Would you pay $20 to see the average blockbuster at your local multiplex? The co-executive chairman of Village Roadshow thinks you will.
Graham Burke says that Australia’s high wages, combined with the disease-like spread of piracy, have forced cinemas to raise their prices.
“In Australia we pay approximately $23 an hour for our people; in America, where we operate cinemas, it’s $8 an hour”, Mr Burke told Fairfax Media.
And he’s not alone. Benjamin Zeccola, chief executive of Palace Cinemas, has also defended a price hike, saying that after the cost of securing a film, a cinema might be left with just $6 or $7 from the ticket price. And like Mr Burke, he also pointed to piracy as a leading factor in cinema profits taking a dive.
Australia’s penchant for torrents sent the media into a bloodthirsty flurry after it was reported that we took the crown for the most illegal downloads of Game of Thrones. But while this might be an undesirable (and questionable) title, Game of Thrones is a television show, and somewhat irrelevant to cinema prices.
Box office takings across the industry fell 2.3 per cent to $1.1 billion last year. But despite the cries in the cinema industry, attendance rates actually increased in 2009-10, with 67 per cent of Australians aged 15 years and over having been to a cinema in the last 12 months, compared to 65 per cent in 2005-2006. In fact, 2010 set the record for Australian box office returns, with a gross of about $1.13 billion.
While it’s entirely plausible that cinemas have been hurt in the recent past by lower ticket sales, a quick look at TorrentFreak’s top illegal downloaded movies chart for the week April 21 shows that of the top five titles, only two actually received cinema releases in Australia – the new Captain America film, and something called Ride Along, starring Ice Cube.
So does Australia have an online piracy problem? The evidence suggests we do, but premium cable television seems to be taking a much bigger hit than the cinema industry.
While we were first in the world for feature films, pay-TV is a relatively new concept in Australia. And with a virtual monopoly held over the market for so long, this could be as much a cultural issue as it is a legal one.
But what about Australia’s sky-high wages? Village’s Graham Burke says the locals cost about $23 an hour to employ, while Americans only take home $8. Unfortunately, Mr Burke appears to have forgotten to take his $1 3D glasses off before checking the numbers. The average wage for Australians in the hospitality industry is indeed about $23 an hour, while the US figure of $8 an hour actually represents the minimum wage – which sees many Americans living below the poverty line and in need of government support.
Mr Burke did clarify that prices are simply a function of wages, “I actually think that’s a good thing because it means that the wealth is being shared and Australian people are doing well.”
This is true. Australians working full-time not being forced to live below the poverty line and our government not being expected to subsidise low wages is something we should indeed be proud of, even it does mean we pay a little more for a seat.
This isn’t the first time cinema has felt threatened by changing attitudes in its audience. In the early days of film, short presentations were virtually all that was on offer to most theatregoers. For the ticket price of 5 cents, audiences could marvel at films such as 1903’s The Great Train Robbery, an iconic achievement in cinema, running for just 12 minutes.
While Australia’s The Kelly Gang (1906) is often considered the world’s first feature film, it wasn’t until 1915’s The Birth of a Nation that feature-length productions really cemented themselves as the gold standard. But changing expectations among audiences eventually forced theatre owners to evolve. Gone were the old improvised storefronts, making way for the explosion of picture palaces that helped define the golden era of the 1930s.
With so many entertainment options on offer today, there’s little doubt that audiences have become more demanding. The concept of a classy bar at a cinema was almost unheard of as recently as the 90s, Palace Cinemas has helped make it almost standard.
But are cinema chains being innovative enough with their offering to warrant the rocketing ticket prices? Personally, I never cease to be shocked by the bizarrely limited choice at the average multiplex candy bar – usually a minimum of $12-$15 for triple the amount of popcorn that I’ll eat and a tank of Coke that would surely breach water restrictions.
There’s no doubt that price hikes will turn some away from the cinema. But there are still discounts available, such as cheap Tuesdays and online specials offered by some companies for their customers (e.g. Telstra). There are also options – you don’t have to go to one of the big multiplexes.
Melbourne’s Astor Theatre has been screening a mix of classics and current releases for years, with weekly discounted sessions and delicious house-made choc-tops. They’re also a lot more innovative with their product than any of the major brands.
The pollination of internet-based entertainment services means that it’s no longer enough to offer titles “only in theatres”.
There are a lot of people who would actually choose to watch Game of Thrones or House of Cards instead of The Amazing Spider-Man 2, regardless of price. Increasing costs is a fact of life.
But with great prices come great expectations – cinemas need to entice people out of their lounge rooms by offering something different.