Movie Ticket Pricing

Most movie theater chains around the country have adopted a “discount Tuesday” price drop in order to get more butts in the seats on a day that traditionally isn’t very popular with moviegoers. The result has seen an uptick in movie ticket admissions on Tuesdays, and it’s even been quite beneficial for mid-tier films that audiences don’t deem as must-see titles on opening weekend. And the success of discount Tuesdays has movie theaters considering both variable and dynamic pricing models that would change depending on what movies you’re seeing and when.

The Hollywood Reporter has word on movie theaters rethinking their pricing model as they struggle to keep moviegoers interested in the theatrical experience. Box office numbers are down this summer, especially following the collapse of MoviePass (which reinvigorated moviegoing last summer). Combine that with the ever-growing library of content that viewers have at their disposal from the comfort of their living room thanks to the likes of Netflix, Hulu and more, patrons seem to have once again fallen away from seeing movies in theaters.

Chris Aronson, a former executive at 20th Century Fox, believes a ticket to a movie like their own action comedy Stuber should not be the same price as a blockbuster event movie like Avengers: Endgame. But there’s inherent controversy that comes with a statement like that, as analyst Eric Handler of MKM Partners points out:

“When you charge a lower price, right there you are saying the movie isn’t as good as another film. You are saying you have to discount it in order for people to show up. I don’t think that is something you will see anytime soon.”

That’s a fair point. When you look at the pricing model for products of varying quality, the more expensive options is typically of a higher quality. Even though that may not always actually be the case, moviegoers will see it as a pricing tier of which movies are really worth their money. But at the same time, they’re already making that judgment anyway by holding off to see movies until discount Tuesday, so is there really any harm to the market if variable pricing was introduced?

Funnily enough, this was something that Steven Spielberg and George Lucas predicted back in 2013. Speaking at a University of Southern California event at the time, Spielberg first predicted an implosion of the film industry where “three or four or maybe even a half-dozen megabudget movies are going to go crashing into the ground” and shift the paradigm of film distribution. While that has happened a few times over the years, this summer in particular feels like it’s measuring up the most to that prediction. But it’s what Spielberg and Lucas said about the theatrical experience that applies here:

Spielberg: “You’re gonna have to pay $25 for the next Iron Man, you’re probably only going to have to pay $7 to see Lincoln.”

Lucas: “I think eventually the Lincolns will go away and they’re going to be on television.”

Spielberg: “As mine almost was. This close — ask HBO — this close.”

Lucas: “We’re talking Lincoln and Red Tails — we barely got them into theaters. You’re talking about Steven Spielberg and George Lucas can’t get their movie into a theater.”

Spielberg: “I got more people into Lincoln than you got into Red Tails.”

Lucas: “The pathway to get into theaters is really getting smaller and smaller.”

And here we are six years later, movies that don’t seem strong enough to risk the cost of theatrical distribution end up going to Netflix. And soon enough, streaming services like Disney+ and HBO Max will soon be adding even more movies to their line-ups that will get released straight to their own library.

But of paying less for movies that don’t have quite as high of a profile isn’t in our future, it’s perhaps more likely that dynamic pricing will be. In the spirit of discount Tuesdays, movie theaters are considering a ticket price based on the day of the week and the showtime. More in-demand showtimes, such as the evening shows on a Friday or Saturday, would cost more than the evening show on a Wednesday night. It’s something European theater chains have done for a long time, and it has served other industries like hotels and airlines well, but would it work for movie tickets? There hasn’t been a sizeable enough of an attempt to know for sure.

Right now, movie theaters are still playing out their own subscription ticket models in the wake of the success of MoviePass. the most successful of which seems to be AMC Theatres, which allows customers to pay between $20 and $24 a month (depending on their market) in order to see three movies each week. Regal is getting ready to launch their own movie ticket subscription, and the niche theater chain Alamo Drafthouse will have something along the lines of their own MoviePass as well.

No matter how the movie theater industry continues, there are still big changes that need to be made if they want to stay afloat. Audience interest in what Hollywood is offering seems to be waning, and while that could easily be because of a lack of content piquing their interest, it also seems to be because movie theaters are charging way too much for tickets to movies that they’re not entirely sure of. Perhaps we’ll just start seeing more movies coming to streaming instead of theaters and only the big blockbuster movies will be the kind of event programming that gets audiences back to the big screen. We certainly hope that’s not the case, but that seems to be where things are headed.

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