Economics, Marketing, Uncategorized

The Midnight Implosion

What do businesses do when their environment changes rapidly due to unforeseen events? They adapt, otherwise they risk failure and ultimately an early exit from the market. This key business principle is exactly what has recently happened in the movie industry with midnight showings.

Can you name 7 of the 10 ¬†highest, in terms of revenue, after midnight (friday morning of release) showings? Here’s a hint, they either start with “Twilight” or “Harry.” Interesting, is it not? Why have these moves been such midnight success? Especially when historically midnight films were always cult films (think “Rocky Horror” or “Pink Flamingos”). According to; the last installment of “Harry Potter” made 43.5 million at these after midnight screenings. The reason? A young, eager, pre-built audience (thanks to the books) that want to see their childhood come to life as soon as they could.

The Industry loved this, and moved to make more and more of these books series and with the costs to do after midnight showings on the decline, thanks to advancements in digital technology, mainstream movies found their home around midnight. Box office numbers became inflated and old records didn’t stand a chance.

Then something happened…unforeseen…horrible…an enigma.

To pin point the exact cause of this enigma is difficult. It is more a rapid change in the environment that does not have any one cause, but the result was horrifying and companies had to adapt. It was the fall of mainstream midnight showings.

Put your self in a movie executives shoes. All of sudden you see your revenues and grosses falling out of no where. So, try not to panic and find the problem and fix it fast, otherwise overall profitability could tank and you could be out of a job.

Lets think how this happened and why the big movie companies had to react. This younger crowd moved away from midnight screenings, as a result we started to see 10 p.m. screenings or even today’s 7 p.m. screenings the day before the release. I enjoy it, it means I can go see a new film and get home in time to go to the bars or even watch some late night TV. But what does this mean? Well in the short term, as a result of this shift, it allows companies to make more money on opening weekends, box office sales and hype can increase, along with revenue for the theater owners.

Sounds like everyone won with this shift. Though we are no closer to understanding why this happened.

Well here’s a hypothesis. There were many factors right around the time the switch happened. The shooting in Aurora, Colo. certainly was a factor as people started to not want to be at midnight screenings for they had that fear now in the back of their minds. The ease in showing movies with digital projectors, the want to increase opening weekend sales and milk blockbusters, falling movie sales thanks to quicker to DVD releases, and a reaction to public demand are all factors that can be argued for this shift.

No matter what caused it, this is a classic example of a shift in demand, followed by a shift in supply to meet that demand. Which paints a picture that while the mainstream midnight screenings are phasing out, we are seeing the next stage for releases, pre-midnight screenings.

So it seems the environment of midnight movies is something in which cult films seem to be the only films that can stand the test of time at midnight.


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