Big screen, small prices

It turns out Spaniards do like to watch movies on the big screen. What they don't seem to like is the normal price - which oscillates between 5.50 and 12 euros, depending on the theater, movie and format in question. To put it another way: audiences are still willing to go to the movies as long as the price is right.

That is the conclusion that can be taken from the startling attendance figures for the fifth edition of the Fiesta del Cine, which took place on Monday, Tuesday and Wednesday of this week. Organizers of the promotional event received a total of two million applications from people eager to purchase cut-rate 2.90-euro cinema tickets to see a film of their choosing. The unexpected avalanche of moviegoers who descended upon 3,000 of Spain's theaters has reopened the debate over the price of film tickets.

The massive enthusiasm was evident in the long lines that formed outside cinemas across the country on Monday and Tuesday. All the prior estimates for this year's Fiesta del Cine came up short. The webpage (www.fiestadelcine.com) where you had to apply for accreditation to access the prices was so oversubscribed that it kept crashing. On Monday alone, 347,000 cinemagoers showed up, a 550-percent increase on Monday of last week, according to data from Rentrak, the box-office measurement firm.

What these massive lines have done is to stir up the debate that has been heard on the street for many months in an industry without direction and on the edge of the abyss. Why have people turned their backs on movie theaters? What role has uncontrolled piracy in the country played? Are ticket prices one of the causes of the downturn in film-going? According to figures from the Culture Ministry, the number of moviegoers declined 19 percent from 2007 — when 116.9 million tickets were bought — to 2012, when just 94.29 million tickets were sold. And the figure continues to drop. In the first quarter of this year the decline compared with the same period in 2012 was 18.6 percent.

With the current 21-percent VAT rate, any price drop is unfeasible"

The reaction to the Fiesta del Cine, which is organized by the producers, exhibitors and distributors associations, with the support of the government's ICAA film institute, seems to make it clear that the reduction in ticket prices has something — or a lot — to do with things. The organizations involved have breathed a sigh of relief, saying that this year's event — in which 324 movie theaters participated — demonstrates that people still like watching movies on the big screen and that if they offer good prices, decent films and a good publicity campaign - the social networks played a fundamental role this year - things can change.

So what will happen now? Is this not all just a one-off? One man who sees things clearly is Enrique González Macho, president of Spain's Film Academy and owner of the Renoir-Princesa movie theaters. "What we are seeing is an exceptional event that cannot be translated to the day-to-day because it is not profitable," he explains.

"The most important thing of all is the demonstration that people want to see films in the cinema and it has to carry us toward a profound reflection on the commercial side of this industry," he continues. "It's obvious that Monday's massive attendance levels cannot be maintained, but we ought to look for a balance between attendance and prices to reach profitability." González Macho adds that he is in favor of a general reduction in ticket prices to adjust to the tough economic times in which we are living, but "with things as they are now, with the current 21 percent VAT rate, any drop is unfeasible."

That value-added tax rate on tickets — the highest in Europe — is taking the industry to the edge of the precipice. Exhibitors, while acknowledging that the view on the street is that cinema is expensive, point out that from the price of a ticket you have to take off almost 25 percent in VAT and other taxes; of the remaining 75 percent, around 50 percent goes to the distributors — "a percentage five points higher than the European average," notes Juan Ramón Gómez Favra, president of the FECE federation of cinemas in Spain.

Exhibitors remain extremely cautious about the possibility of reducing ticket prices, knowing that any collective deal goes against competition laws and that commercial policy is exclusive to each chain.

Xosé Portela, president of the producers' association, prefers to throw out this question: "If tickets were cheaper, how much would attendance go up? It's not known; more research would have to be done. The Fiesta del Cine is thought of more as promotion rather than a business. If it were repeated every week, it wouldn't be the same. It has served to show that people want to go to the cinema, but we have to look for a balance, taking everything into consideration. Spanish producers do not have the same interests as the Hollywood distributors but we have to debate amongst ourselves and think about how to get out of this chaotic situation."

For now, it is the street that has provoked the debate. But will anyone pick the gauntlet?