Sunday, November 26, 2006

Why Blockbuster Advertises Movies in Theaters

A question from Nicole:
I happened to be at Blockbuster the other day renting a movie for the weekend and I noticed that all over the walls and windows of the store were posters advertising the new movie Happy Feet, which came out last weekend. "Only in theaters!" the posters and huge dancing penguin display proclaimed, and I was left wondering why a store which specializes in renting movies to consumers would want to encourage them to visit the movie theaters instead.
So the question is:
Does the revenue that Blockbuster gains from selling advertising space so much greater that it negates the possible loss of business from people who decide to go to the movies instead (because, at least from my personal experience, people tend to do one or the other in a given period of time, and not both)? Or do Blockbuster executives figure that they don't stand to lose much business because it takes too much extra effort to leave Blockbuster and go to the theater instead, and since people are already in the store, they will just rent a movie anyway?
Another possibility that I would throw out there before you guys offer possibilities is that Blockbuster may have deals with movie studios that require them to have advertising for movies in theaters in exchange for deals on DVD releases, etc.

(Source: Nicole O.)

7 comments:

Anonymous said...

Whenever I go into Blockbuster, I always leave with a movie. I have never gone in there and seen an adverstisement and though to myself, "wow, maybel i should leave to go see that movie..." I think it is smart for Blockbuster to advertise like this. Their clientele is people who most often, love movies. I agree with the fact that exucutives are just banking on people being in the store to rent a movie (obviously since they are even in there). Why not advertise and make that ectra money?! and if not anything else, people may be excited by the movie and wish to rent it as soon as it is availabe to rent...the amount of business they are losing is practically nothing.
-Veronica

Anonymous said...

I think that the previous agreement to advertise other movies is the most logical reason why Blockbuster would advertise "only in theater" movies. Also, people going to the movie store are people that obviously didn't make it to the movie theater, so when they see the poster for a movie in theaters they might just think "oh I'll rent that one when it comes out." Or they may think to go to the movies another night, but I think once they have already made the decision to rent a movie that night they are not going to change their mind and go to the theaters. All it may do is put the idea of possibly going to the movies another night to see that the advertised movie.

--Sara Diehl

Anonymous said...

The time for a movie to go from movie theaters to DVD normally takes five to six months. If people see a movie and they like it, they will go to Blockbuster when they see advertisements that it is heading to DVD. So in fact, this advertising that the movies pay for might actually help Blockbuster increase their movie rentals. I agree with Veronica in that when someone goes to Blockbuster, they get what they want and seeing that advertisement will give them an idea of something to do some other time.
-Brian Meier

Anonymous said...

When people go to Blockbuster, they have already made the decision not to go out to a movie, but to stay in and watch one. Seeing that a movie is only in theatres will typically make someone intrigued, and go see the movie another time. This could possibly reduce Blockbusters revenue by a small amount, but the amount of money that they recieve from the theatres for putting their ads on the wall is probably more than any revenue that they lose. It could also help Blockbuster gain revenue because it is advertising a movie that will one day be in their store, and the people that don't like going to theatres will want to rend it later.
-Hope

Anonymous said...

I agree with what all of the others have said. Even though renting a movie from Blockbuster and going to the movies are substitutes, they are not perfect. If you are renting a movie, (I think Sara said something about this), you obviously don’t want to go to the movies. You would rather stay in than go out. I doubt anyone that pulled up to the Blockbuster ready to rent a movie would see the advertisement, get back in the car and go to their nearest theatre. If that movie interests them however, they will remember that when they go back to Blockbuster in 6 months and see it on the shelves. Also, they need some way to grab people's attention. Having big bright posters sent from the producing company probably cost Blockbuster nothing, but draws in people driving down the street. Even though they aren't carrying the movie right now, if makes Blockbuster look hip and up on things. It makes you think that they will probably have the best new releases and therefore a good selection of movies. I think it is definitely worthwhile for Blockbuster to advertise like this.

Anonymous said...

oh yeah that was Natalie...

Anonymous said...

Like everyone else has said on this subject, I think that once a person decides to go to Blockbuster, they are most likely going to rent a movie. Upon deciding what to do for the weekend, people will set their schedules according to what they feel like doing. Renting a movie is quite the opposite of going to a movie in theaters. This goes to show that people that choose to go to Blockbuster aren't going to randomly change their minds and go to a movie theater. It ruins plans. I don't think that Blockbuster is so worried about losing revenue by advertising for movies in theaters.
-Morgan Hale