Sunday, July 26, 2009

Of loss-leaders leading to losing

One of the reasons I prefer to watch most movies on DVD is also one of the reasons I don't watch TV anymore: Commercials. But my husband and I are Harry Potter fans, so we dodged the crush of its pubescent fanbase by waiting until today to take in the series' sixth installment.

Now, I understand that TV can only be freely available because it's commercially sponsored. But the fact that my eyeballs being pimped to advertisers when I've paid for the content brasses me the heck off. As it should brass off any consumer. Sure, you can time your arrival and choose to skip the advertisements, at the cost of losing your shot at the best seats.

That and the perennially overpriced refreshments can't help but make me wonder if the movie itself isn't in fact what's called a loss-leader--i.e. a product/service deliberately priced at or below cost so as to generate traffic, and make up the difference on add-on sales.

Kindly humor me and assume I'm correct in that surmise, because I think there's a larger point to be made.

Okay, I understand that cinemas are facing stiff competition from DVDs and content on the internet. But, to my thinking at least, the proper response is to focus on emphasizing the added value--i.e. the social dimension of going to the movies--rather than setting up an environment where the patron darned near hears "CHA-CHING!!!" every time s/he walks through the door. If I want to feel like a wallet with legs, I'll go to a casino, thank you very little.

How about installing seats with arms that flip up for couples out on date night? How about club cards that give loyal customers first dibs on screenings of highly anticipated movies after so many swipes? How about pitching highly discounted Friday afternoon viewings to local businesses as performance incentive/reward programs? How about having the DVD of the original movie available for sale the sequel/prequel is being shown? How about "theme" showings (by no means an original idea on my part)?

The other route, of course, is to go a bit higher-end, which means not just showing any-old-garbage that the Hollywood factory cranks out. Granted, I'm a snob, but killing time by looking at the posters/displays for upcoming movies almost set off a facial tic at a couple of points. Oh, yeah, I'm gonna believe that some anorexic-looking chick can fire a fully automatic weapon in each hand and not be on her backside a second later when Newton's third law kicks in...riiiiiiight...

The reason I'm dispensing (completely unsolicited) advice to an industry about which I know next to nothing, is that once in a great while I do actually want to see a first-run movie on the big screen, and I'd rather prefer to preserve that option. So I'll be presumptuous enough to assume that the rest of America is like me in that they go to movies for one (or more) of four basic reasons:

  1. Because other people are going, too (either as a group of friends or as part of a date)
  2. Because the movie might actually be worth the time spent watching it
  3. For the general ambiance (for historical/community-based theaters)
  4. To kill time

$5 buckets of popcorn and blaring ads play into none of those motivations. Neither, in general, does being open at one in the afternoon on a Tuesday in the middle of winter.

I'm probably talking out of my ear here. But that doesn't contradict the fact that flat screen TVs are growing bigger all the time even as their cost shrinks. And for the price of two or three tickets, you can pick up the DVD. Not to mention that being mistress/master of the remote means that you can always rewind if some fool's cellphone (or mouth) goes off at the wrong time. Oh, and the popcorn from the kitchen is much cheaper even with real butter on it.

Even if this post is merely another manifestation of a typical American consumerist entitlement mentality, the central point stands: If you don't truly understand what it is you're selling, your business model is doomed.