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Brand Incongruity: The Movies, The Stars, and The Bucks

Movie theater attendance has fallen for three years in a row. According to the Motion Picture Association, domestic theater attendance fell 9% last year to 1.4 billion tickets sold, which is down from 1.64 billion sold in 2002. That situation is not quite as blissful as the “sound of music” to the ears of movie execs.

So what do you do if you’re a movie exec? How do you rebuild the buzz?

Well, coffee certainly provides a buzz, and Starbucks has “star” and “bucks” in its name which are two things a movie exec has to like. With a grande cappuccino priced at about $3.46 the people who frequent Starbucks must have discretionary cash to burn. And since people need discretionary cash to see movies which are priced at $10 a pop (when DVDs can be rented for $3) that makes Starbucks customers quite attractive to someone who sells movies.

Lions Gate Entertainment, a smaller Hollywood studio, inked a deal with Starbucks where the coffee behemoth will be marketing its upcoming film "Akeelah and the Bee"

How the Coffee Chain Will Promote Films
 Offer movie trivia on a chalk board
 Feature words from the film inside the pastry display case
 Sell DVDs
 Ads on Coffee-Cup Sleeves
 Show trailers over its WIFI network

Starbucks needs to be careful in choosing what movies to promote. "Akeelah and the Bee" is about a child with a passion for spelling bees. This seems innocuous enough, but Lions Gate Entertainment also makes slasher flicks like “Saw”. When you create an alliance you are effectively co-branding so if people associate Lions Gate with slasher films, and see Starbucks is promoting films from that studio it could impact the coffee giant’s brand negatively, especially since Starbucks takes great care to promote a social mission in its charter. Brand incongruity can be a brand killer.

As a mere promoter Starbucks might not have an impact on the overall movie going audience. Nielsen Analytics found that high ticket prices and bad movies are the top reasons people are going to fewer films. And 36% are avoiding the theaters because of high concession prices. Concessions are the lifeblood of theaters as they only keep half the box-office receipts. The rest of their profits come from the concessions, where profit margins can top 85%. However, it seems Starbucks has high hopes to improve the quality of the movies, as it has indicated it might tackle movie production. And since its customers are already used to paying high fees for convenient food the movie theater owners might find the Starbucks crowd a profitable one.

Sources:
- Horn, John, “Now Showing: Declining Sales at Theater Snack Bars,” Los Angeles Times, March 16, 2006

- Gray, Steven and Kate Kelly “Starbucks Plans to Make Debut in Movie Business”, Wall Street Journal, 12 January 2006

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