I thought this thread might be a good place to write a serious post about something Bill Hunt wrote at The Digital Bits. I think a lot of people have many misconceptions about how movie theaters are operated and where they earn their money.
I apologize for the length of this post, but I think these issues are pretty important.
Quote:
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Originally Posted by Bill Hunt, The Digital Bits
What they OUGHT to be cracking down on are excessive concession prices, forcing guests to sit though TV commercials passed off as "entertainment" before the movie starts, lousy projection quality, and people talking, cell phones ringing and infants crying during the movie. If they made the movie-going experience fun and affordable again, they might actually get people back.
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Unfortunately, commercial movie theaters are stuck in a
damned if we do, damned if we don't predicament. Hollywood studios and the short-sighted corporations who own them deserve a great deal of blame for this problem. Let's take it point by point.
1.
Excessive Concession Prices.
It costs a lot of money to operate a movie theater. Commercial movie theaters earn very little from the movie ticket.
Movie theaters did much better in past decades when a movie could play in theaters for several months. The theater would be rewarded for holding a movie for a longer term with increasing percentages of the box office take week after week. That business model is all but gone now. Movie studios now want their movies onto home video ASAP to minimize interest payments on all the borrowed money it took to make the movies. They front load the release onto as many as 8000 screens so the movie can play itself out in as little as a month. The result is movie theaters don't get any good percentages of the box office revenue.
The $4 soda and $7 popcorn is paying the light bill, payroll and much of everything else in the movie theater. It's like this everywhere. No theater in this nation could operate off of what it takes in box office revenue. None.
The only way concession prices could be reduced is if Hollywood studios would give theaters a better cut of box office revenue. But that isn't happening. Worse yet, Hollywood studios are constantly trying to weasel their way into taking a piece of the concessions revenue too. And that's regardless of the fact theaters are operating with very slim profit margins. Many have fallen in and out of bankruptcy. Some of this is the fault of exhibitors for over-building too many "megaplex" sites and buying up too many smaller theater chains. Much of it has to do with not enough operating revenue.
2.
TV Commercials & Excessive Trailers
I hate TV commercials in movie theaters, but understand why they have to resort to this nonsense. They have to find additional sources of revenue. Advertising is part of that. If the movie studios gave the movie theaters a better cut of box office revenue we wouldn't see so many TV commercials.
3.
Poor Projection & Sound Quality
Some of this issue is the fault of movie theaters. However, it costs more money to hire and keep well-trained projectionists and technicians. The vast majority of theaters are stuck having a manager or minimum wage popcorn jockey do the work. Most of the largest theater chains are also run with the same corporate style that has infected Hollywood studios. So reducing staff down to the bare skeletal minimum in order to eek out just a little more profit (but drastically reduce customer service and presentation quality) is a big part of that.
Many thousands of theater screens are being converted to digital projection. D-cinema isn't better than
film done right. It is a compromise. Since theaters can't afford to hire well trained film projectionists the system has to be idiot-proofed instead. Unfortunately, this doesn't address the larger problem of bad sound quality in many movie theaters. The sound system needs a lot more frequent attention than the projection system. But it costs more money to re-tune the sound system on a frequent basis, replace blown speaker drivers, etc.
Hollywood studios aren't helping in this regard either. They hire "checkers" to make sure the proper movie trailers are being played in front of the show, but that's it. As far as projection and sound quality of their product is concerned, they really don't care. And let's be real about digital cinema:
Hollywood is only helping fund the conversion because it will save them a big fortune in film print manufacturing and shipping costs.
In the past, visiting a movie palace was like visiting a fine restaurant. Today, you have the fine restaurant price, but a fast food quality experience in most theaters.
4.
Disturbances from Audience Members
Movie theaters largely have their hands tied on this one. Very few theaters have a zero tolerance policy on issues like cellular phone use. The vast majority of theaters don't have the staffing manpower to keep disruptive audience members in line. Not many have security people on the site to deal with audience members looking to get violent if they're told not to play with their iPhones. Theater operators are scared of losing any customers, so why anger some of those customers and risk them not returning by telling them to put away their cell phone?
Honestly, this problem needs to be blamed on the general public itself. Too many people are just plain freaking stupid when it comes to having any sort of manners out in public. Too many parents think the noise of their screaming baby is like pleasant music and should be enjoyed by everyone. So let's take the irritated baby to the theater! Way too many people behave like ADD-afflicted idiots when it comes to cellphone use and the fashion revolving around it. Here's a news flash: Mobile phones haven't really been a status symbol since the early 1980s. I couldn't care less about someone's new iPhone.
Conclusion
I'm pretty worried about the future of the movie industry. I think commercial movie theaters are seriously endangered because of how they have been so badly marginalized by Hollywood movie distributors and their parent corporations. It won't take much for even the largest movie theater chains to fold. Without commercial movie theaters, the movie industry would shrink to a mere shadow of its former self. If every movie was sold direct to video, movie studios would be scared to put serious amounts of money into any big feature project. The commercial movie theaters are main the venue that separates real movies from the countless numbers of made for cable and TV movies.
I don't think the Hollywood studios understand this at all. So they're just going to keep pushing their luck further and further until their business model crashes. If I ran a movie studio, I would be much more involved with the theatrical aspect and looking after the health of that side of the industry.
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Personally I think in addition to what you and Denon said, that theaters also have to embrace some new models, like installing daycares. Those reading who are parents, if you could dump junior for the cost of a ticket in some kind of playland so you could go see an adult movie (NOT porn), would that bring you to the theater more often? 
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