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Would a different ticket-pricing structure bring more people to movie theaters?

March 21, 2011 |  7:00 am

Theat

The box office again found itself in a lull this weekend, dropping 9% from the comparable weekend last year despite a diverse group of new releases. It provided the latest sign that we may be in for a long-term slump instead of just a cyclical dip. This was, after all, the fourth straight weekend that box-office receipts dropped compared with the previous year. And things weren't much better before that: Through Presidents Weekend, box-office dollars were down 24% compared with 2010.

It would seem like a sharp wake-up call after the outsized success of movies such as "The King's Speech," "Black Swan" and "The Fighter" at the end of last year. But for all the successes, film attendance in 2010 endured its largest drop since 2005. The declines in moviegoing, apparently, won't be reversed by a surge in quality.

On Twitter, the suggestions have been flying for some time on what, in fact, will reverse it: more in-theater amenities, more 3-D releases, fewer 3-D releases, across-the-board price reductions (unlikely to happen), assorted other recommendations.  But the sales slump also calls to mind another idea that has been alternately floated and dismissed over the years: variable pricing.

A jargony term for a straightforward concept, variable pricing basically means that ticket prices  will rise or falling depending on a slew of factors, most notably how much people want those tickets in the first place.

Many theater chains, of course, already practice a form of it with their afternoon matinees. The concept, which economists have been examining for a while now, would extend the variability to other factors: where assigned seats are located, how close to the showtime the tickets are bought and, most critically, how in demand the tickets are. Basically, it's the airline and hotel model for movie tickets.

How would it work? Essentially, prices for all movies would start at the same baseline as they do now ($7 to $12, or even a little lower, to give filmgoers a break). But as supply and demand shift before and during a film's release, the prices would fluctuate accordingly.

For instance, this weekend, as demand for "Limitless" increased, the amount that it cost to see the film would tick up. Prices for "The Lincoln Lawyer" and "Paul," less in demand, would slide down.

As more people took advantage of the lower prices, prices for it would start to climb back up. At the same time, as the higher prices deterred some "Limitless" patrons, the price for that film would start to drop. If the system were set up right, you should, many economists believe, see more revenue on "Limitless" and more tickets sold on "The Lincoln Lawyer." 

It's a system that attempts to solve the dual but disparate problems that currently afflict moviegoing: Film fans say ticket prices are too high, and studios and theaters say they're not making enough money.

Of course, "Limitless" is only a marginal example of an in-demand movie; the price and revenue uptick would apply most heavily to highly anticipated franchises, the "Twilights" and "Harry Potters" of the world. And therein lies perhaps the biggest obstacle to this sort of flexibility. Studios, which wield influence over but cannot  legally dictate ticket prices, have historically opposed variable pricing; they fear it will dissuade filmgoers from coming to see their biggest movies. Do you want to be the company bringing out "The Dark Knight Rises" and explaining to fans that the movie they've been waiting years to see will now cost them $20 or $30?

Yet most studios don't just peddle big releases but also mid-range and smaller movies (relatively speaking, anyway), and this system should help those films. And even if attendance drops for event films, there's no reason the system couldn't be calibrated so those losses were offset by revenues from the higher prices.

More important for all of us in the general public, variable pricing would offer an incentive to buy tickets early and with some resourcefulness, the way frequent travelers seek out the best flight deals. It would reward planning and enthusiasm -- that is, it would reward the hard-core filmgoers, which isn't at all a bad thing. Sure, none of us want to pay more for movie tickets. But if you're a big Christopher Nolan fan and bought tickets right out of the gate, it would cost you a lot less than if you sat and dithered, a proposition that has a kind of pristine fairness to it.

And for those of us who are a little more lazy or indecisive, variable pricing would still carry a benefit: tickets for non-event releases would cost less than they do now. Since that encompasses a fairly large amount of movies on offer, it means that for many trips to the theater we'd experience lower prices.

There's a potential democratizing effect to this, too. People say they'd like to support smaller movies that aren't big blockbusters. Variable pricing  builds that support into the system -- as prices drop, audiences would be lured to a movie they wouldn't have gone to otherwise. (Lionsgate tried to induce this itself with Groupon discounts for "The Lincoln Lawyer" this weekend.)

Every ticket-pricing system has its flaws and critics, and the logistics of implementing a system like this wouldn't be simple. But with moviegoing sometimes seeming like it could be heading for rigor mortis, a little flexibility might be a welcome thing.

-- Steven Zeitchik
twitter.com/ZeitchikLAT

RELATED:

Bradley Cooper's "Limitless" breaks out of top 5 horse race at box office

Groupon sells 190,000 tickets to "The Lincoln Lawyer"

Box-office receipts are down in 2011

Photo: The Mann Festival in Westwood after it closed its doors in 2009. Credit: Jay L. Clendenin / Los Angeles Times

 


 
Comments () | Archives (42)

The comments to this entry are closed.

I've been in theatrical exhibition since 1964 and have seen many changes from single screen operations to today's mega-theatres. The difference then to now is quite simple. Movies then were usually based on great literature, oh yeah, there was the American International model but everyone knew what they were getting with that. Theatre exhibitors placed a priority on quality of presentation. You better be good in the booth or you were working the sub-runs. Now you have untrained teenagers who wouldn't know showmanship if it hit them in the face. Why? Today's exhibitors want you to get it on the screen and then get down stairs so you can help in the concession stand. That's why on a recent trip to see "King's Speech" at a Regal Cinema, I had to leave my seat 3 times to tell them their wonderful digital presentation was wildly out of focus. And when I looked up in the booth to see who trying to adjust the focus, it was the same young lady who had sold me a Diet Coke before we entered the theatre! They wound up having to cancel the showing and give everyone their money back because they had no one on staff who understood the projectors!
The answer is simple, train your staffs to make sure the presentation is first class all the way and lower your box office price. How can a first run theatre (independent) in Banning only charge $5 per person as their highest price yet the "big boys" need top dollar? Simple greed.

I don't know Hollywood...how about MAKING BETTER MOVIES!!!!!

we don't want to be lectured with ANY agendas, we don't care about hipsters with peter-pan syndromes, we don't care if you blow stuff up real good

we care about GOOD MOVIES!!!

who greenlights these pieces of excrement? some of these so-called "movies" I wouldn't pay a dollar for on redbox

oh yeah and produce BETTER TALENT

other than that you can charge us $20 a ticket you can charge us $8 a ticket---we won't go unless the MOVIES ARE GOOD

re-making Arthur where the lead isn't a drunk! HUH?? you Hollywood pinheads are really STUPID!

I haven't paid to see a movie in a movie theater since 2005. Judging by the lack of intelligent movies for adults it doesn't appear that I've missed anything.

I don't know this idea seems to be to great if you have a limited budget for going to the movies.

I know most families will probably look really hard at going to see that movie that everyone wants to see if they find out that the price is going up.

Personally the prices they want for 3d and imax is so much as it is now.

Lower all ticket prices Mon-Thurs night and leave them high on the weekend. It's worked in my hometown. It eliminate the lines on cheap Tuesday, and now those of us who are 'cheap' have more options.

The 'kids' who want to go to the crowded weekend movies, pay more, because for them, seeing the movie is less important then being out on the weekend.

If you try some variable pricing scheme, you will leave many feeling like they've been ripped off. And the public doesn't need to feel any more screwed then they do already.

I do not believe the movies will ever come back. We have movie theaters in our homes and we do not have to deal with people who are disrespectful.

If you want to save the movies make movies that Americans want to see. Not the Commie Chinese, and have people in the theaters who are there to raise the standards of the people who go to the movies. Have a curtain go up and down, have a properly attired usher give a short speech asking the patrons to respect one anothers desire to enjoy the movie, etc.

I disagree, these movies don't look interesting at all , and that's why nobody is going to the theaters to watch them.

Part of this issue is the economy, but one can't dismiss that moviegoers also feel the contempt that Hollywood has for middle America and many of us don't like to reward such attitudes.

Who came up with this disastrous ticket idea. You are looking for some big complaints from movie goers especially if you paid high ticket prices and the movie sucked. Refunds anyone.

Variable pricing would simply make everyone wait until the movie is available on DVD. Prices are too high now, and movies are too awful to waste money.

The solution is simple: making better movies. That people actually want to see.

I don't go to movies anymore. The reason is political. The people in Hollywood hate me - a conservative. Then they want my money. Not going to happen.

I am a big Christopher Nolan fan. Really thanks for the advice.

I can't remember the last time I went to a movie... and I'm in my early twenties. It's just not worth it anymore. Most of the films are terrible. They are all either remakes, sequels, propaganda laden material, or crap comic book movies and other content catering to adolescents and/or nerds. Where are the great gangster films, funny comedies, or historical epics (and no, I'm not talking about Clash of the Titans type crap, I mean real award worthy ones) like in the nineties? Even the Oscar winning films are awful compared to those of years past. Thus, ticket prices are just not worth the price of admission, and if you want to buy food at the concession stand, you're looking at another $5 for a small popcorn. As for 3d movies... please, just another way to dupe the average consumer.

I don't know if the people in Hollywierd are just plain stupid or what. They make movies that insult what the majority of Americans believe in such as attacking religion patriotism etc. They make endless movies that insult and attack our troops who most Americans admire. They make movies that are just plain disgusting as far as sex etc. and they wonder why nobody goes to them. They are trying to blame anything but their own stupid decisions. They are like the Main Stream Press so assured of their superiority they can't admit to ever being wrong. The Press the Hollywierd crowd and Politicians three groups totally out of touch with reality.

How about this? Hey Hollywood stop making political movies that over half of the country doesn't agree with? I've not been to the theatre in years simply because I cannot stand all you smug liberal actors/producers/directors and won't put one thin dime into your pockets. The same goes for many of my family and friends. As far as I'm concerned you can pound sand!

I know what turns me off. Its the feminist fiction you see in so many movies and TV shows. Skiny little women beating up 240 lb men with ease. Tall beautiful models flying fighter jets. Police departments being run by women. They are trying to propagandize people into believing that can happen. Leftist propaganda trying to remake society, just like the communists.

It's not the price per-say it's the product that is the problem and creative price schemes won't change that.

Most of what Hollywood produces now runs from overt hostile to thinly-veiled agit-prop starring repugnant personalities who spend their free time spouting their anti-American, "progressive" hate speech and people don't want to spend money on them.

Movie stars used to be attractive, outwardly humble people who the average person wanted to relate to and personalities that could draw people into a theater to be entertained by something that wouldn't insult them. Today they're overpaid caustic personalities who spew invective at working people and tenigrate anything and everything associated with middle America, are respected only by their peers who drive people away.

I'm like everyone I know and have a long and growing list of people, Matt Damon, Olivia Wilde, Scarlett Johansson, Rickey Gervais, Sean Penn, Alec Baldwin, Robert De Nerio, Tommy Lee Jones, just to name a few of mine, that will prevent me from ever paying to see a film if they are associated with it in any way... the studios can charge whatever they want and I'll never turn over one cent to see these kook left hate mongers in one of their pro-Marxist vehicles.

Want people to return to the theater, start making entertainment with palatable personalities again and put the political agenda behind you ... that's the only thing that will ever make a difference.

 
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