Guest Post by Jon Fougner: Cinema Profitability Part 3
This is Part 3 of Jon Fougner’s guest series on Cinema Profitability – today he focuses on the channels:
Do the Big 3 have channel strategies? The vast majority of their tickets are sold either at the box office or via 1 of the 2 online brokers: Comcast’s Fandango with 9mm monthly uniques (used by Regal and Cinemark, plus the legacy business of AMC’s Loews) and AOL-related MovieTickets.com with 3mm monthly uniques (used by AMC ex Loews, plus some legacy business from theaters now owned by Regal). My Gmail is chockobloc of order confirmations from both of these brokers. And yet, I’ve never as a result received targeted e-mail marketing from either of them nor the Big 3 whose inventory (among others) they represent. What a missed opportunity to share anticipated, personal, and relevant marketing! Instead, apparently indifferent to its own brand, Fandango indefatigably pushes irrelevant co-marketing offers (“Get your free credit report and credit score in seconds”), exit pop-ups and all. My inference is that the Big 3 have failed to negotiate an e-mail marketing partnership with their brokers, who, left to their own devices, have strayed off into unsavory lead generation rather than fishing where the (cinephilic) fish are.
This doesn’t make sense. The brokers are in a weak negotiating position, since they need at least to show the Big 3’s showtimes (as they currently do) to appear comprehensive to users. The Big 3 should get out of exclusives with the brokers so they can use them but simultaneously rep their own inventory online, as the airlines do. This would take a bit of SEO, so consumers find their O&O sites when they search on movie titles. The Big 3 tend to invest as consortia, but it’s time for a go-it-alone adventure here.
Website optimization is a separate topic I’ll touch on later, but while on the subject of online ticketing interfaces (whether 3rd party or O&O): there’s no excuse for missing out on free social marketing tools. For instance, implementing Facebook Connect could make it easy for a customer to broadcast his ticket purchase to all his friends, at no cost to the ticketing site. Better yet, when he arrived on the site, he could see which friends were going to which screenings of which movies. Movie-going, after all, is social.
Once a Big 3 player builds its own ticketing site, it should build an affiliate program, giving away most of the service fee as commission. Fandango runs an affiliate program through Commission Junction; its paltry $0.10 per ticket commission pales in comparison to that of leading programs such as Amazon Associates on both a %-of-revenue and a %-of-gross-margin basis, because Fandango knows it has only 1 competitor, whose affiliate program appears to be private. The main partners of such a program would be film sites, the websites of newspapers and local TV news programs, and the long tail of cinephile amateur bloggers. Critics tend to prefer highbrow (think New York Film Festival) and middlebrow (think Oscars) films to mainstream Hollywood fare, so a potential consequence of such a program is the emergence of a viable top-to-bottom marketing funnel whose lack heretofore (along with the expenses of physical prints) accounts for the paucity of “art” films in Big 3 houses.
END OF PART Three Tomorrow: Marketing