AMC Offers Movie Fans Money Back Guarantee

Demanding one’s money back is a recent development in the market place. In the early days of economics, the term was “caveat emptor,” but this has changed. Now, a consumer who’s dissatisfied with a product or service can get replacements or even void the transaction. This week, AMC Entertainment offered a money back guarantee on the Russell Crowe feature film “Cinderella Man.” This could prove interesting.

This is not the first time there’s been a money back guarantee. “Mystic Pizza” got the same treatment from AMC back in 1988, and it proved to be the break-out film for Julia Roberts. But back in 1988, the movie industry wasn’t facing a summer of doldrums. This might just be something different.

For the past 18 weeks, the major studios and the theatre owners have shown year-on-year revenue down each and every week. Declining ticket sales may be the result of what might generously be termed “below average” films that have been released this year. But lame films don’t explain all of it. The fact that ticket prices have risen to $10 in major cities doesn’t help. And the average ticket, which would include kid’s prices and early bird discounts, is $6.22 according the National Association of Theater Owners (the other NATO). Could it be that prices have hit a major barrier? Maybe people don’t mind seeing a lousy film at $3 or $5, but now serious money is at stake.

In the specific case of “Cinderella Man,” the studio has made a mistake, and it’s trying to fix it. Grown-up dramas traditionally don’t sell in the summer, and this film is not a “car-chase and girls” movie. That may explain why it has earned just under $50 million in four weeks while costing $88 million to make. If it came out at Thanksgiving or Christmas, perhaps it would be in the black four weeks along. A money-back guarantee might just fix that before September.

On the other hand, the cinema is not quite as vital to consumers as it used to be. With video technology and home theatre systems, sitting in front of a screen while one’s neighbors talk and take cell-phone calls is less attractive. If so, 2004 was the high water mark. Fortunately for the studios, the video market ensures greater returns on investment, but that’s cold comfort to the theatre owners. On the other hand, these are the clowns who are charging $5 for popcorn and $4 for a Coke, and they won’t give back the money on that.


© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.
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