60 Comments

Summary:

A few days ago, billionaire Mark Cuban (who owns various entertainment assets, including a film production studio, theatre chain, etc.) posed an open challenge on his blog: … How do you get people out of the house to see your movie without spending a fortune. How […]

A few days ago, billionaire Mark Cuban (who owns various entertainment assets, including a film production studio, theatre chain, etc.) posed an open challenge on his blog:

… How do you get people out of the house to see your movie without spending a fortune. How can you convince 5 million people to give up their weekend and go to a theater to see a specific movie without spending 60mm dollars.

So if you… have a great idea on how to market movies in a completely different way. If your idea works for any and all kinds of movies. If it changes the dynamics and the economics of promoting movies, email it or post it. If its new and unique, i want to hear about it.

Since Mark and I have a little bit of history debating issues that are vexing the entertainment industry, I thought it would be appropriate (and fun) to respond to his challenge openly with this post. So with that… Mark, here’s what you should do.


Whenever anyone goes to a movie theatre, they end up with a ticket stub. I would propose that you create a program/system to make those ticket stubs into currency… essentially a coupon that can be passed around, traded, bought/sold, etc.

Allow me to illustrate with a hypothetical. Let’s assume I went to see The Pirates of the Caribbean on opening day and I paid $8.00 for my ticket. I leave with a ticket stub that has been date/time-stamped. Then sometime during the following week, I run into my friend Sarah at Starbucks.

During the course of our conversation, I tell her that I had seen Pirates and recommend that she should see also it. As a friendly gesture, I pull out my wallet and give her my ticket stub. Sarah decides to go see the movie the following weekend, and since exactly one week has passed since my ticket stub was stamped, she is entitled to receive a $1.00 discount. Now, had she waited two weeks to see the movie, she would have received a $2.00 discount.

In other words, the stub becomes more valuable as time passes… up to the point where the ticket price post-discount begins to approach the value of DVDs entering the rental release window. Sarah, delighted by my kind gesture, returns the favor by presenting me with a stub of her own… a 3-week old stub for The Devil Wears Prada. Although I hadn’t been planning to see Prada, I decide I might as well since Sarah’s stub means I’ll get $3.00 off my ticket price.

These days, word-of-mouth is the single most influential factor that drives a film’s success. And what I am proposing is akin to institutionalizing word-of-mouth into a capital market, where the ticket stub becomes the currency. Not only is this concept likely to increase the volume of movie-goers (as any consumer goods promotional expert will attest), it is also likely to impact the distribution curve of box-office receipts… when the vast majority of movies are released into the theatrical exhibition window, they normally go through a fairly consistent demand/revenue curve at the box office… essentially, box office receipts are cut in half with every subsequent week.

So if a film grosses $100 million opening weekend, it’s likely to do about $50 million the following week, then $25 million the week after that, etc. By turning ticket stubs into coupons, week-to-week box office numbers are likely to get impacted by increased demand and volume of viewers… which consequently should improve marketing budget yields via lowered customer acquisition costs.

While there are many more implications I could discuss (e.g. stubs will probably show up on eBay, people will list their stubs on their social networking profiles, etc.), I’ll stop here for now. So Mark, chew on the concept… I think it will change the dynamics and economics of movie marketing and promotions.

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  1. There’s no real incentive for me as the opening day movie-goer to share my stub. Sure, maybe one day down the road I might someone else’s stub but I’m have enough clutter and gave up on grocery coupons a long time ago. Given that… the movie theaters should offer the descending pricing you propose without passing around my trash.

  2. Guillaume Theoret Thursday, July 27, 2006

    “These days, word-of-mouth is the single most influential factor that drives a film’s success.”

    Case in point: Snakes on a Plane.

    They have a huge amount of buzz and I don’t think they spent much to get it. Opening weekend at least should be a smash hit for them.

    Unlike Dave, I think keeping the ticket stubs is a great idea. Not only do you give incentive for someone else to go, people rarely go to the movies alone so they’re going to drag someone else along too.

  3. That was better than what I was thinking of.

  4. great idea Om,

    that might actually catch on… very novel.

  5. I am a movie goer and that would work! How many stubs is Mark going to give you for the idea?

  6. Wow !! What an idea. If someone implements this, you should definitely be rewarded handsomely.

  7. I’ve been thinking more about this… The reason I avoid movie theaters has nothing to do with cost or even content. So unless those movie stubs can also magically block cell signals, silence bickering couples or rowdy children, unstick floors, etc they won’t get me back into the theater.

  8. Robert,

    You are in the wrong business, being a blogger!

    I love that idea. That would absolutely get me back in the theater, because it also takes care of those high ticket prices (Europe), which is an added bonus.

    If they have any smarts they’ll do that right now.

  9. Paul McNamara Thursday, July 27, 2006

    Fascinating idea, but I, too, doubt that it would produce any significant results. Factor in the price of babysitting and refreshments and the buck or three saved on the ticket price begins to look insignificant. Of course, I don’t attend movies often. Perhaps the regulars would find this prospect more appealing. And (to further undermine my opinion) maybe the revenue bump would need be only modest given that the costs of establishing such a system don’t appear to be daunting. Either way, if it had been my idea I wouldn’t have posted it here for all the world to see.

  10. I like the idea! But I wonder if the increasing value is a good idea. Ofcourse this evens out the demand curve a bit, but on the other hand, it awards me for not going to a movie NOW, but wait to see it. I might decide that i’ll wait 4 weeks, to save the $4, and then forget about it alltogether, lose the stub, or just not care anymore. While if the incentive is to get a discount NOW, I rush to see the movie this evening. I think many people plan on seeing movies, which in the end they forget about. Marketing is also about using the buzz when it’s still ‘hot’, and not a month later, when the next big hit is around the corner, and most people have forgotten about last months hit.

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