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Patrick Goldstein and James Rainey
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Hollywood ticket prices raised again: Is it time for moviegoers to say 'Hell no!'?

May 21, 2010 |  4:22 pm

3D_movies If you go to the movies, you've probably noticed that movie ticket prices have been skyrocketing higher than the stock market during a bull run. And now, according to this new story from my colleague Richard Verrier, ticket prices are climbing even higher. Even though ticket prices in the first quarter of 2010 were up 8% from the same period last year--the biggest yearly increase since theater owners began tracking ticket data in 2001--they've already taken another leap upward.

Industry analyst Richard Greenfield found that if you go to see "Shrek Forever After" in 3-D at an AMC Imax theater in New York this weekend, you'd be paying an astounding $20 for an adult ticket, up from $16.50 in late March. (It now turns out that the ticket prices are closer to $19, though it's still unclear whether that was because of an error on Greenfield's part or because AMC quickly switched the prices after seeing how badly the price hike was playing with a leading industry analyst.) At any rate, here's what Greenfield had to say: "With the state of the economy remaining questionable, we worry pricing is simply moving up too quickly, especially kids' pricing, which is increasing at a faster rate than that of adult tickets." 

The latest price increases come less than eight weeks after theater owners instituted some of the steepest hikes in years--some of them upward of 25%--beginning with the late March debut of  DreamWorks Animation's "How to Train Your Dragon." The latest flurry of ticket price hikes, of course, comes with the release of DreamWorks' latest "Shrek" sequel, which seems to have a certain kind of poetic justice to it, since DreamWorks Animation czar Jeffrey Katzenberg has long been the most vocal proponent for charging higher prices for 3-D movies, perhaps because his business model revolves around the increased profit margins from 3-D releases.

It's no secret that increased 3-D ticket prices were largely responsible for the industry's 10% jump in domestic box office revenues last year. But projections for this year's numbers aren't as high, with analysts expecting attendance to actually dip a bit, which would translate into about a 6% revenue hike.

If I were a theater owner, I would take a close look at Major League Baseball to see how easy it is to kill the golden goose. 3-D movies have an undeniably attractive novelty factor, not unlike what happens in a city where the team opens a sparkling new high-tech, luxury-facility-laden new baseball stadium. The new ballpark is almost invariably accompanied by higher ticket prices. Attendance immediately skyrockets, boosted by the wow factor from the new ballpark's fancy amenities. It improves the owner's profit margins, but usually only for a brief period of time. If the team starts losing, fans start staying away in droves, complaining not only about the team's awful pitching staff but also about its steep ticket prices.

The same thing could happen to theater owners if moviegoers get stuck with a few lousy summer movies in a row. Bad buzz gets around faster today than ever before, thanks to texting and Twitter, but it really gets around fast if you take a family of four to see a summer movie and after paying more than $100 for tickets, parking and popcorn, you end up having to sit through a stinker. You'd think that theater owners would remember that once people get out of the habit of going to the movies, writing it off as an overpriced experience, it's harder than ever to get them to come back.


Photo: Journalists watching a 3-D trailer for the upcoming film "Empires of the Deep" in Beijing last month. Credit: Gemunu Amarasinghe / Associated Press


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