Pricing Cinema

What It Looks Like From Outside The Biz

Here's an article that shares some insight from what the non-film making portion of the population feels about the pricing of cinema tickets in Australia.

Imagine what the cinema industry could do if it matched innovation within the core product - the movie - with a more innovative in-cinema experience. Yes, big cinema chains are adding “extreme” screens, “gold-class sections”, specialist 3D cinemas and better sound and seating.

They deserve kudos for their technical innovations. But there is more to the customer experience than that. Price and service, two areas cinemas are weak on in my view, play such a big part.

I reckon cinemas could do so much more on pricing innovation, an area many entrepreneurs overlook.

Of course there are “cheap Tuesdays” but ticket prices are generally the same. So cinemas are mostly empty during the early part of the day, and crowded at nights, especially weekends.

Why not offer more innovative pricing structures that encourage people to spread their attendance.

What about $10 an adult ticket before 5pm, and $17 after 5pm? Would that get you to movies you otherwise would have missed? Would it make cinema chains more money overall by helping them sell more fat-margin candy and drinks, the real driver of cinema profits?

And there's the crux of the biscuit right there. You understand that exhibitors want to get as much on the premium product and the freshest product, but at the same time not all products are created equal, not all seats are created equal, not all times are created equal.

If the common punter has noted this:

Cinema executives will probably cringe at the thought, yet a strategy of just lifting ticket and food prices each year - without a comparable lift in value - is not great either.

...then the game is up. People are (and have) adjusted their spending strategy accordingly.

Which also goes to problems the film industry is facing globally. The ticket prices go up to pay larger and larger fees for  stars. people like stars because it telescopes a whole pile of narrative issues, namely, figuring out who the story is about. It helps to be able to say, "Oh, that's Brad Pitt/Tom Cruise/Matt Damon, the leading man. It must be about his character."

Which is all part of the audience's willful suspension of disbelief. This phenomenon in turn feeds the need to procure an A-List star for your movie because the paying audience will on the whole prefer a star-driven vehicle over one that is an ensemble piece or a foreign film.

And for some time now the cost of the A-List talent has been soaring, and this has been passed directly on to ticket prices without much debate, and it has been evenly distributed across all movies, regardless of budgets and costs. So, an Australian film with a $5 million budget equally charges a $17.00 per ticket that an American film with a $250 million budget gets. In a sense, the Australian film is forced to subsidise the excesses of Hollywood movie's budget as well as the Exhibitor's real estate value - and nobody in the industry is talking about this!