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Movie Theaters Should Think Like Netflix

Movie theaters need to increase attendance. Here is how they can do it.

Over the last two years Netflix has become available on every Internet enabled screen sold in the United States. Desktops, laptops, tablets, TVs, and phones can now be used to view the Netflix streaming service. And if you can't find the movie you want on their streaming service you can always have the DVD sent to you via the US Postal Service and watch it on your old fashioned non-internet-enabled DVD player.

The consumer price for the service that supplies all these screens is $7.99/month for streaming only and  $9.99/ month if you want to order DVDs. At the end of 2010, Netflix reached 20 million subscribers, up from 12.3 million in 2009.  

The only screen that Netflix doesn’t reach is the screen at your local movie theater. Unlike Netflix’s subscriber count, movie theater attendance is not going up. Instead, it is going down. In 2010 US theater attendance was the lowest it has been in 14 years at 1.35 billion tickets sold, 5.4% below 2009. So, in the same year that the Netflix subscriber base increased by 65%, theater attendance declined by 5.4%.  

Movie theater admissions should be going up. For filmmakers and filmgoers, theaters are an essential part of the movie experience. In fact, movie theaters are the lifeblood of movies.

What if we could create a new model for going to the movies at your local theater that is as consumer-friendly as Netflix? Could this dramatically increase attendance?

Imagine this service

You go to a website or download an application to your device that gets you a list of every movie theater in the United States. From this list you get to pick two movie theaters.

For example, I would pick the AMC Loews Lincoln Square 13 and the Lincoln Plaza Cinemas, both on Broadway in Manhattan. One shows mainstream Hollywood fare and the other shows foreign and independent movies. Both are my local theaters.

The key point is this: each customer gets to create her own access point at any theater across the entire United States. Think of it as choosing your own screen much like Netflix allows you to do.  

Then I put in my credit card and agree to pay $10 per month ($120 per year) and receive a movie pass to these two theaters. This movie pass allows me to go to any movie at any time at each of these theaters.  

Yes. I did say "any movie at any time." I have to show up like everyone else and get a ticket, but I don’t have to pay because the movie pass I purchased allows me access.

When I check in to receive the ticket, they log me in and record which movie I am seeing. This allows them to allocate some percentage of my subscription to the distributor of that movie.   

If I don’t go to any movies in a given month, the money from my subscription gets split between the two theaters and allocated between all the movies they have shown that month.  In other words, the movie theater and the distributor make money even if I don’t show up.

Now the movie theater has a real relationship with me, the moviegoer. It has my email address, my zip code, my credit card and whatever else I put into my profile. It also knows each movie I attend. This service will allow me to rate the movies I see, so the theater can recommend other movies I might like to see that are appearing on its screens. Sound familiar?

A movie theater subscription service can go even further than Netflix because each theater is located in a very specific neighborhood. Restaurants and shops of every type surround each theater. Theaters also continuously gather people in one place with a common interest.  

This service can add a social media layer that appeals to people’s constant desire to connect with each other and connect with services in the neighborhood. Groupon, Twitter, Facebook, Gowalla and Foursquare are all a natural fit.

What does the movie business get out of a service like this?

Let’s do the numbers.

If a million people subscribe per year, $120 million annually flows back through theaters into the movie industry, at 10 million subs, $1.2 billion and at 20 million subs, $2.4 billion. In other words, if done well, it can scale and a lot of money will be generated. And as you remember, Netflix hit 20 million subscriptions just last year.

But is there a company out there that has the expertise to pull this off?  A company that has dealt with all the movie distributors, has expertise in database management, credit card collection, knows something about recommendation engines, deals with vast numbers of movie lovers on a daily basis and knows exactly where they all live.

Let’s think for a moment. Netflix maybe?


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