Movie tickets: Charge more for hits, less for flops, analyst urges

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It’s time for studios and the cinema industry to stop charging the same price to see any movie any day of the week, a media industry analyst said in a strongly worded research note Friday.

“Movie exhibitors are operating with the largest amount of excess capacity of any industry we could find in the free world,” wrote Todd Juenger, a senior analyst at Bernstein Research. Nearly 93% of theater seats go unfilled, he said, including 99% between Monday and Thursday.

Over the years, many industry players and observers have called for “variable pricing” for movies. The basic idea is that the more popular films should cost more to see, while those that don’t pack theaters would get a discount. But theater owners and studios have resisted, in large part because they are concerned about the negative perceptions that would come from some new offerings costing less to see than others.

Currently, the only variable pricing at cinemas typically occurs for matinees and evening shows, as well as children or senior citizens’ tickets versus adults. On occasion, exhibitors quietly and without fanfare offer discounts for showings during the week, but virtually never as a matter of an advertised policy.

Juenger noted that everything from airplane tickets to hotel rooms and even DVDs at Wal-Mart have some degree of variable pricing. “The only industry we could think of that is remotely similar to movies in terms of flat pricing with big spikes in utilization is fast-food,” he observed.

The analyst claimed that with higher pricing “The Hunger Games” could have grossed $250 million worldwide on its opening weekend, compared withthe $219 million that the Lionsgate release actually collected. “I also submit that [the costly flop] ‘John Carter’ could have eked out more total revenue, especially post-opening weekend, by lowering prices,” he added.

Of course, with domestic box office receipts up 20% so far this year, providing a bright spot at a time when DVD revenue continues to fall, it’s doubtful that Hollywood is looking to shake things up in the near term.

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-- Ben Fritz