THB #313: Box Office Brady

Interesting weekend…

It was the 5th weekend of 2023. Like last year, we had 2 wide releases and 1 film just over the 1000 screen mark. Last year, the 3 titles grossed $33.7 million, this year, $33 million.

The weekend was won by Knock on the Cabin, which did a mediocre $14.2 million, not even splitting the difference between January genre openings Plane ($10.30m) and Missing ($9.2m) and M3gan’s $30.4 million.

The title with just over 1000 screens is BTS: Yet to Come in Cinemas, which delivered a 2023-strong $6.3 million this weekend.

The #2 film was 80 For Brady, which grossed an estimated $12.5 million, even though it seems to have sold more tickets that Knock.

And this is where is gets interesting to me. Because a significant part of the story of 80 For Brady is Paramount’s successful effort to get many - a significant majority for sure - exhibitors to run the movie at some significant discounting through most of the weekend… and onward.

Paramount, like many other studios, believes there is some benefit in variable pricing. And while this experiment is very specifically targeted at older women, it is a crack in Pandora’s Box, not a wide opening… but a beginning.

The question remains, is this a good thing or a bad thing? Or somewhere in between?

The idea has support in places you might expect it and in places you might not. One smart guy suggested that this incentive is like kindling to relight the fire underneath the segment of the audience - older people - who have been the most challenging to activate since COVID.

I am not as confident that this is true. I tend to think the film, which was well marketed by Paramount, is the activator and that potential audiences that are motivated by price are already focused on the larger bargain of, for instance, $5 Tuesdays.

The tricky part is… it is almost impossible to really know whether a ticket would have been sold without the discounting or not. Chicken… Egg.

For me, looking closely at this playing field for more than 25 years, week in and week out, my top issue is consistency. There are real pricing issues with every product, including movie tickets. But I believe, especially in the current marketplace in which most buyers of content are already confused about how to maximize their dollars to get the content they want, that too many options lead to consumer inaction.

This is a bit off the subject, but Marvel is McDonald’s, as much as it is anything. It is tasty (for those who like those flavors and proteins) and it is, above all, consistent. That Big Mac tastes the same in every restaurant across the country… eat in, drive-thru, get it delivered. When the fries are fresh, they are great… and when they are not so fresh, they are still pretty great salty, potato-y treats.

I like Marvel, don’t get me wrong. But I’m not just talking about Marvel. I am talking about all the IP obsession. “The same but different” has been the shortcut line about the film industry forever, it seems.

And McDonald’s, its fortunes rise and fall, year after year, decade after decade. The McRib keeps coming back… but it has never made the full-time menu for a reason. Breakfast All Day got shelved by COVID, but McDonald’s tested it and decided to go with it to great success. The McDLT… gone. Pizza… no. Chicken… now a staple.

Bottom line, you know what to expect. They add. They adjust. But consistency.

Movie theaters have added digital projection, better sound, stadium seating then lounger seating, IMAX, Dolby, chain-branded-premium seating, etc, etc, etc over the last 30 years. Teens were always obnoxious, but now they have phones that light up and irritate in new an special ways.

But at the same time, there has been a consistency. There is a very clear product on offer.

The movie business is interesting, as the primary product in theatrical comes from a very narrow swath of distributors. You can improve your soda game, but the movies are not in your control as an exhibitor. Each distributor is a little different, but with each company, there tends to be consistency. Exhibition is, by its nature, a series of different businesses, with different perspectives and quirks, sharing the aforementioned consistency of distribution, released on the same dates, moving onto the same windows on the same dates.

Studios are not allowed to collude. Exhibitors are not allowed to collude.

So this suggested-to-exhibitors experiment by Paramount on this one movie has led to a variety of offerings. The three largest chains are offering matinees prices on 80 For Brady from opening to closing, though Tuesday discount programs (slightly cheaper again) seem to be in effect for all three. The #4 & #5 chains in North America, Marcus and Cineplex, are doing “$8 for 80” throughout the run.

There was some marketing about this by Paramount in the week going into release… but I am still looking for anyone who noticed. Looking at all 5 chain websites on Sunday, I found only one clear reference to the offering, on the Cinemark site.

So did people coming to 80 get a nice surprise when it was cheaper than they expected outside of the matinee periods that have become standard again after thinning out a lot before COVID shut down theaters almost completely for 18 months? Or did they show up for the bargain?

The only other non-awards movie “for adults” in the marketplace is A Man Called Otto, which continues to hold like a champ with no discounting at all, aside from normal matinees. And Otto is likely a big piece about what convinced exhibitors to go forward with this 80 For Brady experiment.

Since it has gone wide - 4 weekends - the Tuesday number compared to Monday was down just 15% in the first week (coming off of the MLK 3-day), but then up 83%, 84%, and 74%.

In those same series of Tuesdays, Avatar 2 was down 61%, up 27%, up 29%, and up 29%.

It makes complete sense to project that one of the demos coming out for those Tuesday discounts are weighted towards older audiences.

Discount Tuesdays have been training price-conscious audiences to show up for the bargain and the full theatrical experience for years now. What kind of pop will 80 get this Tuesday?

The audience for movies in theaters - which has been a narrow swath of America for decades, except in rare event moments - remains about 10% of us… a little more, a little less. The goal must be to service that audience, while also keeping a flow of event movies, the revenues from which now make up about 2/3 of the theatrical business. But that other third matters a lot more than most people understand. Exhibition is a small-margin business and the cut back on the number of movies released is still the biggest threat to movie theaters.

I agree that there is room for success with serious pricing variations that serve that 10% and can potentially grow that number, albeit in a single-digit percentage. But not on an ad hoc basis… not with every movie coming to market with a different scheme.

I have long advocated for a reintroduction of the 2nd run theatrical model. In 2023, that would have to manifest differently than it did when there were a good number of actual theaters, mostly small multiplexes, actually operating as 2nd run houses. They are now banks or Starbucks or laundromats or gone completely.

The 2023 equivalent would be a 2nd pricing platform, triggered by box office numbers, offering movies generally between 25 and 45 days after opening day, at, say, half the price of the original theatrical cost. Two goals here… 1 is to drive cost-conscious people into maintaining the movie theater habit and 2 is to increase the value of the “lesser” rooms at multiplexes around the country… both of which also involves selling more popcorn.

Audiences who are must-see-first oriented and audiences who are wanting a premium experience would still be served at full price. People who are willing to wait, many of whom are inclined to wait from streaming (whether their expectations of windows are rela or exaggeratedly short) and many who are not comfortable with the current pricing of movies, would also be served.

Then, after what I think should be a minimum window for non-PVOD streaming of, say, 74 days, most films would go to streaming for-frickin’-ever.

That is, I think, the piece of this puzzle that has been lost to coverage. The exhibition window is, with all its limitations and all its benefits, a unique space that - with very rare exceptions - cannot be duplicated once it has passed.

Lower case “s” streaming, in all its variations, is forever. Physical media is a marginal, however beloved by some, business. I believe that PVOD will fade the further we get from COVID and the closer we get to Streaming bundles… some disagree.

I am not against the idea that price resistance is a legitimate issue. I am not against the idea that the cost of theatrical marketing isn’t a burden that every 90 minute+ piece of filmed entertainment needs to carry. I am not going to bother to advocate for the theatrical experience here, as that is a different issue than money.

BUT…

Every experience I have had in watching this business is that price competition, on a broad and inconsistent basis, is the first clear sign of The End. As soon as price competition is given room to breath, people compete. When they compete, the prices get lower. When the prices get low enough, exhibitors will not be able to pay their bills, no matter how big the Avatars of the world are.

As much of an advocate for theatrical as I am, I don’t have any fantasy about it suddenly becoming a significant growth business. It is not The Pie… it is a slice of the pie. It is, as I keep screaming, a very unique, unusually valuable piece of the pie. There is nothing like it. It is, with a few exceptions, the most anyone will ever pay for filmed content.

Theatrical needs to be managed and grown and rebuilt in its context. It’s not that it has nothing to do with the windows that follow… but it exists in a different commercial space. It is not just a matter of choosing to pay X for a movie theater experience or Y for a PVOD or Z for a streamer when these movies land more and more quickly. Theatrical is a very different choice and it can not be replicated on your couch, for better and for worse.

The 80 For Brady experiment likely cost Paramount and exhibition each about $1 million this weekend. Maybe a little more… maybe a little less. So no one is dying from it and exhibitors likely got the best of the deal because they had that many more people to whom they could sell popcorn and floss. (That would be a not-very-funny age joke, folks.) And what it means will become clearer as the movie plays on.

One of the big things that has changed over time is that distributors are not looking to squeeze every dime out of every window… this has been true for a while now. The difference with the current models is that, outside of the distributors’ offices, we really don’t know where the targets are and how each window is valued or devalued. As such, it gets harder and harder to be definitive.

Of course, as I finish writing this, AMC has announced variable seat pricing… an idea which I hate instantly… and will spend more time figuring out before I write a newsletter about that. The press release doesn’t offer a functional idea of how this will really work and the range of offerings are not yet available on the AMC app.

Until tomorrow…