My passion for films dates way beyond my devotion for technology or programming. Going to the movies back in the 80s, growing up watching E.T. fly over the moon or Darth Vader stating “I…am your father”, has always been part of my life. That love and passion were shared with my own children. In fact, we often took every opportunity to grab a movie at the theatre.
Because of my tech background, I’m also someone who looks into the future and cut cable a long time ago, exclusively watching our home entertainment with streaming services. However, this has never deterred us from going to the theatres. The experience of grabbing a bag of popcorn, sitting in front of the big screen with a large group can’t be matched. Seeing Captain America holding Mjonir in Endgame in a full theatre will be a moment, I’ll always remember…
But, with the current pandemic, this entire experience is at stake. The industry faces an environment where people can’t or won’t go in significant numbers to the multiplexes anytime soon. On top, with the constant postponement of major blockbusters, and quite understandably so (I’d do the same as a studio head), theatre chains face potentially irreversible financial situations where closures of hundreds of screens might be the only solution. A government bailout might save them from chapter 11 or delay the inevitable. But the core issue will remain…will people come back to the theatres in large numbers and when?
Being such a passionate moviegoer and a technologist, I thought, there has to be a solution out there to resolve it. So for several days I’ve brainstormed a lot of ideas. I tried to come up with an answer that would adapt to the current situation and yet set the path for the future when things return to normal. And, be flexible in case any similar pandemic or economic downturn returns.
The rest of this article is about the solution I came up with. I hope in writing this it will find its way into the hands of the studios and theatre chain owners. So we can all look behind this pandemic one day and enjoy the sanctity of the movie theatre experience.
The Big Picture
So let’s first summarize the issues the movie industry faces at the moment.
- The pandemic is preventing people from going to the multiplexes and isn’t slowing in most parts of the world. Multiple vaccines are on the way, yet, returning to normal will take a while.
- Even when COVID is somewhat under control, it’s very unlikely theater chains will see the same traffic as before for several years.
- Theatre chains have operational expenses they can’t sustain for years without an ongoing audience, especially with the absence of huge opening weekends.
- A big part of the theater revenues comes mostly from concession items; the popcorn and drinks you buy when you go physically at the theater.
- Studios won’t risk blockbusters in the current environment, and usually are trying to find alternatives to do both digital and theater releases.
- For blockbusters, releasing only in theatres or digital now is probably not recouping their investments or barely.
- Blockbusters are the main reason audiences go to the theatres. Mostly when they’re smaller movies, people tend to wait for the VOD release. And the past few years, before COVID, have proven this statement to be true.
So how do we resolve these problems? This solution requires a few elements:
- Needs to be low cost, or minimal expenses to solve it, especially if it is unproven as theatres/studios are struggling for revenues.
- Needs to consider where and how each party makes their revenues (studios mostly the box receipts, theatres mostly the concession items).
- Needs to be flexible to the pandemic or lack thereof.
- Needs to re-energize the industry and stop blockbuster delays.
So in summary, here is what I propose. I’ll go into details right after.
- Offer a flexible ticket (Golden Ticket) that allows you to watch a movie physically in theater or in VOD. This ticket is purchased from the theatre ticketing system and the system can add deliverable concession items (if home experience was selected). It can adapt to either a per person charge or a set price for home viewing.
- Through distribution partnerships with the studios, blockbusters are released on their planned date. Each film can have their own launch in between theater and digital, decided on a case-by-case basis and informed by point number 3 below.
- Through NATO or a centralized body, data is gathered on releases and box office success and artificial intelligence can be applied to make better informed decisions on pricing, release dates and type of tickets used (theater or digital). This Intel can be easily leveraged to determine if a movie should be launched on the same day in both media or can delay VOD by 2-3 weeks/months.
Let’s deep dive into the solution. As the scene in Last Action Hero with Schwarzenegger, where the usher gives a golden ticket to the young hero in the movie. In the film this ticket has magical power, it can transport fictional characters and real people between their respective worlds…that’s the first piece of our puzzle.
1- The Golden Ticket
The first thing we need to resolve is to get people purchasing directly from the theatre chains. This is the purpose of the golden ticket. A ticket that can adapt to whatever the choice of the buyer is. They acquire the ticket online and the initial order goes as a home view at a premium price. The ticketing system upsells delivering concession items home for a special on-the-spot rebate, and the transaction concludes. Concession items are shipped home and the user can enjoy the movie at his leisure (only once—like a rental).
IF the user selects to watch the movie in theatres, he brings the digital golden ticket along with his family members. Then, the usher scans the ticket (for example a family of 4) and the ticket automatically adds the charge to equal to a 4-ticket value.
Using an analogy of a golden ticket can help bring some of that missing magic into our lives and enhance the movie experience for users. Offering a flexible ticket allows those who can’t watch a movie in theatres, to watch it at their leisure. And for those who can (and prefer) enjoying the theatre experience to do so. Also having the theatre chain sell the tickets brings back a sense of reporting lost into the streaming process.
2- Bring Back The Magic
Without magic there can’t be any miracles. Without fresh and new movies in theaters, there can’t be any revenues. Without blockbusters in multiplexes, people will still hold on to their streaming options. Big or small movies need to be back on the schedule. But, the old method of 90 days after the theatre release for VOD isn’t working in this current climate. And no one can tell if it’ll ever succeed again. Studios and theaters should be flexible and adaptable to today’s environment or tomorrow changing terrain. That means there isn’t a single approach that’ll work for all films distributed. Both parties need to adapt to both the macroeconomic conditions (pandemic, economy) and the minutiae of their distribution model (same day release, delayed VOD, VOD first, etc.). A new approach to launching movies needs to be taken, one informed by data.
Without magic there can’t be any miracles. Without fresh and new movies in theaters, there can’t be any revenues.
Technology has pushed several boundaries and infiltrated our lives. When you talk to SIRI or Google, when you start typing a few words into Google you’re experiencing algorithms and AI at its best. This is what we need to apply to the movie industry data. Can you answer without the shroud of doubt which films should open in how many theatres (or VOD instead), and know you’ll make a profit? Be certain which weekend is best for which movie? How does the pandemic affect this (or any other future worldwide event)? Of course experience in the industry gives you some answers, but as William Goldman said, “nobody knows anything”…especially in our current environment. This is where data modeling and machine learning can help.
As a crash course in machine learning, basically this technology allows you to feed all the data you have, measure success or lack thereof, and improve suggestions as it learns. To put this into perspective, let’s say you want to know the appropriate delay for a VOD release; after some time and using different release approaches for big blockbusters, the system would start putting some recommendations. The more data is modeled into this system, the stronger the recommendations. You can apply this AI to your statistics, answering questions such as what is the best time to open the concession stands? Which movies could be a great counter release (against say an Avenger movie)? How does the current economy impact the ticket sold (theatre or VOD)? Etc. The idea here is to be flexible and adaptable to the environment with informed data.
The industry needs to be re-energized, and the best way to do it is to bring the magic back. By being flexible with a golden ticket and smart about how you do it all.
Although I won’t claim to understand all the minutiae of the industry. It is at the very least clear that most of the pieces are already in place. To make this a reality is a question of connecting the dots. While major studios all have a streaming service or one on the way. Theatres have the ticketing systems and distribution deals for concession items and the data is available across several all these companies. Again, connecting the dots. I inserted a quick image representing the high-level parts necessary and players now involved.
To execute this, every studio/theatre chain needs to ask these questions and either have answers or plans to execute them:
- Can we implement a flexible ticket, where an initial purchase changes into a different one?
- How would this ticket impact my seats per theatre?
- Is there a possibility of direct shipping from concession partners to our audience?
- Can we set distinct distribution releases and models for each movie?
- Who is our VOD partner and how ready are they for digital delivery?
- Where is the data we can use for modeling our decisions? Can this data be shared across a centralized body?
I’m certain these main questions will surface dozens more, depending on which player in the industry is asking them. But raising these will bring you one more step closer to defeating this dire situation and implement A solution, whether or not it is the one proposed in this document.
In conclusion, my hope is that we continue to thrive together as a society where movies can be watched at the local theatre or at home, where this magical experience is only a golden ticket purchase away!