Price competition leads, invariably, to less, not more.
Whatever AMC and Regal are trying with The Batman will not change the market overall. I can see their mindset. We have already seen in the wake of COVID that people who are going to the movies are willing to pay more to see movies on premium screens rather than basic digital screens. And I believe that we will see a wave of conversions to premium screens in traditional brick & mortar spaces in the next year or three.
That said, playing pricing games is dangerous to the market. It is a big part of what brought DVD down after just a few years.
It’s a budding issue in streaming as well. Too many streamers with too many differing pricing ideas that change too often.
People will pay. Piracy is a real thing, but the average person who lives and works as an adult in the economy will pay for content. They don’t want to feel ripped off (see: record industry) and they don’t want to have to be watching their back every time they sign up for something (see: subscription biz, esp for legacy print media).
But one of the things that has worked for theatrical for many decades is price consistency from theater to theater.
Obviously, there are exceptions. Matinees have been around forever. I know AMC, while not running movies as early as they used to, is discounting daytime weekday as their new norm. Premium pricing for THX was once a thing and it still is for IMAX, Dolby, 4DX, and other premium options. And of course, we all remember when 3D was the unstoppable force… which eventually met public sentiment, the unmovable object. 3D is still around, but in a much lower percentage than was once expected and mostly for kids movies.
Traditional exhibition had a clear price variation option in the past. It was called second run. In the 70s and early 80s, movies might run in their original theaters for 6 months, 8 months, even a year. But even as the industry shortened the windows and cable became a norm in America, there were successful second run theaters. The price was usually around 50% of what the local ticket prices were… some were $1 houses.
DVD and the studios’ desire to shorten windows to get to DVD eventually killed the second run business (for the most part). There was still a certain joy for parents getting their kids and some of their friends to go see the movie that was hot a few months earlier and leaving them in a theater together for $4 a ticket and candy that was slightly overpriced instead of wildly overpriced. But distributors could make more money on DVD sell-thru. So they stopped making the films available cheaply. There was also the conversion to digital projection, new projectors a non-starter for these smaller businesses (or segments of larger exhibitors).
That is the past… which doesn’t mean we should not learn from that history.
Just as audiences are beginning to feel like going to the movies is an experience they don’t have to think about for weeks, worrying about their physical safety (though there still has never been a reported COVID case coming from a movie theater contact), here comes variable pricing.
Today at the AMC Century City, going to a movie could cost you, per ticket, $26.49, $25.49, $22.49, $19.99, $18.49, $17.89, $13.89, or $12.89. I’m probably missing some (like Senior pricing).
Buying tickets online has become much more the norm. But if price is a consideration in your choice to go or not go, what is this mess?
And what kind of sense does it make for AMC or Regal or all exhibitors to decide for themselves what will be a hit and what will not and price accordingly?
If there is anything that movie and television history has taught us, it is that no one really knows what is going to be a hit and what is going to be a miss. This is one of the reasons why Big IP movies are so popular with studios. They rarely fail. But they are also so expensive that they sometimes barely make money. (Different discussion for a different day.)
I think Varied Pricing can work for exhibition if - and only if - they lay it out really clearly for the consumer and stick with it. It can be a little complex… but again, consistency is what is an absolute must. So not too complex. Doing it on the sly is not a good methodology.
Say, in a big city…
$25 for Premium Screens
$20 for “Big” Movies on Regular Screens
$15 for “Regular” Movies on Regular Screens
$10 for “Arthouse” Movies on Regular Screens
$7.50 for Matinees
$5 Tuesdays and Wednesdays Daytime
If it needs to higher for Premium Screens, okay. That is a point of negotiation. Want to discount for Premium Screen Matinees or Tues/Wed? Okay. Go ahead. Make up your own numbers. The point is… settle on a target your audience can keep in their heads as a new norm.
(AMC’s A-List, a service I subscribe to, offers up to 3 films a week on any AMC screen for $23.95 a month. I am convinced that there are a lot of reserved seats that go unused by A-List members. This may be forcing pricing on Premium seats higher because AMC knows the percentage of reservations go unused. Another complication.)
I am taking my family to The Batman later today. $20 per adult and $17 for a 12-year-old. Regular Screen. Too expensive for that. Lots and lots of seats before the evening shows.
Premium theater seats are almost all sold out in this area. $26.50 per adult, $22.50 for kids.
I would have paid the extra money for a premium screen, as many have. Seats aren’t available within 10 miles of my mid-city home. And AMC and Regal are obviously seeing that in their numbers. So again, expect more conversions.
But if you are a ticket-by-ticket movie theater attendee and you pay $25 for The Batman, do you think of tickets as expensive - “tickets always cost around $20” - or do you think about how you can go see a Searchlight movie on a weekend for just $14?
It doesn’t matter so much that a consumer can go on your app and see that the ticket they might want is cheaper than they expected. It is the retailer’s need to train their customers. They have to say - repeatedly - Pay X for Big Movies, Pay Y for Middle Movies, Pay Z for Little Movies. Teach the lesson you want to teach. Not just get more from comic book movies… give your captured audience a reason to come back for other kinds of movies. Sell the whole product.
The long-term goal has to be re-building and stabilizing the market for theatrical, not gouging audiences a dozen times a year because you can get away with it. That is penny wise and pound foolish.
That is, unless you want to see your 15-screen multiplex become a 5-screen Premium Plex in 5 years. 5000 seats down to 1000 seats available in the same brick & mortar spaces.
Yes, the price per seat will be higher. No, it will not make up for the loss of seats, even if you are running over 90% empty on most of your screens, Monday-Wednesday.
And that, for what it’s worth, is a 15,000 screen domestic exhibition business, down from the 40,000+ we now have… not accounting for the percentage of theaters that simply close under those circumstances.
Soon after, we are down to a smaller-than-10,000 screen exhibition business… fewer than 200 screens per state.
No one smart thinks that the industry cannot change the market. Distribution can kill theatrical. It won’t be the audience. It’s not (just) a moral question of lost jobs and lost businesses. It’s not because we love movie theaters so much. Disney just joined every other streamer without commercials in planning for a advertising-based stream for people who can’t/won’t pay for commercial-free. Even Netflix is testing this overseas.
No one can afford to throw money away. And miniaturizing theatrical is just that.
Coming out of 2 years of a health emergency, exhibition needs, more than ever, to rebuilt a relationship with its audience.
If The Batman does $150m this weekend, that’s about 12.5 million tickets sold nationally. If AMC picks up an extra $5 million in that equation this weekend, will it be worth the bad will?
Successful marketing is affirmative marketing. No More Lies… well, No More Secrets.
Until tomorrow…
THB #92: The Trouble With Variable Ticket Pricing