It has been long since I originally thought of this and thought of a blog.
The idea of this blog came up when the movie Om Shanti Om released and I read about its huge revenue even before it released.
But the first time I heard about refunds in movies was when the movie "hello brother" released. One angry guy outside the theatre said "salman khan ko hamare paise waapas dena chahiye; ghatiya movie..moti heroine". I was in school then and dismissed it as a joke.
After coming to US and seeing returns/refunds accepted for everything including underwears (yeah ..my roomie returned them :D..... hopefully it is not the case with condoms :) ), I thought why is it not the case with movies.
I started thinking of some reasons.
1. I believe returns are encouraged for many goods because, even though one item is returned, something else would be purchased which would replace this item. So in a way the store is still making profits. Also since a store would have many items in slight variations, they can easily stay with this belief and even the customer can choose another one in the same store.
2. Sometimes one or two goods are damaged in a manufacturing line. So if a customer is unlucky to get that one, he can happily replace it with other. This does not cause a great loss to the manufacturer.
Now coming to movies.
As in case 1, I am not sure if some theatre gives you money back, then you would go and see some other movie in the same theatre within few days. Also there would be no om shanti om-2 which probably has slightly different story from the original for people who watched the original and did not like it.
It is possible that if many people did not like the movie say coz it was slow, then the movie could be changed and released with a better screenplay. But then how many of us would go back and buy the ticket to watch that movie again given the torture we would have endured watching version 1.
Though he does not discuss this issue directly, Ram gopal verma in his blog on hit/flop goes a bit around this issue. He suggests that a movie is a individual's way of telling a story. If you do not agree its up to you. Also he talks about the way film industry works. In the sense that director doesnot directly release the movie but the movie is sold to a distributor, then to the theater, so on and so forth. This makes the return policy more complicated :)
Now coming to case 2, one production house can think of doing this is ........ no surprises RGV's factory. They release lotsa movies.. not so high production costs...and i feel some of them suck big time. So if he thinks of refunding customers .... well not a bad idea. :). The only thing is people might buy tickets and just sleep in the movie. Except fro the part when his hot heroines look really hot :) (wazz harm neway money is refunded). This might lead to his refund cost getting higher than production cost.
Standard business principle : If something is selling successfully, keep it going. Don't change it too much as long as people are buying it. This could be seen with some classic designs in clothing. Raulph Lauren stripes, Crocodile Polos etc.
In Films the dude who follows this is............. Shahrukh khan. Doesnot change his same set of constant expressions... ehhhhhhehehehhhhhhhai.. No Doubt people buy it. NO doubt Om Shanti Om's international rights sold for 75 Cr approx (as per reports). No trouble of refunds.
The gentleman who did refund the distributors... RajniKanth. I think he did it for the movie BABA which did not end up making expected collections. Did the distributors refund the movie goers .. hard core fans ? I dont think so.
One not so bad business idea. " The theatre funds the production. Of course the production costs are modest. Anounces a refund policy. Push up the rates of pop corn and soft drinks. People might watch the movie since anyway the tickets can be returned. Mean while the theater could make some profits selling pop corn and soft drinks to those dudes. :)