Commentary

Big Blockbusters, Low Prices: What Does It Mean For The Movie Business?

Fueled by big summer blockbusters, the U.S. movie industry has posted the fastest take of $6 billion in U.S. box-office receipts ever through last weekend, according to comScore and National Association of Theater Owners. It reached $5.7 billion at this time a year ago.

Sounds like healthy business. But maybe you need to wear a snappy cape or a spandex/lyrca brightly colored suit to really feel it.

At the same time, new subscription movie businesses have launched a counterattack. MoviePass has altered its plan to include so-called “surge” pricing for those high in-demand movies, typically blockbusters.

Initially, it would mean a $2 surcharge for those movies. For $9.95 a month, MoviePass moviegoers are able to see one movie per day.

Recently, AMC Theaters -- which has been troubled by MoviePass’ business plan -- decided to start its own monthly theater subscription, at $19.95 a month -- allowing subscribers to see three movies a week. But for no charge, subscribers could also see bigger-screen IMAX movies at AMC or Dolby Cinema films at AMC.

All this would seem to spell positive long-term progress for in-theater moviegoing. Well, maybe.

MoviePass, in trying to compete with Netflix, reduced the price of its service to around the same level as the home TV-based subscription service at the end of last summer. It got sharply higher subscribers as a result.

But alluding to AMC Theaters worries about the low price point, MoviePass now has some financial difficulties. Thus, analysts reasoned the addition of a surcharge for big, in-demand blockbuster movies.

Then there is this: Movie attendance is what matters to many, a weak spot for the business over the past few years. Also throw in higher individual ticket prices.

So where is the new opportunity for the business -- movie studios, theater chains and independent movie ticket operators?  

Like it or not, the in-theater movie business isn’t like the TV business. Nor is the TV business like the radio business or radio like the digital music subscription business. While there is some overlap in many entertainment areas, there are also idiosyncratic factors at play.

Who can succeed at everything? Only a few entertainment executives with super-human business powers.

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