Banksy’s documentary ‘Exit Through the Gift Shop’ sounds like a great business strategy for cinemas still emerging from the pandemic. Do the captive audience math: “The Little Mermaid” + two children under six > a father who would never hear the end of it.
However, it turns out that there are forces even greater than the children asking Barbie in a gold disco suit (pictured above) for $50: these include logistics and licensing.
Exhibitors are well aware of the need for brand extensions and use cases. During COVID, theater owners have turned their expensive screens to plays and private screenings. Once the movies are back, AMC-branded popcorn is back too. It’s now available at your local Wal-Mart, but do you know another high-traffic retailer with shelf space and cash registers? Cinema.
IndieWire asked the major players this question: Why not sell movie merchandise in movie theaters? Genius, right? We thought so too. However, the industry is divided.
In the midst of the post-pandemic recovery, lobbies are undergoing revamps and updated merchandise flows. A Cinemark rep told IndieWire that most of its 317 U.S. locations have at least a few movie-specific items for you to purchase.
AMC, the market leader with nearly twice as many locations as Cinemark, is slowing down on the concept. After all, an ocean liner is more difficult to navigate than a Bayliners. Though happy to push movie-specific ways to enjoy your refreshments (never wanted to eat popcorn from Dom Toretto’s car?), AMC’s “collective grants” have, up to this point, generally been limited to increases in snack sales. A wider range of officially licensed film merchandise is available on the AMC website.
“As a result of our success through in-theater and online sales of AMC’s popular collectible liners, we believe additional opportunities exist in strategic theater merchandise sales,” an AMC spokesperson told IndieWire. “While we’re not quite ready to share our plans in this area, we’re excited to continue to offer AMC viewers unique and special items related to their favorite new releases.”
Cinemark, which has launched its own merchandising website last month, he’s more chatty about various opportunities in the lobby. Wanda Giehart, chief marketing and content officer, told IndieWire that she wants her theater lobbies to match the “experience economy” we currently share. “We are a memory-making industry,” she said.
And nothing punctuates an experiential keepsake like a souvenir. A proper gift shop, complete with toys, hoodies, figurines, posters and collectables, seems like a better use of space in 2023 to us than dusty arcade games. (Giehart said those quarter lockers “still work” revenue-wise: “Otherwise we wouldn’t have them.”)
Cinemark has found some success with what it calls its “Super Ticket” program. For $50, a Super Ticket took a Cinemark customer to a 3-D “Super Mario Bros. Movie” projected on their biggest screen, with a Mario shirt, hat, buttons, popcorn bowl, and a mini poster of the film distributed at the Theater. For “Spider-Man: Across the Spider-Verse,” a $45 Super Ticket included a popcorn show and a redemption code that sent a personalized mini-poster, T-shirt, and digital soundtrack directly to the customer’s home.
A Cinemark rep emphasized for this story that the company’s main focus remains to maximize the box office. They’re happy to find ancillary income opportunities after that, it’s like the spokesperson said it.
There are many hurdles for a cinema that goes deeper into the merchandising game. First, you’d need additional staff, the kind trained in loss prevention. And while Cinemark’s redesigned lobbies (pictured above) look gorgeous and have some storage built into the new inventory displays, it’s not enough to do the whole Build-A-Bear.
And that’s hardly the only logistical problem here. Giehart, who has 30 years of retail experience ranging from selling furniture to clothing and travel accessories, said the challenge is, as she put it, “How do we think about a full year of filmmaking?”
However, no one beats 1,000 on supply and demand forecasts, and the shipping costs associated with returning unsold merchandise to the manufacturer can be enormous, said a show executive who spoke to IndieWire on condition of anonymity.
Any business model would rely on collaboration between studios. According to a source familiar with the retail space, companies like Disney and others have launched pop-up shops or kiosks offering movie-specific collectibles like a Funko Pop! toy. The source said these were “fine,” but such promotions were just that — promotions — and always done on a small scale.
Even small is the theater’s slice of the overall pie: You buy the product from the theatre, who buys it from the producer, who licenses IP from the studio, one person with knowledge of the economy told IndieWire.
Like the flow of movies and ticket sales at the box office, COVID killed the kiosks, although the concept of movie theater retail existed long before COVID.
The idea isn’t new: Nearly 50 years ago, a company called the National Screen Service planned to sell buttons, posters, pins, T-shirts, masks, and even fake vampire teeth and toy photon guns before movies like “Superman.” “Dracula”, “Star Trek” and “Lord of the Rings”.
“Why sell ‘Superman’ T-shirts at Sears or (JC) Penney’s?” a National Screen Service executive told the The New York Times in 1978. “Why not turn the theater into a shop since the people who want to buy the goods are the people who see the film?”
Where that company failed, so did the others. Landmark and the now defunct Arclight also tried gift shops where they sold DVDs, T-shirts, books and other goodies before the shops dwindled to nearly zero. Some still exist in select markets: Alamo Drafthouses sells DVDs (the owner of the chain also owns a DVD company) and other vintage movie merchandise, and offers a pink Barbie lunchbox and thermos with the purchase of a movie ticket” Barbie”.
“Retail doesn’t sell in theaters,” the exhibit executive said, adding that it didn’t work whether you’re in Los Angeles or St. Louis. “We’ve tried everything.”
There may be a way for exhibitors to grow e-commerce retail revenue beyond their own websites.
Movie screen advertising companies NCM and Screenvision, which schedule such ads before trailers for a feature film presentation, are toying with the “purchasable screen” concept. Soon, on-screen ads could feature a scannable QR code where you can purchase a movie-related product and have it shipped right to your door. Mike Rosen, NCM’s chief revenue officer, told IndieWire that it’s an “untapped” opportunity that could conceivably ripen in a delivery system that allows pickup of certain items at the concession stand.
The CEO of Rosen’s main competitor, Screenvision’s John Partilla, is hot on NCM’s tail with a similar plan. “You’ll see more” of those on-screen codes that lead directly to making an online purchase, he said. While Screenvision and NCM wouldn’t get a chunk of any lobby retail unless it’s its proprietary technology that makes point-of-purchase possible, Partilla thinks it’s a good idea.
“You would think that when there are the big Q4 movies like ‘Star Wars’ and stuff like that, they should have some merch out there,” Partilla said. “But we still haven’t gotten theaters to do it. We’ve tried to partner with companies like (online retailer) Fanatics… but we’re not there yet.”
And not having a taste is “OK,” Partilla said. “We are always rooting for cinemas. Anything that helps them increase their income is a good thing in the game.