up!"
My friend and his friends shop at the Grove. People who can afford to casually shop at the Grove, and that would be the majority, won't be affected, if my friend's attitude is any measure.
Apple provides significant service for their computer, and it's interface is superior to Linux for the average user.
This means your Aunt Hattie is not going to be buying a Linux over a Mac to get her email and store her photos, since Linux is really a populist response to computer nerds who hate Vista.
It will never take any significant market share from Apple.

Anonymous said...

With movie studio's bleeding from every orafice, thanks to bit torrent, and bootlegs worldwide, they are STILL making money, and lead actor's are STILL getting ridiculous paydays for what amounts to the "work" of a kid going to summer camp.
When movie moguls live in 4 million dollar homes, instead of 15 million dollar homes, and when lead actor's get 5 million per picture, instead of 20 million, the fair pricing for movies can be assessed.
In the meantime, Bit Torrent will be sucking the blood out of all the middle-men of movies as well as music, and overpaid "contributors" until they decide to either take a pay cut so that they are only making great money, instead of insane money, or they simply find another industry to pillage.
I recall overhearing a conversation between someone who downloaded a bit torrent of a new Bruce Springsteen album that hadn't yet been released, and someone who had a problem with it:

A; You know you're stealing money from Bruce Springsteen.

B: No. I'm stealing money from the people who are stealing money from Bruce Springsteen. Bruce is doing just fine.

no man's land said...

Halfbreed, people who complain about the quality of movies these days often aren't really paying attention to what's out there other than the most intensely marketed junk. I've seen several high-quality or at least interesting movies in theaters in the last few months: "The Savages", "Before the Devil Knows You're Dead", "The Diving Bell and the Butterfly" and "The Darjeeling Limited" to name few. Good movies are out there, you just have to look for them a little bit.

Anonymous said...

Only a bunch of antisocial shut-ins would think that moviegoing is really going to be destroyed by Netflix or widespread pirating. Smart theater owners like the Arclight people and Mark Cuban have figured out that they're not really in the movie business, they're in the date business. And seeing a movie is still one of the most affordable date options out there, certainly compared to live music or the theater or a professional sports event. And the two or three dollar premium you pay at a place like that means a nice seat, no commercials before the film, a decent picture and sound quality, and most important of all, no talking and texting teenagers or idiot families who decided to skip the babysitter and take a screaming baby or young child to an R-Rated movie. I'll gladly pay a small premium to not have to watch a movie with those people.

astorian said...

I have a 4 year old at home, so I rarely get to see mainstream movies (let alone art housefare) any more.

But I'm curious if the cuisine available at the art houses is changing. After all, concessions are where theaters make most of their money.

I know kids are still drinking Cokes and munching popcorn while watching "Iron Man" at the multiplex... but have the art houses started serving lattes and tapas to the people watching documentaries and subtitled gay love stories?

mka said...

"but have the art houses started serving lattes and tapas to the people watching documentaries and subtitled gay love stories?"

Yes, actually, some of them have. I've even seen sushi sold at art houses.

steve wood said...

First of all there's the issue of expense. The last movie I saw in a real theater was Beowolf . I wanted to see a 3D movie. I saw it alone, at a matinee, and I got a senior discount. Even so it cost me about $100 counting gas, tolls, parking, lunch (while I waited), etc...

Wow. Either you live in some incredibly remote, distant place and inexplicably chose to drive into the middle of a big city to see a movie that was playing at every suburban multiplex in America, or you're counting the bottle of champaign you smuggled into the theater.

Tomorrow, I plan to see Hancock. I also will go alone to a matinee; I'm not old enough yet for a senior discount. It will cost me approximately $13.52: $8 for the ticket, $5 for a medium Coke; and $0.52 worth of gas to make the three-mile round trip to the multiplex, which has a spacious, free, parking lot.

Perhaps my experience is cheaper than average, but I think most people will fall closer to my end of the scale than yours.

no man's land, I agree with you. There are plenty of good movies, especially for people willing to look beyond the latest brain-dead action pic or rom com and who don't expect every movie to be Gone With the Wind. And, even though I'm a bit of an anti-social shut-in myself, I also agree with anonymous that there's more to movie-going than just seeing the movie. People enjoy the shared experience; otherwise, why would people still go to football and baseball games that they can watch at home for free?

Besides, who wants to wait to see a movie that you're dying to see? It's like taping an episode of your favorite TV show and waiting for a few months to watch it.

If people were going to stop attending movies, they would have stopped years ago - as, indeed, many have. But the business lives on because lots of people love movies and enjoy going to see them in a theater.

Anonymous said...

I dunno - I think most of you guys are cheapos. If an outing at the movies or a baseball game is costing you $100-200 then you aren't very good at sniffing out deals and are using high prices to justify staying home to your wife/kids.

I'm in my mid-40s and go to the movies several times a month for two reasons: I like to see action movies on the big screen and I like movie popcorn. We have a respectable home theater with Blu-Ray, HD, a 46" widescreen tv (soon to upgrade to a 60" LCD) with a serious receiver/speaker system and a subscription to Netflix but I still like going to the movies in a theater. I don't like watching with lots of other people or teenagers, though, so I go to early morning weekend matinees. Here in upscale Anaheim Hills in the OC there is a theater that is all DLP (so clear - like watching a movie at home) and charges $4 for a matinee before noon and $5 until 6 pm. Even their evening movies are pretty cheap - only $8. They just remodeled it so it has big cushy, rocker seats with wide aisles. Going to the movies is my escape from my kids. However, when we do take the kids its only $20 for the tickets for the family. How can you beat that?

As for baseball on the cheap, the Angels have a family fun pack where you can get 4 upper view tickets, 4 hot dogs, and 4 sodas for $39. If you don't want to go to those games, they still offer a family meal deal for 4 hot dogs and drinks for $16. My in-laws live in Boston and they go to minor league games 'cause the Sox are too expensive.

Geronimo McTavish said...

I think enough people still enjoy the big screen.

And, before the early '80s movies made most of their money from theatrical release. Before VHS there was nothing to follow on. Well with piracy and all we right back to the future (pun sort of intended).

testing99 said...

Anon -- Best Buy already has the infrastructure "Geek Squad" to push low-cost boxes with a standard Linux, dumbed down, with a Mac-like interface. Probably Ubuntu.

Aunt Hattie can't afford Apple prices anymore with $5 a gallon gas. She can afford a stripped down linux PC like the Asus EE. Heck it's cheap, fast, and yes linux based. Apple can't lower their prices because their whole play is being "snobby." They can weather the recession/depression, but those Ipod sales are gone. So too pricy laptops. In favor of cheap wintel boxes using Linux. Food and gas are going through the roof, so people WILL cut back.

Starbucks closing 600 stores? Yep.

Other Anon -- Cuban's not that smart. "Date" movie is yes, the primary market but you're looking at a small segment. Hint -- it's not 1968 anymore. SENIORS OUTNUMBER YOUTH by 8 million. It's probably not enough to make money in a recession.

"Dying to see a movie?" For most people there are so many substitutes for movies, there's no real "dying to see a movie." That box set of say, "24" or every episode of South Park ONLINE and FOR FREE, or heck Hulu.tv or the other places with free tv streaming. It's true that date-night is powerful, but there's not that many dating people (the result of the baby bust).

People still think it's 1968 again. Baby bust means seniors count more.

Peter said...

The main reason classical music survives is because every company, from the biggest & most prestigious, to the smallest, has hired a fund raiser. Ticket prices (yep, even at $150 a pop) cover about 1/3 the cost of a performance. Think of all the stuff that goes into a classical music performance, esp. the big symphonies. None of this comes cheap.

Symphony orchestras might not be so dependent on hat-passing if their boards of directors could learn to say "no" every so often to musicians' and stagehands' union demands. I'm not saying that the unions don't deserve to be treated well, but that does not mean that they should get everything they ask for, without question.

A couple of years ago I read about a symphony orchestra, a traveling one that plays in different venues in different cities, that was actually making a profit off ticket revenues. It hired musicians from Eastern Europe and Russia, who were quite talented and, crucially, willing to work for substantially less money than American musicians. I don't remember its name and don't even know if it's still in operation. No doubt the unions had it in their sights.

Lucius Vorenus said...

I think the best action these days is in television.

HBO's Rome, Big Love, and Carnivale, Showtime's Dexter & The Tudors, SciFi's Stargates & Battlestar Galactica, NCIS on CBS, Sarah Connor Chronicles on Fox - there just aren't that many movies anymore which are as good as these television shows.

And with television you have weeks and weeks and weeks to develop a plotline - years even, if you're confident that your series will get renewed.

HBO's Rome might have been the single greatest dramatic event of my lifetime - it was certainly the best television I've ever seen in my life.

Anonymous said...

To respond to Mr. Sailer's post, I think that so-called art houses are inclined to charge less for movie tickets than multiplexes, rare plush theaters like Arclight being the exception. It seems that Mr. Sailer came to this conclusion himself after first supposing that the opposite was true.
The teenagers who visit the multiplexes every weekend to see the latest action sequel based on a comic book--they're paying, for the tickets, the soda, the popcorn and candy, with their parents' money. Conversely, followers of Schnabel, say, might read a disappointed review and opt to view his latest work at home on the big screen with a bottle of wine. This would explain why the art houses in my suburban California community are down at the heals while the 21-screen megaplexes are abuzz and aflutter.

The Anaheim poster who pointed out that the Angels are fairly inexpensive is right. Baseball is by far the cheapest major spectator sport. Each team plays 81 home games, so the 40,000 tickets on sale each night don't have to cost $500 to pay the players' salaries.

I have trouble believing that a fifth of Americans follow classical music. The number I've heard, which correlates with CD sales and with my own eyes, is that approximately 3 percent of Americans care for it. Even that figure seems high.

albertosaurus said...

People seem to disbelieve that it cost me $100 to see Beowolf. This troubles me. How much better the world would be if everyone would just accepted everything I say on faith. Sigh...

First of all I wanted to see Beowolf because it was being shown in 3D. Digital 3D was being reintroduced because of falling theater attendance from home entertainment competition. This is exactly the same reason why 3D was introduced fifty years ago. I wanted to see it for myself.

Even after investing millions in upgrading theater equipment there is only one theatre in the SF Bay Area where 3D is shown - the Sony Metreon. I don't live in a remote area but its still 20 miles to downtown SF. At $5.00 a gallon that's about $100.00 for the round trip. The Bay Bridge toll is $5.00.
.

They actually have two different types of 3D at the Metreon. The clerk mixed them up and I had to wait over two hours for the feature to start. I therefore had to buy brunch in the Metreon complex. That was about $30.00. I bought a $5.00 Coke at the candy stand. It had taken me nearly five hours to see my movie which brought my parking to $36.00. The movie ticket was about $10.

Why was I seeing a matinee? I had tried to see Beowolf a previous weekend with a date. I bought two tickets online for about $40. She got caught in traffic and got to my house too late to make the curtain. I couldn't get a refund.

Add it all up and its well over $100.

Most of the problems in this horror story were from travel and scheduling - problems that don't obtain when you watch a movie at home. Developers have started to build Home Theaters into new tract housing.

The end is near for traditional movie theaters.

Steve Sailer said...

If you had needed babysitting, that would have added another $50 or so.

Anonymous said...

The rightish Atlantic bloggers have the worst commenters in existence.

Anonymous said...

I don't live in a remote area but its still 20 miles to downtown SF. At $5.00 a gallon that's about $100.00 for the round trip.

I assume you meant $10.00. 20 mpg is much more reasonable than 2 mpg.

Sailer's right that dating gets expensive for married couples no matter how cheap entertainment options are. Me and the wife have actually ended up doing more high-cost dates (theater, symphony) because once you factor in the babysitting costs the percentage cost difference between these and 'cheaper' dates is not so large.

Heh. Maybe we've just discovered the reason for adultery. Dating someone else is cheaper because your spouse watches the kids.

steve wood said...

People seem to disbelieve that it cost me $100 to see Beowolf.

I believe that it cost you $100, but it was not a typical movie-going experience. What you sought was, basically, a special event - only playing at one venue, even in a major metropolitan area, and playing in a location that required significant travel and parking expense. In other words, your experience was more akin to a concert, theatrical production or sporting event than to a visit to the local multiplex to see a movie in wide release.

For example, some movies are platformed in NY and LA before coming to Philadelphia. I could easily spend $100 or more to see a movie in NY, but it wouldn't be fair or accurate to generalize that it costs me $100 to see a movie.

As for whether people are still "dying to see" (as I put it) certain movies: I have seen the trailer for the new X-Files movie several times now. On each occasion, there has been an audible reaction - in one case, clapping - from the audience as soon as it became clear what we were seeing. Some movies DO still excite widespread public interest and crowds at the theaters that consist of more than just teenagers on dates.

Rebelyell said...

I just thought I would share that the movie theater in my small town charges $3 for adults and $2 for children. Until six months ago children were only a dollar. There's a dollar store in the same strip mall, so I can get the kids a bag of candy before we go in.

Currently showing:
Hancock
Wanted
Wall-E