Tuesday, November 29, 2011

Supply and OnDemand

The pricing of movies -- from their theatrical release through their ultimate arrival in the cheap bin at the drug store -- is like a lesson in Economics 101.

When the demand is highest for a movie, its cost is also going to be highest. This is why a shitty movie that was just released can actually be $19.99 (or more) on DVD, and maybe even ten bucks more than that on BluRay. The perceived novelty of it drives up the price. A year later, that same shitty movie may be worth only five bucks in either format. It's all a matter of waiting it out.

The same is true for catching a movie in rented format. Earlier this fall, Universal played around with the idea of charging customers $60 to rent Tower Heist the same day it hit theaters (or very soon afterward). The idea was that the price would seem reasonable because the demand is so high for a just-released studio film to be available immediately in your own home. Films that are a month old, but haven't hit DVD yet, can be bought in a hotel room for usually $12.99 or so. Then the price goes down once they've hit DVD, usually to either $4.99 to rent it on pay-per-view (OnDemand), or essentially free as a Redbox rental (just over a buck) or part of your monthly Netflix plan.

Theatrical also works this way to some extent. Within the same theater, ticket prices usually stay the same from the time the movie arrives until it leaves. However, you might get to pay a bit less by waiting a couple weeks, if there's a theater that shows second-run movies near your house. (Too far away, and you're sacrificing your savings on the ticket by paying more for gas.)

What I really want to concentrate on today, however, is rentals. Universal may have scrapped its plan to charge $60 for Tower Heist, but the idea may have been right, especially for someone like me, who can only get out to the theater a finite number of times. Especially when I place a premium on watching the movie before the middle of January.

I've been an unusually high customer of VOD (video on demand) for about the past month, and it has everything to do with getting to watch a movie at home now rather than waiting until it comes on DVD (probably in February or March). See, I try to watch all the movies of significance that I can from a given release year before the morning the Oscar nominations are announced -- which will be January 24th in 2012. That's when I finalize my list of rankings from first to worst, and in order for the list to seem complete, I'd like movies from November and December to be (almost) as well represented as movies that came out in March or April.

But that second group has the distinction of being available to watch on DVD whenever I want. The first group does not.

And so it is that I've been like a heat-seeking missile, focusing on movies currently in theaters that are also available at home on my TV right now. It's this mentality that has led me to pay a combined total of $23.97 to watch Melancholia ($9.99), The Human Centipede 2: Full Sequence ($6.99), and most recently (this past weekend), Margin Call ($6.99).

I guess it's better than paying $60 for Tower Heist.

Actually, I've liked all three movies to varying degrees. (Yes, even Human Centipede.) And if I'd gone to see them in the theater, those movies might have cost me more like $40 rather than $24.

But only Melancholia is a movie I might have actually seen in the theater. With the others, it was all about trying to make my list of year-end rankings seem more comprehensive.

I guess I should tell you that traditionally, I'm a bit puritanical when it comes to using pay-per-view, or OnDemand, or video on demand, whichever term is really the correct one. I'm generally not willing to pay the extra couple bucks for the convenience of being able to watch a movie on the spur of the moment, rather than waiting for it to arrive through Netflix or going to a Redbox kiosk to pick it up. In fact, I'm the guy who will go to incredible lengths to be sure I don't pay a late fee for a rental, or don't let my Netflix rentals sit around too long collecting dust on the coffee table. I'm always conscious of the margins, if you will.

But with Margin Call and the others, the demand truly did win out. These movies released theatrically in October (or with Melancholia, November) carry an extra value to me in that they contribute slightly more to my certainty that I've surveyed the complete list of available options from a given release year before determining which movie I like best (or worst). And in each case I was able to watch it at a time when a theatrical screening wouldn't have been possible -- with Melancholia and Centipede, it was late at night, and with Margin Call it was during the day while I was watching my son. (See, I didn't think I should subject him to the grotesqueries of Human Centipede, which certainly has me in the running for Father of the Year.)

However, I should say that I'm glad not all movies are made available this way. It could get very expensive for me very quickly.

Then again, isn't part of being a movie fanatic that you can't count your pennies too much? If you're like me, you've probably made the determination that it just costs what it costs to see movies. If you're determined to see a movie in the theater in 3D, and it costs $16.50, well then that's just what it costs. If we were model train lovers, we might spend $20 on a row of bushes to go alongside the tracks. But our hobby is movies, and so we spend that twenty bucks on a movie and a popcorn instead.

If you are counting your pennies, you can always wait until DVD -- but then what would you talk about at cocktail parties?

However, the characters in Margin Call itself probably wouldn't have been too happy with me. I bought their security at an increased price despite seeing it in a compromised format (at home rather than on the big screen), and don't even have any assets to show for it -- not even the toxic asset of a DVD that'll take up space on my shelf.

Guess it's good that I'm a film critic rather than a day trader.


Mike Lippert said...

Seems like quite the issue. I've given up on trying to see everything possible just for the sake of a year end list. One of these years I'm just going to give doing that up enttirely because it places too much emphasis on seeing movie and not enough on thinking about them.

Vancetastic said...

I'm not there yet, but I want to get there. I agree it's a bit obsessive and possibly self-destructive that by the time October rolls around, I'm starting to increase my viewings in order to get to some magical number (over 100 if possible) from the previous year. But you're right, you're really sacrificing thinking about the movies you do see, especially when you are just cramming them in in the final month. I try to see something like ten movies in the final week before my list closes, but how much of a fair shake am I really giving those movies, both in terms of thinking about them and in terms of placing them accurately on the list? Sometimes the result is that a movie watched very recently gets too much credit, as you conveniently forget the strengths of movies you saw earlier in the year.

Oh well, it's a system I'm committed to at least in the short run.