Wednesday, January 13, 2010

The SkyCity's the limit

I love a good movie. I even love quite a few bad movies. What I don’t love is the ever increasing cost one has to pay for the privilege of seeing the movie on the big screen. There was a time when a night at the movies cost nothing more than a lazy Kate from mum, half for the pre-movie combo and half for the movie itself. Admittedly, there was probably a time when a movie cost nothing more than sixpence from Aunt Mildred, half for the movie itself and half for a to the local opium dealer. I don’t remember those times, and there’s a chance they never existed, so let’s stick with the age of the lazy tenner. As time passed the price of tickets increased. That’s not all that strange, the price of everything increases over time due to inflation, with the exception of air travel, for some reason. It’s important that I note here, before I get swept away by the rant inside, that when I refer to ‘cinema’ or ‘they’, I am really referring to SkyCity Cinemas, who own somewhere in the region of 97% of cinemas in New Zealand. There are plenty of other, non-SkyCity cinemas in New Zealand that may be doing a damn fine job, or a damn lousy one, I just haven’t had much experience with them so I’m unable to comment.

In New Zealand the inflation rate is currently 4.3%. So if a movie cost $5 in 1992, due to inflation alone it should have cost $7.38 in the third quarter of 2009 (thank you RBNZ for the handy calculator). Instead, movie tickets were $15.50 in the third quarter of 2009. But wait, you smugly decree, you were a child in 1992, a child’s ticket would have cost $5, not an adult’s. Smugly noted. However, in the third quarter of 2009 a child’s ticket cost $9.50. That’s more than $2 higher than inflation. Not all that much for the individual, but when there are more movie cinemas than ever, implying that movie attendance is higher than ever, that’s a lot of extra profit for movie industry. I’m sure a similar situation exists for adult ticket prices.

During the age of the lazy tenner, 1992, the highest-grossing movie was Aladdin, bringing in US$504,100,000, that’s NZ$931,276,556 at the 1992 exchange rate (thank you again RBNZ). That’s a lot of money, especially when the movie only cost US$23 million to make. You would assume then, accounting for inflation, that in 2009 the highest-grossing movie would make about US$777,122,000. After all, there was a recession on, times were tough, biggest financial crisis since the Great Depression. Ahh, but when you’re eating soggy newspaper for dinner and living in a shoe box in the middle of the street, what better way to spend the money you earned shining shoes outside the local speakeasy than visiting the world of Pandora in ground-breaking 3D. A world where creatures are almost identical to those on Earth but with an extra pair of limbs; a world where nobody ever takes down their Christmas lights; a world where it’s somehow more cost effective to transfer the consciousness of a biologist into a genetically matched Alien body to go out and observe the local flora than it is for them to simply wear one of those gas masks. It’s also a world where inflation means nothing. US$777,122,000? Try doubling it. In less than a month Avatar grossed US$1,346,805,340 worldwide. That’s 10 digits right there. Titanic has only managed to gross US$1.8 billion in 12 years. Granted, charging an extra $1.50 for the novelty of seeing it in 3D (which is totally worth it by the way) helps boost profits. It’s not like it was the only movie to post an obscene profit in 2009 though. Harry Potter raked in US$934 million, Ice Age 3 got US$887 million and Transformers 2 took in US$835 million. Good lord, even Alvin and the Chipmunks managed to get their grubby little paws on US$177 million, and that was just in a week, or should I say in a 'squeak'? No, definitely not.

The rise in movie ticket prices, therefore, can’t be because of inflation, and since inflation takes into account increases in the average wage, it can’t be blamed on the high-rolling individuals the cinemas employ. Movies are continuing to haul in more money than Scrooge McDuck could swim in, so it’s not a failing movie industry that’s driving the price up. I’d like to say its pure greed; however I don’t have all the facts. What if the mob has SkyCity’s daughter and is demanding they increase their ticket prices at a slightly greater rate than inflation over a 20 year period or they’ll kill her? What if SkyCity is in some sort of corporate competition to see who can offer their customers the least value-for-money? Well, if the latter is the case, I hardly think SkyCity can win. The tobacco companies not only charge a lot for a product that costs very little to produce, but they actually say on their packaging that using their product will kill you or worse and people still freely hand over their money! We’re still a good few years away from paying $25 to sit in a cinema while being heavily irradiated, so for now you can rest assured that at least buying a movie ticket is better value than a packet of cigarettes.

I think I lost the point somewhere in the last paragraph. I’ll try and get back on track long enough to wrap this up. Movie companies, like most other companies, exist solely to make the biggest profit they can. I’m sure there a few very wealthy people sitting in a room screaming “another 50 cents!” and rolling around on the floor laughing as they watch more and more people flock to fill up the ever-increasing numbers of cinemas. To those people I begrudgingly quote Brian Tamaki: enough is enough. We get it, you all make a lot of money and you’re diamond-encrusted lifestyles are very impressive. But please, why don’t you try offering us, the loyal customers, a brief respite from your profit-mongering so that we can enjoy the cinema without having to decide between a couple of hours in Pandora and a weekend in Wellington. I promise if you cut a little off the top, maybe taking it back to the age of the lazy tenner, without the combo, I’ll see twice as many movies. That’s a 33% increase in profits. And even if others don’t follow my lead then worst case scenario is that you lose a bit of that wealth and have to go back to simpler, gold-encrusted lifestyles. I’m sure James Cameron can lend you a few million if times get really tough, he owes you that much.



    It would seem from this that inflation in NZ got consistently worse since 1992.

    BUt since I cant find the actual figures, i'm not sure how this helps.

  2. Box office takings......(Boring), Album sales figures.......(Boring). Good stuff Gareth. I hate these random billion dollar amounts they throw out these days. Honestly who fucking cares. Its like if they ramp up the first weeks takings, they just think it will have a snowball effect. Gotta love the hype machine. And yes, it costs way too much to go to the pictures these days.

  3. Inflation has fluctuated, but the RBNZ inflation calculator takes that into account. Here's link to a graph of inflation rates since ye olden days: