Tired of $12 movies?

Theaters should adopt a supply-and-demand philosophy: Charge less for unpopular films.

By doubleace May 2, 2011 1:39PM

This post comes from Lynn Mucken at MSN Money.

 

I like movies, and I watch a bundle of them on TV, usually on Encore or Turner Classic Movies or any channel where they are uncut, not interrupted by commercials, and free.

 

I prefer westerns, film noir and anything with naked women. (My motto: If it doesn't have gratuitous nudity, it better have gratuitous violence.)

 

But that is television. Movies are created to be watched in the theater -- big screen, big sound and, unfortunately, big money. Still, I would rather pay 24 bucks for my wife and I to go the multiplex than pay $5.99 to see an on-demand high-def movie on our fine 40-inch Sony.

That is, of course, if it is the right movie.  

 

That's why I was intrigued by a recent column in the Los Angeles Times by David Lazarus, who asked: "Does it make more sense economically to screen a movie to a half-empty theater if everyone pays $10, or to a full theater if everyone pays $5?"

 

What a grand concept.

 

Suppose you went to the 16-plex last Saturday night with your date/spouse/friends. You had talked it over and decided to lay down $12 apiece to see chase movie "Fast Five" -- 7 million people did; it grossed $83.6 million last weekend. But what if you could see "Water for Elephants," which had opened a week earlier, for $9, or five-week-old "Source Code" for $6, or maybe $4 to see "The Lincoln Lawyer," which has been out for seven weeks? You might change your mind while waiting in line. And there were plenty of good seats available.

 

Let's refine the pricing system even further. There is no real reason all first-run movies have to be priced at $12.

 

"Fast Five" was expected to be a big first-weekend hit, but what about two other new releases, "Hoodwinked Too!" and "Rio," both animation. Start "Rio," which is aimed at an older audience, at $10, and the for-kids "Hoodwinked" at $6. More seats would be filled and more high-profit popcorn, candy and soft drinks sold. Post continues after video.

And be quick and flexible on the prices. New release "Prom," a teen flick that got bad reviews and brought in just $5 million, could have been changed to an $8 movie after Friday night.

Pricing could go the other way, too. Two slow-starting surprise hits of the past decade, "Sideways," which ran for 30 weeks, and "Little Miss Sunshine," which ran for 35, both eventually grossed more than $100 million. They could have started out as $8 movies and gone to $12 when it became apparent that people liked them. The exposure a cheaper ticket might have brought could have enhanced their buzz.

 

The LA Times' Lazarus would take it ever further. "Movies could even be dynamically priced on a per-show basis," he suggested, "with the best seats selling for more, other seats selling for less and on-the-spot bids being accepted right before showtime for any leftover seats."

 

The relationship between movie distributors and theaters might stand in the way of such common sense, of course. Contracts are complex, but in simple terms, the theater's cut of the box office is smallest -- maybe 25% -- at the beginning of a run and gets bigger -- perhaps to 75% -- the longer a movie is shown.

So, distributors might balk at cutting the price on "Prom" on opening weekend. After all, it sold 400,000 tickets at $12 and who could guarantee that it would have sold 600,000 if the price were $8.

 

One thing for sure, however: At $12, there will be no one watching that movie on Monday through Thursday this week. At $5 a ticket, there might be. The distributors still make some money, and the theaters will sell more popcorn.

 

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28Comments
May 3, 2011 8:17AM
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I haven't been to a movie in a theater in years.  I can watch netflix, in my chair, with my dog, on my schedule, drink a beer that cost under a dollar and if I smoked I could smoke.  My car is in the garage with no door dings and no gas consumed.  And, no one is talking or texting on their flipin phone!
May 3, 2011 6:59AM
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While you may want to pay 12 bucks, a piece, for you and your wife to watch a movie in a theater rather than $5.00 to watch it at home on your big screen... I'm just the opposite.  All too often, nowadays these so called block buster movies as so crappy, that I'd be mad as hell if I paid $25+ bucks to watch them and that's not including popcorn and drinks....which would easily take us  to the  $50.00+.  Now if this is about the two of you spending time together...maybe it's worth the $50 bucks, but if its about the quality of the movie experience...hell no it isn't worth it. 

I agree with the previous poster all movies should be directly streamed to netflix or similar service.. theaters are an outdated concept.

May 3, 2011 6:51AM
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The movie theaters can all stick it up their collective a$$es. 99.9% of the crap being churned out these days isn't worth half what they want for tickets. I can get a month's worth of Netflix for LESS than a movie ticket. They should just release all films directly to Netflix instead of theaters. Looks and sounds just as good on my widescreen anyway.

May 3, 2011 8:44AM
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$12 for a movie?WTF? $12 may not seem like alot, but try taking a family of 5 to the movies, with drinks and popcorn , and I better bring my checkbook, savings book, credit cards, IRA, and whatever else i can find, I say frick it!  The money they pay the actors for this krap, is on par with some of these high priced athletes. I love a good movie, but I have other bill`s that are more pressing, like food, elect. medical, college. They can kiss my butt, where the sun does`nt shine. I just won`t go.
May 3, 2011 5:59AM
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How about not paying $12 to see a movie you will be able to see on cable in another 20 weeks?
May 3, 2011 8:42AM
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I've been to maybe 6 movies since 2000 ... couple in Iceland .. 1 in New Zealand ... 2 in Brazil ... 1 in the states ... Prices vary ... But sadly mostly the same crap movies year after years ...

 

Im 55 ... there are almost no good movies > Ones with real acting .. real writing .. Great Filming (NOT SPECIAL FAKE EFFECTS)

 

Why pay to go to the theater, when shortly after you could buy the dam thing on DVD for around the same price at Walmart or online ... A New movie to YOU, is still new even if you see if 3 months later ...

 

When I was a kid, i manage a theater in a fancy mall ... the one on the other side of town ( the Dollar one made less gross > MORE PROFIT ... the distributors get a HUGE % of the ticket price and thus the reason Snacks & Drinks cost so dam much ... general speaking a theater makes little profit off the ticket price, as distributors can get 85% & more of the ticket price.

May 3, 2011 8:14AM
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Don't like the price?  Don't go.

 

The production company takes all the ticket price and the theater jack up $2 worth of snacks to $20.  Most movies aren't worth the price on pay per view, let alone at the theater.

 

There going to price themselves out of their consumer base

May 3, 2011 8:49AM
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The problem is Hollywood's target audience is teens. Very few pictures are made for adults, and I'm not talking about porn. I'm talking about films like the classics--films written and produced for adult audiences.

 

For whatever reason, Hollywood is, in my opinion, practically ignoring the adult audience. There are exceptions, with films such as "The King's Speech."

 

Most films today are mindless trash for teenagers. Unfortunately, that's what seems to be selling, or so they say. The truth of the matter is most films don't even make back their cost of production (excluding cost of marketing)!

 

Several years ago the film "Driving Miss Daisy" cost $7.5 million. It grossed over $125 million. You'd think they'd have learned something from that.

May 3, 2011 7:49AM
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The writer misses the real point, the reason that you must pay these ridiculous prices for tickets is so that Reese Witherspoon and Jake Gyllenhall and their colleagues can continue to get paid $10 million to make movies that nobody wants to see. Perhaps the movie studios should get smart and start giving actors a percentage of the proceeds from movies rather than pay them up front for movies that inevitably bomb due to the millions of dollars paid to the lead.
May 3, 2011 9:30AM
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From what I gather, the point of tiered pricing is to fill the theater at each showing, thus maximizing the theater's profits.  That won't work for me as I go (on the rare times I do go) in the afternoon so I don't have to deal with the talking, texting crowd.  And also because it's cheaper.

 

Fill up the theater and I won't go for any price.

May 3, 2011 7:15AM
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I have the $12 movie problem solved for myself, at least. I go to the earlier shows where I rarely pay more than $6.50. There are usually fewer people in the theater, even on the opening weekend of a major movie. $12 would almost buy the DVD which will be release only a few months later.
May 3, 2011 9:08AM
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When I was on the road and was bored in my hotel, I would often go to the nearest multiplex and bounce around from 1 movie to another. The system you describe, $5 for this film and $10 for that film wouldn't work. Everybody would pay $5 and bounce to another theatre. The way multiplexes are set up, you go to the ticket window, pay for your ticket and pretty much go see any movie (or movies) that you want.

 

It's a good approach but it simply wouldn't work.

May 3, 2011 9:04AM
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 Lynn Mucken, is the same screw loose who wrote an artical a couple days ago  about how we should be happy with $5.00 or even $6.00 gas. This woman is a screw loose, anything she proposes ain't happening. 
May 3, 2011 3:31AM
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yes!  i've been thinking this for a while now.  not all movies should be priced the same at a theatre.  Do the distributors not get it?  People are staying away from movies because tickets are too expensive.  The only movie I would pay that much for is a blockbuster hit loaded with special effects.  If a movie is produced with a lower budget, the makers should be able to show their film for a cheaper ticket price.  It's sad that this situation results in mostly special effect superhero movies being put out, and sequels that a studio can bank on. 

 

maybe someone will find a better way to do on-line theatre distribution.

May 3, 2011 8:36AM
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My wife and I don' t do the megaplex's since we would rather not sit and listen to a bunch of kids.  We patronize a theater chain that sells alcohol and food.  So regardless of the quality of the movie, we can have a couple of pints of craft brew and a pizza or burger.  After the second pint or so, you don't mind if the movie stinks.  Best of all, no kids.  I think the pricing by demand is a great idea, but the distributors and studios won't go for it, since they will have to work harder to make projections as to movie grossings and comparing them from one movie to another.  We used to have Dollar cinemas here in Houston, where you could see movies that had been released weeks or months earlier.  I think they died due to the fact that movies are now on cable or pay per view a lot sooner than they were in years past.
May 3, 2011 10:25AM
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It is a hard balancing act. I think movies are too expensive. I know we have inflation, food, fuel, etc are more expensive, but first: the movies are not a necessity and a small difference in price can make a huge difference in attendance.

 

I fill give you an interesting example about a multiplex operator experiment in Poland when I was there. Now - you have to understand that movies cost about the same all over the 1st world, which gets the top releases on the same day everywhere.

 

The cost of the move ticet was about 22PLN ($8-$10 depending on the exchange ratio), but that was way more than most people would want to pay, so the theaters were rarely packed and in a lot of cases there was like 10 people total watching a movie.

 

So this big opearator made a "special weekend" where the prices of the tickets were decreased to about 60% fo the normal price. The long story short: if you did not get the ticket like 3 days in advance you could not get to see the movie during that weekend no matter what you wanted to see or at which hour.

 

So in this case "the WalMart way" worked. 10 people at 10 bucks = $100 per show. 200 people at $6 = $1200 per show. Not to mention that with all that extra cash everybody felt really generous at the concession stand (in short I had to wait 20 minutes to get my 2 hot dogs, nachos and 3 drinks).

 

There is no saying it would work the same way in the USA, but the story shows sometimes the scale is more important than a singular profit. of course the theaters are packed in the US for the good movies, so no reason to decrease the price. But any movie after 2 weeks of showing could have the "old movie price" with 2 bucks taken off. Somteims it is not how much you spend, but how much you save... :)

May 3, 2011 5:29AM
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If you run it as supply and demand, it will be like gas prices. "You all bought gas for $4.17, so now we'll charge $4.35 and there's nothing you can do about it." Eventually the movie theaters would start price gouging like the oil companies, and collapse when people stopped going to them.
May 3, 2011 4:19PM
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I have run the numbers before and it is cheaper for me to go to the $2.00 theater, which is farther away, than to go to the megaplexes.  Not that I dislike the megaplexes, it is just the cost for a family of 6.

 

Megaplex cost:

 

Tickets:  $49.00

Popcorn & Soda: $15.00

Gas: $8.89 (with gas at $3.50/gallon)

All in: $72.89

 

$2 Theater Cost:

 

Tickets $18 ($3.00 after dark)

Popcorn: $14.00

Gas: $14.91

All in: $46.91

 

I can go and watch a movie, though a month or so after release, eat up lots of popcorn and drink some soda with my whole family cheaper than I can get tickets for the movie at first run.  That is the reason why I don't go see first run movies.  Not that I don't want to, it's just a cost thing and in this economy, I need to be very careful how I spend my money.

May 3, 2011 10:52AM
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We have a dollar movie theater here in Albuquerque.  $1.0 on Mondays for seniors, two bucks for everyone else and for the rest of the week.  They get the best movies as soon as they leave the major theaters so I just wait a week or two and go to this theater.  Yes, their popcorn and other treats are as expensive as other theaters but you can see the movie for virtually nothing.  It's just a matter of having the patience to wait a couple of weeks after the initial opening. 
May 3, 2011 9:47AM
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Movie theaters are a thing of the past.Just like the video rental store,you will soon see movie theaters closing their doors.as soon as movies are allowed to come out on dvd and on demand as soon as the movie comes out in theaters that will be the movie theaters final nail in the coffin.and rightly so.they are so expensive,the average family of four cant afford it.Im sorry but personally i would much rather watch a movie at home with family & friends then go and get the bottoms of my shoes all sticky and my wallet emptied.not to mention 95 % of current movies suck
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