Explanation as to why Cheaper ticket price is Bad for us Let me explain in simplistic terms why the price of a ticket for D-Box is $5 it would be worse for us.
When D-Box goes to Hollywood they have to give them an incentive to allow the movie to be coded in D-Box. So D-Box offers them let's say, "$3 of every $8 ticket sold"
D-Box then gets the coding rights. Great!
Now D-Box has to convince the theater to install the seats. The theater says, "Whats in it for us?" D-Box says, "Well, you will be more competitive offering a premium product over other theaters, and you will also get $3 for every $8 ticket sold"
Theater says, "Great! - we'll buy these seats and install them, but boy they sure do cost alot per seat....so I'm only going to install 30 per screen because our budget doesn't allow it, and the payback period is about 2 years before we get our money back from these $3 per ticket"
Okay so now they are installed and Hollywood gets $3, Theater gets $3 and D-Box gets $2.
Now under the $5 price point here is what happens.
D-Box says to Hollywood, "We are going to lower the ticket price to $5" - Hollywood says, "Do what you want, but we aren't letting you code the movie for less than $3 per ticket"
D-Box says okay fine.
D-Box goes to the theater, and says, please lower the price to $5 - The theater says, "well, we will still get to keep our $3 per ticket right?" D-Box says, well no, we want you to only take $1 per seat now, but we feel that the usage will increase by 30%-40%. And we feel that you should now buy more seats because usage demand will be higher"
Okay now we have a problem....the theater will have to spend more capital on buying more seats, and now it will take a longer payback period to pay them off because they are only receiving $1 per seat.......Also, do you honestly believe the usage would increase by 300% in order to make it worthwhile for the theater to put more seats in? When 3D came out, foot traffic didn't even increase 100%.
So the theater is going to say, "NOPE....we want our $3, or at the least, $2 per ticket sold" -
And THAT is where D-Box then cannot take any royalty at the expense of pleasing the theatres and now has NO piece of the pie, and with NO guarantee that the theater will install more seats....the amount of increase of usage won't be enough to make a theater buy thousands more seats.....it just doesn't work.
This is where you guys aren't doing your math and don't understand....until Hollywood says, "Okay we won't take anything on the ticket, or very little" then we cannot lower the price because we need that royalty revenue too.
I'm always amazed at how a theater, you will find every cheap fck on the planet complaining about prices.
But these are the SAME people that go and spend $50 on a bottle of wine, $200 on a pair of shoes or $12 on a Big Mac Combo at McDonalds....at least at a theater you are getting 2 hours of entertainment......with McDonalds and Wine, you are getting nothing but a heart attack, and a hangover.