Choose fewer "right" movies and show them longer: in the tight margin world of exhibition, this may become a mantra. Three academics who collaborated at the University of British Columbia have developed a mathematical programme that helps exhibitors determine which films to run, if and when to replace them and how long to play them. Their research, just published in the journal Marketing Science, suggests a multiplex's profit margins can be increased by between 30% and 100%.
"In some respects movie attendance is predictable," says UBC marketing professor Charles Weinberg, one of the developers. "But once a movie has been on for a couple of weeks, the attendance is very predictable. You can forecast the percentage decline for the rest of the run." Because the revenue sharing relationship favours distributors in the initial stage of a film's release, it's in the best interest of exhibitors to identify those films with legs.
Using box office returns from a New York City multiplex, the trio postulated that the theatre could have improved net revenue by extending runs of certain films and saying no to the hard sell tactics and the multi-week commitments of distributors pushing new releases. While an experienced exhibitor can do the calculations, Weinberg says SilverScreener, as the software is called, helps theatre managers make better decisions more quickly.
The software is currently being tested by an undisclosed European exhibitor. If it works in the real world, SilverScreener may be commercially available within the year.