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Mark Cuban’s Challenge – My Answer…Buzz

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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.

60 Responses to “Mark Cuban’s Challenge – My Answer…Buzz”

  1. JaniceTheSecond

    Just imagine the box-office person arguing with a teenager whether a coffee-stained, bent-out-of-shape stub is legit, when there are 10 people waiting in the line and it’s 10 min before the movie starts.

    Not to mention the after-market trade in stubs, or the web 2.0 social networks for stub lover or auctions in stubs.

    I doubt that this idea alone will save the movie industry.

  2. bluechihuahua

    Hey HOLLyWOOD–want my time and money, and word of mouth? the answer is simple: stop making formula movies based on shallow pop-culture ideals concocted by mediocre mall public education sheeple. and stop paying bubble-headed actor’s (like Ben Affleck) the lion’s share of production costs. pay-up for real talent: get real writers!

    Studio management needs to take responsibility for the garbage they continue to churn out: everyone there should be paid a percentage of profits –that would create incentive to actually make interesting movies.

    Bloated movie budgets are so common and absurd–it is on par with government’s wasteful and sloppy spending.

  3. Josh Hyde

    Sorry Om, I have to disagree. I can’t imagine toting around ticket stubs. Uh, this is the electronic age, right? I don’t carry cash around and you want people to carry stubs?

    The way to make people come to the theaters more is to make it more of an experience. Right now teenagers are the ones frequenting the theaters the most because it is a place they can hangout, a social experience. Now if theaters were to enhance the experience for the older audiences, that would bring in more people.

    The problem is older audiences have higher standards that they want met otherwise they won’t go regularly. Why not have two different theaters (one premium and one standard) on the same property? Kinda like having a Marriott and a Fairfield Inn on the same property or sitting on the 50 yard line instead of behind the goal posts. I, for one, would go to the premium theater and pay more for the movies that I really want to see. That’s how I would do it.

  4. That’s a really interesting idea, Om. Using stubs to promote word-of-mouth marketing could be an important step towards revitalizing the cinema industry.
    What I see is that, it adds a nice networking element to the movie watching experience. Stubs could become a part of every conversation about a movie. And of course, websites revolving around the concept of sharing/exchanging/displaying your stubs would crop up too.
    Of course, once some extra thought and research is put into it, the idea would become more refined. I think movie theatres should definitely give some thought to this idea.
    I am not too sure about the concept of the discount going up as the stub becomes older. Wouldn’t it be better if it was the other way round? I mean, each stub would give you a discount on say 5$ on the same movie after 2 days. After that, the discount would keep reducing. This would encourage people to watch the movie immediately. On the other hand, if the discount were to keep increasing, people might keep putting away the movie for a later date. Even without the stub thing, I generally have the habit of putting away the watching of a movie every time because I have other things to do.

  5. If the Pittsburgh Pirates win people will watch them.
    please buy the pirates allready. your pocket change could get them to the world series. McClatchey is a douche.

  6. I like the idea but it does not address Mark’s original question, “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 much of the movie industry is driven by the opening weekend and the current model requies massive spending to drive this. There are always exceptions (Snakes on Plane) but if you try to copy this grassroots model for all releases, it too will get old. I don’t have an answer for Mark on this front.

  7. pacheco

    I don’t go to movies as often as I would want, and it IS because of prices. See, I don’t often go to the cheap theater because of the sticky floors, bad projection, etc. The more expensive ones, like the indie theaters, have better facilities and crowds. I’d definitely be up for the stub discount.

  8. I have to agree with Andy. The reason people don’t go to the movie isn’t because it costs too much. It provides little value. Watching a movie at home is almost as rich of an experience (or at least “rich enough”) for many people, and it orders of magnitude more convenient. No driving to a theater. No waiting in line. No price gouging on concessions. No screaming little kids during the movie. No giggling teenagers during the movie. At home you can pause the show to go to the bathroom, make some popcorn, answer the phone, whatever.

    The movie theater is an inferior product. As people have more money, they spend more on home theater equipment, DVDs/Netflix, etc. They don’t go to the movie theater more often.

  9. or as my friend says do what Sony does… promise the world in your product, create buzz… then backtrack on those promises and say it will not be included… only works if you have had successful brand recognition from the past… in other words, burn your good standing and reputation for the sake of a quick buck… that’s how Hollywood sequels work. :)

  10. Patrick Mullen

    Interesting, but would the ticket stub be more powerful than someone just telling a friend that the movie was really good? Would I give a ticket stub to a friend to go see a movie I didn’t enjoy? If I enjoyed it, wouldn’t I just tell a friend that they should go see the movie because its good?

    What about a frequent flyer type of deal, see 5 movies, get the 6th free?

    One problem is that its not like the studio’s care if you go see multiple movies some of those movies come from other studios.

  11. Suresh Venkataraman

    Building on your idea to increase sales in a theater –

    1. Reward the movie goer himself instead of a friend. If I see a movie in the first week, then I can use the stub for some OTHER movie that is running in its second week (or later) to get an appropriate discount for the ticket.

    2. Subject the original stub to an expiry date of say, 1 month and you may have repeat customers within a month.

    3. The stub for a movie that is seen in its second week gets a smaller discount than the movie stub for a movie from the first week.

  12. or another couple of ideas: first, extend premovie ads to 30 minutes or 45 minutes and then if people show up at the start of ads or before, they see the movie for half price…this would include previews and trailers and yet another coke ad…or alternatively, when a movie bombs on the first weekend, the studios cut ticket prices in half and simultaneously release into cable and download alternative channels (a la cuban’s dud film about the dolls)…basically, that ticket stub idea is only a patch – movies are moving toward multichannel simultaneous release, and if i’m presented with the option to watch at home for a premium or get 3 bucks off in the theater, then i’m gonna stay home, away from cell phones and chattering teens…

  13. Dance in Smarty Pants

    I like the idea but would propose that the ticket be changed to communicate a link to an online campaign or a sweepstakes promotion etc so that the value could be greater than just a discount for a friend. Create value beyond the paper-stub. If you could link the stub to an online community (unique number = unique entry) similar to how the Passport program worked for Rugrats (over 32 million passports distributed)… maybe. Perhaps the more times the ticket stub gets passed along, the value (chance for a sweepstakes win) increases? Similar to a loyalty program like Coke Rewards…

  14. I think it’s a great idea!!

    Funny, cause I thot it was going somewhere else. I thot the suggestion was going to be to increase the value of the ticket, similar to a superbowl ticket. Make it LOOK fancy and theme it after the movie… like PIRATES would have a treasure map on it.

    But I still like the incremental value added idea. It’s a good one!

  15. I’m not George Costanza. I’m not going to carry 15 ticket stubs around for weeks. The main problem lies in our inherent lack of selflessness. If I’m handing out stubs but not getting any back in return, where is the upside for me? Even worse, if that stub thing worked, it would destroy Hollywood. Actors, Agents, Studios are made or broken based on how a movie opens. If opening weekends dip down (because people were waiting on friends to give them stubs), the whole scale is tipped.

  16. PanMan

    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.

  17. 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.

  18. 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.

  19. 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.

  20. “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.

  21. 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.