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    This is the personal blog of Simon Kendrick and covers my interests in media, technology and popular culture. All opinions expressed are my own and may not be representative of past or present employers
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Disconnected cinema thoughts

I go to the cinema on a frequent basis. But particularly over the past month, I’ve been thinking about several aspects of the medium.

They are all random thoughts so, rather than flesh them out over a series of posts, I’ve listed them below in a single (rather long) entry. Several, if not all, have been more than adequately covered by people with far more expertise in film than I, but nevertheless…

My motivation to attend

My frequent cinema attendance is behavioural economics in action.

I have a Cineworld Unlimited card, which I have just renewed. Across the 12 months of my first card, I saw 80 films. Yes, more than one a week. Across the previous 12 months, I saw one film – at my local Odeon.

This is a relationship of mutual benefit. Rather than pay £8.50 to see a film, I paid an average of around £1.50. I benefit from cheaper entertainment.

Cineworld benefit in several ways

  • Space capacity – of my 80 visits, only 3 or 4 screenings have approached full capacity. This improves their efficiency
  • Atmosphere – More attendees creates more of an atmosphere – This can be good or bad (see below)
  • Associated revenues – My tickets show a value of £3, rather than £8.50. Film studios take around 70% of box office revenue. Cinemas make their money from the refreshments. Bringing in more viewers extends their ability to sell highly profitable salty and sugary snacks. Though in my case, it is the neighbouring Sainsbury’s that benefits from my regular Dr Pepper and Minstrels.
  • Market share – I am travelling a slightly longer distance to go to Cineworld, rather than the more convenient Odeon. They are also able to influence the choice of film I see – because of my Unlimited card I am wary of paying to go to another cinema to see a film that Cineworld isn’t carrying
  • Growing the market – Cineworld aren’t just in the cinema business but the leisure business. By spending more time in cinemas, I am spending less time (and money) on other leisure and entertainment activities. Two notable examples are that I now go to far fewer music concerts than I used to, and also buy fewer DVDs

In conclusion, the Unlimited card is a fantastic business model.

The experience

The impact of crowds

As mentioned above, a more crowded cinema creates an atmosphere. This can be both good and bad

  • The more people, the “bigger” the experience – for good or bad. According to this, we tend to view experiences better than products, since they are harder to judge and compare.
  • Some genres, such as broad comedies and schlocky horror films, really benefit from the laughs and screams surrounding you. Drag Me to Hell is a great example of my enjoyment of a film being amplified by the people around me
  • However, crowds can also lead to disruptions. In a few screenings I’ve been to, a group of teenagers have been compelled to share their pearls of wisdom to the entire room. At least until they were kindly asked to leave by the security guard.
  • And, every so often, there will the misfortune of sitting next to or near to a person that fidgets, eats and slurps loudly, talks to themselves or kicks the nearby chairs. Or, in a recent example of my own, all of the above

3D and Imax screens

3D and Imax are evidently attempts to combat piracy by trying to convince people that the cinema will offer a unique experience. I’ve had negative experiences with both

  • Imax is only impressive if you are sitting in the absolute centre of the cinema. Sitting to one side means that you will retain your peripheral vision. Cinemas should offer variable pricing depending on the placing of seats to reflect this
  • Avatar is now the highest grossing film of all. It wouldn’t have achieved this in 2D – not only because 3D films cost more to see, but also because many people went as a novelty to experience 3D for the first time. This will have diminishing returns. In my view, 3D doesn’t enhance films. Terminator 2 and The Matrix succeeded in 2D – they had amazing special effects but also an immersive storyline. Ultimately, it is the storyline that is immersive and not the visuals. 3D done badly can be distracting; I think it only works in gimmicky films such as My Bloody Valentine 3D or Tinto Brass films.

The marketing around the film

Orange Spots

The Orange Gold spots featuring Mr Dresden, Eliot and the Film Council have ended. Despite some people not liking them, I on the whole enjoyed them even though the more recent ones (Sigourney Weaver and Danny Glover) were pretty poor.

They have been replaced by spoof trailers – the first of which being the A Team. I have reservations about using proper forthcoming films for these spots

  • There may be issues regarding favouritism to certain studios
  • It can saturate the impact when the proper A Team trailers are released
  • Continued exposure could actually have a negative effect in putting people off the film once it comes out, since they might get sick of the characters

The trailers

I generally like seeing film trailers, though there are a couple of problems I’ve noticed

  • It’s quite annoying when a cinema shows the trailer, but not the actual film. Surely they can plan for this? For instance, the Cineworld I regularly attend had heavily trailed Case 39 but on its week of release opted to show the similarly poor-performing Legion instead. Additionally, why on earth would they show Mesrine Part 1 but not Part 2? Defies logic.
  • Films get delayed. This can mean that you either see a trailer that piques your interest but then hear nothing about it for the next 9 months (as is the case of Salt), or the trailer ends up getting repeated constantly over a period of several months (as is the case of Cop Out)

The marketing within the films

Product placement

The James Bond franchise often gets labelled as the biggest perpetrator of product placement. However, Iron Man (and its sequel) seems to have taken it to a new level

  • Audi got a spot on the film poster (NB: This isn’t the poster I saw, but acts as an example)
  • Burger King was central to a minor plot point in the first film
  • The sequel has 11 marketing partners, with the media buys valued at $100m

Despite the overt marketing, the gestural interface of his technology (something Faris Yakob has talked about recently) was pretty cool.

Depictions of marketers

The Joneses is a high concept dramedy about four stealth marketers that pose as a family in order to sell goods. Predictably, elements of the story are pretty ludicrous (how do they measure sales uplift? Do people not shop over the internet?) and the ending is predictable, but one of the central premises of the film is that marketing is ultimately dangerous

  • It promotes short-term spending over long-term stability
  • People think they need to buy into a lifestyle
  • Luxury goods are only important in the signals they convey; the product itself is almost incidental
  • Marketers inherently lie – not only to prospective customers but also to themselves.

Evidently, the film concentrates on exaggerating the negative aspects of marketing, but it is another example of the negative perceptions the marketing industry promote within wider society

The films

Franchising

Studios appear to have gotten so risk averse that only auteurs (or, at minimum, “name directors”) are able to attract big budgets for original ideas. Otherwise, it seems big budget films have to be based on an existing property. Recent or forthcoming examples include comics (Scott Pilgrim), books (Twilight), toys (Transformers), computer games (Prince of Persia), legend (Robin Hood) or sequels to previously original ideas (Wall Street 2)

Remakes

In addition to the above, there has been a proliferation of remakes. Michael Bay, a perpetrator of numerous crimes against cinema, has been remaking several classic horror films – the most recent of which is A Nightmare on Elm Street.

Of course, these remakes completely miss the point. The original films succeeded because they were well made, and entered the cultural consciousness far beyond their initial release. In the case of Nightmare, the core concept is compromised all memorable surrealism is removed; all that is left is an overbearing score, fast cuts designed to manufacture cheap shocks, and some gore. Unlike the original, it will be quickly forgotten.

The need for a cinema release

Even the most artistically bereft films, seemingly guaranteed to lose money, get a full cinema release. Losses are exacerbated due to the need for a heavy marketing campaign.

Is this an investment for long-term success? While films are perhaps not as critic proof as they used to be, a cinema release still provides name recognition and a sense of legitimacy that straight to DVD titles don’t get. So, even if a film released in cinema gets terrible reviews, it might still be assumed to be better than a straight to DVD title and thus stands a better chance to make money through rental, purchase and syndication. And I don’t see how moves to downloads would change this.

sk

Image credit: http://www.flickr.com/photos/biblarte/2687947869/

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“All you can eat” offers

I’ve been thinking about subscription models recently – specifically unlimited usage models.

It isn’t right for all business or all sectors, but generally they seem a good thing. Service industries, for instance, would struggle to cope with an increased demand without a commensurate increase in revenue. And premium good sellers would be reticent to participate in a model where price is to an extent commoditised.

Subscription models can be effective where:

  • The product is disposable (in the sense that it is impermanent) yet potential customers are price sensitive. Each purchase is a transaction, and this transaction requires careful consideration. People will only buy when they can guarantee they will get their money’s worth – they will generally be unwilling to risk a substandard product
  • A product suffers from a great deal of indirect competition. The customer doesn’t face a zero-sum choice in product A or product B, but has a range of alternative sectors to choose from. Growing the market is arguably more important than growing share.
  • A new product category is introduced and people aren’t aware of or don’t understand the benefits that they can receive from changing their behaviour
  • Complementary products are able to benefit from an increase in use of a separate product

Subscription services can transform industries:

  • Film rentals: No longer do people have to decide whether each title will be value for money. With an unlimited subscription from the likes of Netflix or LoveFilm, they can afford to experiment. Not only does this benefit the company, but the industry as a whole grows
  • Mobile phone packages: The mobile internet only took off when unlimited data charges were introduced. This post from Vic Gundotra of Google has some nice stats showing growth resulting from these new packages
  • The food industry originated “all you can eat” offers, but this is too short-term to create real value. People still eat a meal; they are just encouraged to eat more food. Rather it is the more long-term offers that create more value e.g. free refills encouraging people to stay in a coffee shop longer, where they then buy more snacks. I wonder if there are any examples of monthly subscriptions for restaurants? This could work well e.g. pay a monthly fee and then eat there as often as you wish.
  • While not quite “subscription”, loyalty/reward cards can help retain long term business. Chris Stephenson has a great example from Starbucks.

I have actually been persuaded to participate in two subscription services recently:

  • At Cineworld I pay £12 a month for unlimited screenings. This has changed my behaviour for the benefit of both Cineworld and the film industry. Last year I went to the cinema twice. In the past month I have been 5 times. I have purchased overpriced snacks there, but most importantly I am not cannibalising revenue. I am a new customer and I haven’t yet been to a sold-out showing – so the marginal cost of me sitting in an empty seat to watch a screening is effectively zero. A win for cinema and a loss for the other entertainment industries where I am now spending less time
  • I have paid $80 for a season’s access to MLB.TV where I can watch live, archived and “condensed” versions of every baseball game (as the regular season before play-offs is 162 games per team, that is a lot of content). I like baseball but I am not a diehard fan. However, Sky Player’s sports package (£35 a month for non-subscribers) seems overpriced for the marginal cost of adding a newuser who unable to have a dish installed in his flat. It is their prerogative to keep premium pricing, but they risk losing out to specialised services such as MLB.TV and Footyonline.TV, (£23 for a season; HT Graeme Harrison). Infrastructure and rights issues notwithstanding, could Sky not offer single sport or genre packages online, and look to upsell with additional services? That would have persuaded me to buy.

Subscriptions make me question the long-term viability of some services. iTunes has been phenomenally successful in its transactional model, but if someone gets a subscription model correct (or if Spotify can make an ad-funded model work), will that spell the end? Purely transactional models seriously inhibit overall consumption – for instance this is the primary reason why the French VOD offering is so far behind that of comparable countries (they have little free catch-up; it is predominantly pay per view). Is iTunes capping legal consumption of digital music and video?

Finally, is there scope for unlimited subscription models in research? For the large part, no. Industry currencies and syndicated surveys cater to a niche, but research is rarely objective data and the greatest value is derived from the service i.e. interpretation of results, not the results themselves. Companies such as Mintel and Forrester may be able to build a small amount of face time in their fees, and then upsell further consultancy or ad-hoc research, but for the most part I view this as a potential limitation to the core offering.

However, where there is indirect competition, a struggle to communicate benefits or opportunities to upsell complementary products, subscriptions appear to be an enticing prospect.

sk

Image credit: http://www.flickr.com/photos/lexnger/

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