This is an interesting concept that may mean higher ticket prices for super-hero based blockbuster movies.
Currently, movie cinemas charge the movie goer a flat price point for a movie regardless of whether the film is $100 million dollar blockbuster, a $15 million dollar independent film, a huge financial success or a financial “flop.” Ticket prices my vary by showtime or discounts such as student or senior citizen, but these discounts are not movie specific.
According to Bloomberg, early next year, Regal Cinemas (the nation’s second largest movie theater chain) plans to test a new dynamic demand based pricing system in select markets. The idea is to charge more for popular films and less for unpopular ones. The hope is that this will increase the total number of movie goers (i.e popcorn purchasers)
The recent trend of decreased ticket sales is an industry wide problem over the past few years. There are multiple reasons for this decline, such as the lack of original movies coming out of Hollywood and the increase in home movie services such as Amazon Prime. This demand based pricing system probably won’t be the only new model tried over the next couple years.
What remains to be determined is how Regal Cinemas, the nation’s second largest movie theater chain, will determine what constitutes a “blockbuster” vs. a “flop.” Will the pricing be based simply on the feature film’s anticipated popularity? Will they wait till after opening weekend to evaluate ticket sales and determine whether to increase or decrease prices at that time? Will they rely on Rotten Tomato scores? How about Geeky Daddy Movie Review scores?
Based on simply budget, the recent release Geostorm should have been a “blockbuster” but based on ticket sales, it was surely a “flop”.
Obviously, movie theater profitability is much more dependent on the movie goers purchasing 85 ozs of Coke and a tube of popcorn for $19 than the ticket price itself.
Industry experts are split on whether this new dynamic ticket pricing system will work or not. The main factor is going to be how many potential concession buyers Regal loses because they opt to see the more popular movies (such as Marvel or Star Wars films) at competing theaters. Less butts in the seats mean less chances to sell $8 packs of Rasinets.
An interesting study would be to analyze how much an independent movie goer spends on concessions vs. the loss of the high budget movie goer. Who spends more on snacks?
Obviously not ever Avengers: Infinity War fan is going to go elsewhere to view the movie. Factors like proximity of other theaters, overall movie going experience, theater sound quality and so on play a role in where potential customers will go to view their favorite new movies.
But if enough blockbuster movie goers see the popular films elsewhere and only the less expensive movies at Regal, this new system could have a huge negative impact for the theater chain. Which would probably lead to even more of the annoying in theater advertising.
Side note: As of now, Regal still has no plans to partner with MoviePass, the $10 monthly subscription service for once-a-day movie going.