Rewarding movie-going loyalty

Posted by Chris

June 16, 2007

When we talk about “improving the movie-going experience” or “making the movie presentation more attractive” or anything along those lines there’s the assumption that members of the public have chose movie-going as their entertainment alternative. After all, if theaters haven’t done a good job of simply getting people in the door then the sharpest presentation in the world isn’t going to do a lick of good. Presentation can certainly play a role in things but there are factors that have to be considered above and beyond that.

When you look at other stars in the media and business solar system you see other entities that are finding new ways to retain customers and find new revenue streams at the same time.

But first, let’s look at the movie-going experience as it stands in most large multiplexes now. You go to the theater and pay your $10 or so. In the lobby you’re exposed to ads not only for other current and upcoming movies as well as for products that have signed ad deals with the chain. When you get into the theater itself – after plunking down another $10 to $15 per person for snacks – you then get to sit through up to a half-hour of the pre-show ad/entertainment presentation. Once that ends you’re shown 15 to 20 minutes of trailers. Then and only then do you get to see the movie you came there for.

The main problem (there are many but I’m picking out this one) is that there has been no allowance made in the ticket price for the number of ads that the customer is exposed to. Think of watching a network TV show online; You have the choice to pluck down $1.99 for an ad-free episode or watch it streaming with ads. There’s a trade-off that puts the ad exposure choice in the hands of the viewer.
Here’s where we get into my idea. It comes from combining two things: 1) The loyalty programs in place at things like super markets and 2) The programs in place at some cell phone company to incentivize ad-viewing. With those in mind, imagine a scenario that involves the following:

I sign up for the Cinescope Theaters loyalty program and get a card with a magnetic strip on it. The program gives me an access code to the Cinescope Website where I can build a profile and watch ads that have been sold and delivered based on the information in my profile. After I watch 15 minutes of ads online (I can also have them delivered to my cell phone) I get a $5 discount on my next movie ticket, something that’s redeemable at the box office when the ticket-taker swipes my card. The best part is that I also get to select an ad-free presentation from a list of available showtimes since I’ve already watched my fair share of commercials.

How does this not work for everyone involved? The advertiser get to target the ads very narrowly and the theater gets to charge a premium for those targeted ads. I get targeted and relevant ads and I get a reduced ticket price to boot.

This seems like something that would encourage people to choose movie theaters from amid their myriad of entertainment options, just like it encourages people to choose one cell provider over the other. People are used to carrying these sorts of loyalty cards around with them for groceries, electronics and books. So this is behavior that the consumer population is already engaged in.

Right now theaters are doing nothing to build loyalty among those in the potential audience pool, counting on the films to bring people in. So any move they make in that direction would be a good one. But one that allows them to not only bring in patrons – who are still going to buy popcorn and soda – but also allow them to increase their advertising revenue, trading off the mass reach in some cases for better-targeted and higher quality ads. It’s a win/win.

Right now studios seem committed to a theatrical distribution model and that’s great. They’re also seeing DVD sales dry up and are feeling threatened from just about every corner. But exhibitors seem to be trying to actively honk people off with the experience they’re presented with. Anything that protects ad income but also encourages people to visit the theater seems like a reasonable business model to at least experiment with.