News
'Avatar' looks to accelerate 3-D tix markup
By Robert Marich
May 10, 2009 – One of the “unsolved mysteries" of cinema economics is how much of a premium theater operators will add to tickets for 3-D showings.
At the moment, the surcharge seems to average around $2 nationally. DreamWorks Animation chief Jeffrey Katzenberg foresees a $5 mark up in the near future. The upcoming release Avatar may be accompanied by a new round of escalations.
In 2008, the national average was $7.18 for a ticket, according to the National Assn. of Theatre Owners ($10 tickets in big cities are offset by $6 in other areas).
Regal Entertainment – which is the largest U.S. circuit with 6,773 screens generating $2.5 billion in annual revenue – weighed in on the 3-D surcharge debate in a recent earnings conference call with Wall Street analysts.
Regal brass said that its 3-D screenings carried a $2-2.50 premium last year, but circuit-wide it’s now $3.50 to $4. That comparison is a bit skewed because Regal includes its IMAX big screens, which have higher ticket prices and markups than regular 3D screens that dominate the marketplace. Many other circuits don't have IMAX in their lineups.
“We think that in the near-term that premium can get to $4 to $5 and we’re clearly on the lower end of that range already,” Regal chairman Michael Campbell told stock analysts. “Avatar will be the first big budget live action film that will be released in 3D and we do agree that those premiums will continue to rise a bit.”
It’s an issue that will be settled by the marketplace because comments are simply guess work. However, theater operators risk injuring themselves if they get too aggressive in ratcheting up prices because that would undermine cinema’s advantage as a great value versus competing live events, such as pricey Broadway stage plays and live sports tickets.
Avatar is the sci-fi epic from Jim Cameron (Titanic) that 20th Century Fox is scheduled to release Dec. 18. Though not mentioned in the Regal call, other anticipated films with big 3-D releases include Disney/Pixar’s Up, A Christmas Carol from Robert Zemeckis (Polar Express) and Ice Age: Dawn of the Dinosaurs.
Campbell added that “we did not incur any push back in our markets” on Monsters vs. Aliens. “I think different companies chose to go with different premiums but I don’t think that that was held below the $4 to $5 because of consumer pushback,” he added.
For a 3-D movie, the studio picks up the cost of the special eyeglasses—now 81 cents and soon to fall to 50 cents, according to DreamWorks Animation—and the theater pays 50 cents per ticket to license 3-D system technology. RealD has a de facto monopoly.
3-D looks to re-invigorate the cinema-going experience as Marketing to Moviegoers: Second Edition says, “No other movie platform captures the collective experience of a group huddled in a darkened auditorium sharing the laughs, the tears and the wide-screen spectacle of cinema. Hollywood likes cinema release because it creates a marquee value of films that carries over to DVD and TV, and because consumer consumption is limited to one view per ticket.”
For full text, click link below:
www.marketingmovies.net/news/Dreamworks-probes-3d-cinema-impact-on-DVD/
This teaser poster says Avatar is a summer release, but the film was later postponed to Dec. 18