It’s no secret that, aside from blockbuster revenue from big franchise films, movie theaters are struggling to pull in the big audiences they once did. Many theater chains have tried to combat this downward trend by upgrading to recliner seats, full-service meals, and even built-in playgrounds. Despite the attempts to lure in more moviegoers, the large theater chains have also had to consider trying to get a cut of the newest ideas for video-on-demand.
With DVD and Blu-ray sales lagging, studios have been looking into offering new releases to home viewers much earlier than before. The most recent model is to offer new films around 2 weeks after their theatrical release for rental in the $25-$50 price range. The new proposals have gained more traction with exhibitors, since they offer direct deals between theaters and studios rather than cutting in a middle man.
As rising ticket prices have driven many consumers away from movie theaters on opening day, one of the obvious concerns about new releases on-demand has been the cost. Now Pittsburgh-based market-research firm CivicScience, Variety reports, has found that those concerns are justified. A recent survey found that only 5% of respondents were “definitely” willing to pay $50 to see a new film at home, on the same day it opens in theaters. At $25, the potential consumer base rose to a mere 13%.
The survey of 1800 moviegoers in February and March revealed that a large majority deemed day-and-date home video too expensive. But studios like Fox, WB, Universal, Sony, Lionsgate, and Paramount, which have all been trying to make deals with exhibitors for just this type of offering, will likely take heart by these recent findings. CivicScience CEO John Dick says that 5% interest spread out over all U.S. consumers is still a “tremendous number,” with approximations working out to about 13 million people willing to pay $50 per film. Lower the price point to $25 and that number jumps to 34 million.
Dick also adds that survey respondents often have a knee-jerk reaction to what they consider “too expensive,” but when they later factor in the amount of money they spend on multiple tickets, concessions, and other expenses, a $25 to $50 price tag will no longer seem unwise. Survey respondents list both price and convenience as the main reasons they no longer attend movies at the theater, so it seems likely that this type of deal could become a very viable plan for studios.
So far, serious talks with exhibitors have been looking at a home release date that still allows some time for an exclusive run in theaters. “Event films” still typically make the bulk of their money in the opening weekend, so neither studios nor exhibitors may want to cut into those profits with a same-day option. It may pave the way for smaller films to make more money, however. If families can watch at home for a relatively affordable price, it could make them more willing to gamble on a film they might not have trekked out to the theater for. It could also tap into a market of moviegoers who no longer go to the theater at all, and prefer to enjoy a film at home without distractions.