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Is It Any Wonder That Movie Piracy Sites Are Thriving?

June 04, 2012 | Comments: 0 | Views: 168

It was a rainy day today, so my wife and I decided that we should go and see a movie. We called up Grandma and asked if she would be willing to look after the kids for a few hours, and she was happy to spend some extra time with the little ones. So, after finally agreeing to go and see the new Men In Black 3 movie, we got into the car and headed to our local Cineplex theatre. When we arrived, we walked up to the ticket machine, requested 2 general admission tickets and then proceeded to pay. For the two tickets at this particular Cineplex, the grand total was $21.00, which seemed pretty reasonable. Next, we proceeded over to the concession stands to consider our options for a snack. We didn't want to get too elaborate, so we settled on a large popcorn, 2 regular sized drinks and a small bag of candy. Fortunately, my wife has a 'SCENE' card (a promotional card that rewards purchases with points and lowers the cost of some goods when presented at time of purchase). However, even with the card, the snacks cost us another $21.00!! Now, we're not talking about pizza and fries, or hot dogs and energy drinks here....we're talking about one of the cheapest snacks known to mankind....due to the sheer abundance of raw materials available on this continent, popcorn costs mere pennies to produce, but apparently commands a GIANT price tag to consume when purchased at a movie theatre! As well, those large cups of soda are quite expensive as well (after they fill your cup with Ice, there might be the equivalent of one standard can of soda in that cup). The way I figure it, we probably got the equivalent of 1/4 a cup of popped corn kernels, 2 cans of pop and a bag of candy that could be purchased at a local grocery store for about $2. Based on some quick research that I have done, a pound of popcorn kernels is equal to about 4 cups of kernels, and a 1/4 cup of kernels will yield approximately 8 cups of popped popcorn. So 4 cups of kernels will yield about 128 cups of popped popcorn! Oh and wait!, it's important to note that a pound of popcorn kernels costs about $2.00, so as you can see, you can produce approximately 128 cups of popcorn for about $2.00! Keeping these figures in mind, it cost the movie theatre approximately 13 cents for our large bag of popcorn, another couple of bucks for our soft drinks (calculated at a retail cost of $1 per can of soda), and about $2 or $3 for the bag of candy...for a grand total of about $5! In turn, they charged us $21.00 for those snacks!! That represents a mark-up of over 400%! As a result of this, it cost my wife and I just over $40.00 to see a movie today...and that was at a Cineplex where the price of the general admission tickets are much lower than those found at the same theatres in larger cities, where it's not uncommon to find admission prices ranging from $12 to $18 per person!

With pricing like this, it is little wonder why piracy has become such a large issue in today's society. After all, imagine if instead of Men In Black 3, my wife and I had decided to take our kids to the movies with us and take in a children's movie. Even with the cheaper kids ticket and concession costs factored in, the costs associated with such an endeavor would balloon to somewhere between $70 - $90! In the current economy, families are looking for affordable entertainment, and I do not believe that our local movie theatres are doing a very good job of providing that. Instead, families are more likely to download a newly released movie, pop up some popcorn on the stove and crack open some beverages found in the fridge... then curl up on the sofas and lazy boy chairs and have a family movie night. The costs associated with the stay at home movie night are likely under $10 bucks, and you don't have to worry about the obnoxious teenagers 3 rows behind tossing popcorn at you, while texting and speaking on their cellphones!

In the past 5 years alone I have witnessed the costs at the concession stands rise nearly 40%! I understand that some food industries have had to suffer through shortages due to issues related to weather and environment, but corn has remained very affordable throughout those 5 years. The costs associated with soda and candy has gone up slightly, but certainly not enough to justify a 40% hike at the movie concessions. So, is this just a matter of corporate and shareholder greed? Is the never ending appetite for ever increasing profits starting to get to a point that average families now face exorbitant costs just to take their loved ones to a show? Is it any surprise that movie theatres have to plaster large signs at the doors declaring "No Outside Food or Drink Beyond This Point"? Obviously they are trying to protect their very large profit margins and thus their investors returns.....not to mention the fat salaries and bonuses awarded to their top executives! In 2010, the CEO of Cineplex received over $4.5 Million in total compensation - most of which was received in additional incentives beyond his base salary based on performance and profit targets! His base salary was just $803 Thousand dollars.....but he earned over 5 times this amount once all of the additional bonuses and incentives were paid....and you can bet your bottom dollar that those rising ticket prices and exorbitant concession prices factored largely into his compensation package....but hey, who can live on a paltry base salary of $803,000/year anyways right?

Here is an idea for Cineplex that would result in continued growth of profits and thus, investor delight. Why don't you drop your prices 40%, encouraging more families and individuals to visit your theatres and grow your business through expanded ticket and concession sales! As a result, you could positively affect the employment figures and employ more people to serve the influx of customers who can now afford to come to the movies, and more people could enjoy the magic of watching movies on the big screen, rather than downloading those movies to hard drives at home that are hooked up to their large screen televisions. I think you will find that people are more willing to pay a fair price for the entertainment you are providing, than stay at home and watch their free downloads because they cannot afford to pay your unfair and outlandishly exorbitant fees. Furthermore, the movie industry going after the websites that provide free downloads of your movies will never yield any great blows to the infinite community of piracy sites that exist out there in the wild of the world wide web....but charging people affordable prices to visit your theatres will slowly start to win back customers who are tired of being overcharged to watch movies that rarely live up to their trailers! While the cost of your tickets and concessions have been steadily going up, the cost of large screen televisions and the technology used for downloading content has been steadily going down. If that trend continues, theatre companies like Cineplex will continue to see their viewership decline (Between the years 2000 - 2010, cinema attendance has dropped by over 22%, while during the same period, ticket prices have increased over 15%!), and large electronic retailers like Best Buy, Future Shop and Amazon will continue to benefit from the increased demand for new big screen TV's! The bigger concern for companies like Cineplex should be...how long can they continue raising prices to offset the decline in ticket sales before they begin seeing massive drops in cinema attendance! Only time will tell, but if I were the CEO of Cineplex, I would be very concerned with the long term prospects of my job. Of course, the question remains whether the current CEO has enough foresight and courage to challenge the traditional business model that has over the past 10 years continued to show steady declines in attendance! Personally, I hope the industry turns itself around, and many more generations of people can continue to experience the magic of the big screen at an affordable price.

Johnny is a stickler for great customer service. He constantly seeks out examples of good and bad customer service and shares those experiences on his blog @ http://www.johnnyletter.com. If you have a customer service story that you would like to share, email johnny@johnnyletter.com and tell him your story!

Source: EzineArticles
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