Among the few stars in an otherwise dog economy is the theatre industry. Who would of thunk?
Adding insult to injury, contagious expansion of large screen HDTVs and inexpensive DVDs, VCRs, etc. gave the industry every reason to believe that consumers would be watching at home rather than going out for movies.
When the economy began to slip into recession during 2008, almost all travel and entertainment industries began to hunker down for a very dry spell. But, this dry spell was non-existent in most movie theatre companies.
In the U.S. alone, as people cut back on weekend excursions and annual vacations, and otherwise eliminated disposable spending rather dramatically, movie theatres prospered. Credit very smart marketing and very efficient operations.
First, the industry recognized that people cannot stay in their cocoons forever. When they can’t afford to go on a trip or buy sporting event tickets, movies can be a very inexpensive source of release and entertainment.
Second, like most consumer-driven industries, innovation played a role. 3-D has been around for years, but the industry leveraged big screens and new content (movies) to reintroduce a once dead dinosaur.
Finally, the industry held costs down and gradually ratcheted prices up to line the coffers of their businesses and stakeholders. In an otherwise depressed 18-24 month period of time, the movie industry has performed well above average and can be a model for others who have no apparent reason to succeed.
But, according to Gary Stibel, CEO of the New England Consulting Group, “pricing can be a double-edged sword even in good times.”
“The industry was brilliant to take pricing at a time when consumers needed theatres more than they had and when the pipeline of higher quality and more innovative movies was appearing on the scene,” said Stibel. “However, the industry has to be more cautious going forward lest they suffer the consequences of industries like greeting cards, sporting events and others that continued to take pricing when product quality and consumer demand were leveling off and the higher prices damaged demand and disenfranchised consumers as a result.”
The New England Consulting Group is the world’s premier marketing management consultancy and a power user of behavioral finance in pricing strategy, each of whose partners possesses 25+ years of line management and management consultant experience. For a list of New England’s clients and partners, visit www.necg.net or, for more information, contact Michelle Zarrilli, Public Relations Manager, at 203-226-9200 x118 or news@necg.net.
