Technology and the Beginning of the End of Theater

There are a number of storms brewing on the horizon for the motion picture industry some of their own making and some in changing technology and changing social structure. We know that technology has allowed people to become more isolated at the same time as it allows people to stay connected. Never are we far away from a cell phone or a Blackberry but also people spend a lot of time staring into their computer monitors when once they might have been talking to people. Think about this. At home I have a 46′ DLP technology High Definition television set, a surround sound system and a comfy couch. Now remind me why I want to go to a stuffy smelly multiplex to pay $9.25 a person to watch the latest film in an uncomfortable chair with a sticky floor and some annoyingly loud people sitting behind me. It just doesn’t make sense.

The movie industry is getting squeezed from both ends. For one movies are costing more than ever to make. The average price for a big budget studio film is now 60 million dollars. Yet less and less people are going to the movies. Now why do the movies cost so much? Well there are certainly a number of factors that go into movie costs. Certainly the audience expects a lot so there are more sets with greater detail and many many special effects. And yes it is true that special effects are time and labor and hardware intensive but the one thing big studios won’t admit is that once you figure out what you are doing and get the right people and the right hardware together that the costs for special effects go down just like the costs for pcs have gone down over the past two decades. True raw materials for sets are more expensive especially in areas like California where building is still booming, but the market trends for that are self limiting as well. The one item on a film that has no boundary and trends in no direction but up is the salary of star actors and directors. Just as in sports the salaries paid to entertainers has skyrocketed out of all proportion. If the average big film budget is 60 million what kind of film do you get if 20 million goes to your star? You only get a 40 million dollar movie plus the face and name of your star on your billboard. The other question is, are these people getting paid well based on their abilities? We do live in a Capitalistic society and it is everyone’s right to get paid as much as they can get someone to pay them. The question that Hollywood should be asking itself with its current structure is; where is the responsibility and the risk involved in making these films and paying these tremendous salaries. Again to look at sports players many leagues are venturing into salary caps to hold down costs. In large part they do this by using incentive laden contracts. Imagine, instead of making 20 million a picture Jim Carrey makes 5 million a picture and the rest in dependent on how well the picture does. Do you think there would have been a Simon Birch or a The Majestic? Not unless Carrey believed in the material. Maybe this would cause even greater conservative work on pictures. Everything would be a sequel. Or maybe it would increase the quality of the films coming out of Hollywood since not only an actors name, but their wallet, would hang on the performance of a film. What it would help to do would be to reign in rampant costs that could hopefully be passed down the distribution chain to consumers.

Even though greater technology has decreased the costs of mass producing DVDs their price did not change dramatically over time until there were a number of lawsuits brought against price inflation in the movie and music industry. Now a DVD hovers around 15 dollars and it seems to be staying there. Which means that it costs more for two people to see a movie in the theater once than it does to buy it and watch it as many times as you want at home. Even Blockbuster the most annoying company this side of Microsoft and Ticketmaster has realized they were losing people. Given competition from NetFlix and expanded OnDemand and pay-per-view in most major cable regions Blockbuster has changed their format being more lenient on late returns and discounting mass renters at least in some markets. Not that this means I’ll drag myself down to Blockbuster in a vain attempt to spend five dollar to rent a movie they may or may not have in stock. But it may make their service more palatable to some.

Now back to films. The movies cost more so the distributors, that grey shady area between the movie studio and the movie theater, are pushed to make to film a hit. This means more spent on expensive advertising campaigns as well as overexposing the movie by maximizing the number of theaters it opens in. Because what the industry is seeing is that opening day is all important. There are no word of mouth blockbusters and the sleeper hit is harder to come by. This means getting the largest number of warm bodies into the theater on the opening weekend. Because if a theatrical release doesn’t have the I saw it the day it started vibe, it doesn’t have much of anything.

This means that distributors have to make much of their money back by charging theaters more and more to rent the reels for viewing. Now with Star Wars they experimented with putting the film on hard drives for release but the method proved expensive and cumbersome. Though I have no doubt that improved compression schemes will make the actual media that films are presented in more cost effective that is again not where most of the cost of doing business is coming in. In response theater owners keep jacking up ticket prices to the 10 dollar range in most major markets (LA and NY passed 10 dollars a few years ago) and charging 6 dollars for a small bucket of popcorn. Unless theater owners add something to the theater going experience that makes it worthwhile to get off of the couch audience attendance is going to continue to decline.

Of course this all goes back to the news that this is the worst box office in years, but I really can’t blame people. Why drive to a stuff theater to wait around to watch a movie for eight dollars a person when you can snuggle up on the couch with your refrigerator nearby and watch the same movie only a few months later. It is now in the hands of filmmakers and theater owners to give viewers a reason to go back to the movies en masse meaning reasonable prices, quality films, and that little something extra of an experience.