Sunday, March 30, 2003

Ads in Movies

Tibor R. Machan

During the last few years I’ve gone to rather few movie theaters to see a movie but watched, instead, the offerings of network and cable television when I had in mind to relax a bit, to escape. Certainly, it’s cost-effective to do this and, in any case, I can wait. But lately a friend and I have returned to the cinema. This reminded me why I have decided to stay away for so long and why I grew reluctant to see movies in theaters.
There are now five or six advertisements before the previews begin, so if you get there on time; basically it is like watching network TV.
Only network TV costs nothing. You “pay” by watching the ads, although of course in one’s home one can get other things done during commercials. I recall back in 1969, when I visited London, I watched a bit of the BBC and noticed why I didn’t mind commercials so much—they made time for a visit to well, you know what; or to do a bit of cleaning in the kitchen or to take out the trash. Sitting and watching uninterrupted “commercial free” TV for three hours wasn’t so good for my restless spirit.
Now there is TiVo that allows one to stop programs, to backtrack if one has missed a word or two of the dialogue and to fast-forward if one is bored with some section of a program.
So with commercials blasting at one in theaters, it is no wonder that I hardly every see but 20% of them filled with customers. If it were not for special reasons, I would never go—who wants to pay serious bucks for a movie only to have ads blaring from the screen. And these are huge ads and escaping them means returning to the lobby.
I have friends among academic economists who, I am sure, will inform me that, “This must be the most efficient way to manage movie theaters because, well, that is how they are being managed.” (The Nobel Laureate economist, the late George Stigler, used to admit that this view was the result of the widespread belief among economists that everything that people do is indeed the most efficient way of doing it; so, we do live in the best of all possible worlds, after all, just as the German philosopher G. W. Leibniz had believed back in the 17th century!)
Actually, this idea of efficiency is what we call tautological—it is a redundancy because nothing could be other than efficient under it. If people are lazy, then laziness is important to them; if they waste time, ditto for that; and if they commit crimes well, then that’s what’s efficient for them. Nothing happens unless it is efficient—or so my economist friends will contend.
Not really. People forget to think things through, do not pay attention and miss some much better, even more efficient ways of doing things. And I suspect that’s what is going on here, with movie theaters trying the double jeopardy option—get people to pay and also make them pay with having to watch ads. Maybe it worked for them for a while but now it looks to me that people are getting wise to the double dipping strategy and are refusing to play along.
I suspect if they dropped those ads, they would get more loyalty from their costumers. But then I haven’t done a formal study, so perhaps I am quite wrong here. Still, the notion is plausible enough and perhaps some movie managers will consider it and then we may gradually get rid of this annoying feature of going out and seeing a flick now and then, namely, being hit up with advertisements despite having actually paid for seeing the movie. Just perhaps!

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