Cinemark Is Testing A Variable Pricing Model For Movie Tickets

It's become crystal clear that the state of moviegoing must adapt or die in the pandemic era. Streaming became the dominant species in the movie business and theaters are looking for ways to evolve so that the box office can continue to be a viable part of the industry moving forward. It turns out that theater chain Cinemark has a pretty interesting potential piece of the puzzle on deck, and they are testing out a variable pricing model for movie tickets.

Cinemark recently shared its quarterly earnings for the end of 2021 and, for the first time since the pandemic began, turned a profit. According to The Hollywood Reporter, during the earnings call CFO Melissa Thomas made an interesting reveal in explaining that the chain is now using data and analytics to test a new way of handling ticket prices. Rather than do an increase across the board, the idea is to use data to introduce flexible pricing depending on factors such as demand and time of day. Here's what Thomas had to say:

"We're testing and learning. For example, we're in the midst of a series of tests to better understand how elasticities have evolved during the pandemic, to further optimize our base pricing levels going forward. That could mean increases or decreases in pricing, depending upon the theater market, the time of day and week and various other factors."

In essence, this means you could pay one price to go see a smaller indie movie on a Wednesday afternoon, such as "Sundown," whereas seeing the big new popular blockbuster on a Friday night would likely cost more. It's easy to see how this could be both frustrating and/or handy, depending on how it's implemented.

A necessary evil

The fact of the matter is this: very few movies are bankable at the box office right now, with "Spider-Man: No Way Home" serving as the extreme exception, not the rule. And if your movie does not have a Marvel titled card in front of it? It's extra shaky. The point is, theaters need to do something to sustain revenue and adjust to moviegoer habits. Variable pricing is a unique way to approach it rather than to say "everything always costs more money now."

What this could mean, in practice, is that a primetime screening of "The Batman" would cost a bit more money. But it could also mean that a showing for a smaller movie, like an Oscar nominee such as "Belfast" for example, could benefit from a reduced price in comparison. This could, in turn, make smaller movies more attractive to some cost-conscious moviegoers. Whether or not it actually pans out that way remains to be seen, but a blanket price increase would probably do more to hurt smaller, non-franchise movies.

This is surely the lesser of two evils and I, for one, as someone who deeply values the theatrical experience, am on board for anything that might keep that train on the tracks. We'll have to see how it goes when/if this is implemented at all Cinemark locations with a more transparent policy, and whether or not other chains such as AMC follow suit.