by Nicholas Anglewicz and Jurgen Brauer, January 2006
Copyright: J. Brauer. No reproduction without permission.

Going to the cinema is no fun anymore.

Going to the cinema is no fun anymore. Gone are the days of uniformed, flashlight-armed ushers directing a expectant, hushed, and generally polite audience to their seats, to be enveloped in a fantasy world of sound and sight that served as a near-perfect escape from the real world. In contrast, today the audience is rudely emailing, texting, or loudly chatting on the cell phone with the babysitter, friend, or business partner halfway across the world. People come late, or they leave early. People argue, or make out. The floor is sticky with last show's dredges of popcorn, gum, and spilled soda. Previews are interminable, as are the pre-film advertisements. The distractions of the outside are dragged into the movie house which offers fantasy escapes no more. Going to the movie has become an unpleasant experience.

When things become unpleasant, people substitute to more pleasant alternatives. As digital-based home entertainment options have multiplied and the latest movies are made available on DVD almost as soon as they hit the theaters, there is little reason anymore to go to the pricey and unappealing cinema. Little wonder that, adjusted for a growing population size, movie attendance has been declining.

Recognizing that going to the cinema has become unpleasant or inconvenient or too pricey, studios are beginning to undermine the cinema-based revenue stream by releasing movies in non-cinema viewing platforms (called "exhibition windows"). This cannibalizes one revenue-stream to make good on another, neither helping the cinemas nor the studios.

As a pure business matter, the declining attendance has a double effect on studio profitability. Studios lose money from poor box office performance which then adversely affects the performance of the subsequent exhibition windows as studios rely heavily on the viewing experience in the cinema to boost follow-on sales to DVD, cable, pay, and network-TV, mobile-device screening, and overseas outlets.

This unpromising situation can be reversed in one of two ways. Studios can digitally differentiate its movies with the highest quality offered for the cinema big-screen release and progressively lower qualities offered for TV and consumer-controlled devices, or studios can assemble their own movie house chains and rebuild the viewing experience as a first-rate, quality-time event that consumer once again will want to pay for. And, once rebuilt, movie release can be properly sequenced again the way it used to be: first to the first-release cinemas, then to second-release cinemas, then to consumer-controlled platforms such as DVD and mobile devices, and then to TV-based viewing. The earlier the viewing, the higher the price charged.

What would a studio-controlled cinema chain offer to the modern consumer? In short, something that makes going to the movie-house a fun experience again.

What would a studio-controlled cinema chain offer? Except for emergency messages, it might digitally jam cell phones; it might adopt explicit audience behavior guidelines and enforce these with a new generation of ushers; it might forego all on-screen previews and non-movie advertising; it might create fine-dining opportunities inside the movie-house; it might offer movie-based tied-shopping from prior-release DVDs, film history, film books, and classic movie posters to kids' products and movie-based apparel and fashion items. The décor of studio-controlled cinemas would embrace the latest releases with movie-specific decorations and outfits that harness customers' imagination. The cinema atmosphere would compliment audiences' viewing experience.

Some of this is already happening on an experimental basis, for example at Los Angeles' ArcLight Cinemas (dining and no-ads). The point is to make movie-going the social, fun, and relaxing experience again that it once was. People will pay for a pleasant break. In fact, that is what the entertainment, leisure, and recreation industry is all about. Hollywood can regain many a lost customer by regaining tight control over just how the movie-buff experiences the event.

The major Hollywood studios once ran their own cinema chains. Unfortunately, they conspired to form a cartel that monopolized the production-distribution-exhibition chain from studio to customer and, following a landmark decision (the Paramount case), the Supreme Court in 1948 ordered the studios to divest from much of the exhibition, or cinema, side of the business. But importantly - and this is a point today's Hollywood has forgotten - the Supreme Court decision did not forbid studios to own cinemas, only that the studios may not engage in unlawful anti-competitive practices such as price-fixing or block booking. The new exhibition windows available today make that kind of monopoly impossible.

Studio-owned cinemas would rejuvenate a dying arm of the film industry. For too long cinema companies have failed to create a business model that would lead consumers back to the box office. Hollywood's future is tied to that of the cinema. With the fading future of the cinema apparent, it is time for Hollywood to engage its own future and battle its way back into the cinema.