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Why Do All Movie Tickets Cost the Same?

Soulskill posted more than 2 years ago | from the dollars-and-sense dept.

Movies 464

gambit3 sends this quote from The Atlantic: "Like tens of millions of Americans, I have paid money to see Mission: Impossible, which made $130 million in the last two weeks, and I have not paid any money to see Young Adult, which has made less than $10 million over the same span. Nobody is surprised or impressed by the discrepancy. The real question is: If demand is supposed to move prices, why isn't seeing Young Adult much cheaper than seeing Mission: Impossible?"

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Prices ARE different (5, Informative)

bonch (38532) | more than 2 years ago | (#38579420)

I've gone to see plenty of big films whose ticket prices were higher than the other films playing at the same theater in my town. I get that this is supposed to be a ~Big Evil Movie Industry~ article, but the premise isn't true--especially with Avatar, which the article acknowledges as an "interesting exception."

Re:Prices ARE different (5, Informative)

JDAustin (468180) | more than 2 years ago | (#38579470)

Prices are only different within the same cinema complex when there is a premium involved or a across the bored discount. This is normally IMAX or 3D for the premium or matinee prices for the discount. Otherwise prices are uniform.

Re:Prices ARE different (5, Funny)

TheABomb (180342) | more than 2 years ago | (#38579570)

Oh, if only I got a discount for every time I left a cinema bored ...

Re:Prices ARE different (5, Funny)

formfeed (703859) | more than 2 years ago | (#38579718)

Oh, if only I got a discount for every time I left a cinema bored ...

That's actually easy. Put an infrared led on your jacket. If the movie sucks, activate it.

Re:Prices ARE different (4, Interesting)

Bucky24 (1943328) | more than 2 years ago | (#38579804)

Forgive my ignorance, but what does that do?

Re:Prices ARE different (5, Funny)

bmo (77928) | more than 2 years ago | (#38579866)

They will accuse you of video taping the movie, be rude to you, rough you up, possibly call the cops, and all the while you don't have a camera.

You point this out.

You get the "please don't sue us" discount.

--
BMO

Re:Prices ARE different (4, Informative)

geekoid (135745) | more than 2 years ago | (#38579480)

really? I've never seen a price difference for the same filming type at the same cinima:

price difference breakdown:
3d more then 2d
new run and longer runs the same price at the same cinema
older movie cheaper at less quality cinema's.

I have never seen 2 2d movies at the same cinema at different prices.

Re:Prices ARE different (5, Insightful)

CapOblivious2010 (1731402) | more than 2 years ago | (#38579628)

I have never seen 2 2d movies at the same cinema at different prices.

Yes, but why not? For any given movie, at a given cinema, at a given time, there's an optimal price that maximizes profit: charge a little more, and you discourage enough people that you end up with less profit; charge a little less, and while you may get more customers, you still end up with less profit.

If it were practical to determine this optimal price, any rational cinema would charge it.

It occurs to me, however, that determining the optimal price might be rather difficult: it probably varies from cinema to cinema, movie to movie, time of day, and "age" of movie (that is, the optimal price for a new movie is probably different than that same movie a month later). Since most of the money is made in the first couple of weeks, there's not much time to gather statistics, analyze them, and do all the necessary number-crunching.

Also, in many cinemas it would be fairly easy to defeat the system: buy a ticket for the cheapest movie listed, then sneak into the theater for the movie you actually want to see. Policing this might cost more than the additional profit.

Re:Prices ARE different (0)

Anonymous Coward | more than 2 years ago | (#38579816)

Because often, the theater's strongest competition would be itself. Don't want to pay $20 to see A movie? Then you end up paying $10 to see B movie at the same theater, grumble about it, and then go somewhere else next time.

Re:Prices ARE different (1)

icebraining (1313345) | more than 2 years ago | (#38579830)

You could probably create a decent algorithm by comparing new movies with old ones, by matching genres, directors and reviews from critics.

It's the studios' fault (5, Interesting)

PCM2 (4486) | more than 2 years ago | (#38579954)

Yes, but why not? For any given movie, at a given cinema, at a given time, there's an optimal price that maximizes profit: charge a little more, and you discourage enough people that you end up with less profit; charge a little less, and while you may get more customers, you still end up with less profit.

If it were practical to determine this optimal price, any rational cinema would charge it.

You've hit the nail on the head. A rational cinema might charge that price, true. But the cinema business is not strictly rational, any more than any other media business is (think: "agency model" pricing for ebooks).

Some in the UK may remember when the founder of EasyJet proposed to do just what is suggested. He wanted to create a chain of theaters that priced seats based on demand, in much the same way that EasyJet prices airline seats. Theoretically, you'd be able to see a first-run movie for as little as £0.20, depending on time, date, and how well the screening was showing. He couldn't do it, however, because he couldn't reach agreement [guardian.co.uk] with the film studios over a flat-rate pricing scheme that would allow him to set his own prices for seats.

Re:Prices ARE different (2)

icebike (68054) | more than 2 years ago | (#38579734)

Really? No price difference?

I suggest you go on line to the theaters near you and check out prices for seating time that are near the same time of day for Alvin and the Chipmunks and Mission impossible. 7.25 for the former, 10 bucks for the latter in most areas near me in the same complex.

Re:Prices ARE different (1)

Rob the Bold (788862) | more than 2 years ago | (#38579814)

Really? No price difference?

I suggest you go on line to the theaters near you and check out prices for seating time that are near the same time of day for Alvin and the Chipmunks and Mission impossible. 7.25 for the former, 10 bucks for the latter in most areas near me in the same complex.

I did that, and no price difference here. There all the same, time and "Ds" being equal.

Re:Prices ARE different (2)

Zocalo (252965) | more than 2 years ago | (#38579818)

It happens, but it's usually the independant or certain premium entertainment complex type places that offer it, and even then only on some screens. I don't know of any big chains that do this (heard good things about Alamo picture houses, but haven't been to a US city that has one yet - anyone have details?). First place I found that did this is the Odeon run Printworks in Manchester, UK, but I've since been to several places around the world that do this.

Typically they have standard entry tickets where you get to sit in a cheap seat and watch the movie and everything else is extra, as normal. They also offer a premium ticket where you get some extras included in the price; typically better seats - which can be the same screen, but are better positioned relative to the centre of the screen - and free refreshments (except alcohol - you have to pay for that, if available). Often there's a lounge / green room where you can chill before and after the movie, and top-ups are often brought to you so you don't have to miss any of the movie. The real kicker is that the premium tickets usually work out less than buying the standard ticket and paying for a soft drink and some popcorn/nachos or whatever. The only drawback is you usually need to plan ahead and book.

Re:Prices ARE different (1)

hedwards (940851) | more than 2 years ago | (#38579946)

There used to be matinees where you'd pay somewhat less money to see the movie, but around here at least those have been phased out over the years. Back when I was a kid typically any screening before 4 or so would be discounted. These days there's at most one matinee screening and the discount is pretty puny.

Personally, I'd go out to more films if the prices weren't so ridiculous. Even without buying popcorn you're still looking at like $10 to see the movie.

Re:Prices ARE different (4, Informative)

Endo13 (1000782) | more than 2 years ago | (#38579552)

I get that this is supposed to be a ~Big Evil Movie Industry~ article

Actually, that's just to grab your attention. If you read the whole article, you'll see at the end he explains why uniform pricing exists. He doesn't say it's a good or bad thing, but the way he presents his explanations implies he considers it at least reasonable, if not good.

Scale (1, Informative)

geekoid (135745) | more than 2 years ago | (#38579444)

Economy of scale.
However it is probably a good time for the cinemas to approach the movie industry about trying this.

Re:Scale (2)

MightyYar (622222) | more than 2 years ago | (#38579596)

Economy of scale.

I don't think so. I think it is because, to the theater owners, supply is more or less infinite and demand is fixed. When they stop filling the theaters with one movie, they rotate to the next. Of course I am simplifying... there is definitely a shortage of blockbusters, not an infinite supply... but they can pretty much account for average attendance and price accordingly.

Variable pricing would piss off people and mark certain movies as failures. I'm pretty sure it would work like wine - people would avoid the cheap ones.

Re:Scale (2)

Oswald (235719) | more than 2 years ago | (#38579742)

I'm pretty sure it would work like wine - people would avoid the cheap ones.

At Longhorn I avoid the cheap wines. At real restaurants I avoid the expensive ones. How does that figure into movie pricing?

Re:Scale (1)

TWX (665546) | more than 2 years ago | (#38579664)

Only if they can do it right. One problem with attempting to price anything based on supply vs. demand is that it's easy to get it wrong on the micro scale, and since people usually don't "consume" the same movie more than once when they're in the theatre, if they get it wrong they'll either drive away movie-goers with too high a price, or lose on profit by pricing too low. Then there's the problem of the blockbuster that would theoretically see much, much higher prices on opening night or day depending on the draw. When the Star Wars movies came out there were lines and lines, for days, just to buy tickets. If the prices were supply and demand, those initial showings would have had 10x the cost, with $100 a ticket, not $10, and there wouldn't have been lines.

I also don't want to see a commodities-trading type of purchase experience. I don't want the theatres to all link up for a market, where a movie is announced at a certain price, and then demand in ticket sales versus the supply of seats in the theatre causes a minute by minute fluctuations in price. It would leave some theatregoers paying little if a movie isn't quite sold out but they want to fill an auditorium, but might also leave some customers slammed in that magic 20 minutes before show timetable, when the bulk of the audience buys their tickets.

Re:Scale (3, Interesting)

norpy (1277318) | more than 2 years ago | (#38579770)

so patent it!

But seriously, there is no reason this won't happen. In fact as margins get tighter and tighter it is more likely to happen, just like airlines crunch numbers to extract the maximum amount of money they can out of a jet cinemas could do it with tickets.

The problem is that a jet from dallas to chicago going for fire-sale prices is not going to take business from a dubai to london flight, but a $3 ticket to some shitty Adam Sandler comedy might make some people decide not to see the blockbuster at $50 per seat. So to make it work you would definitely have to do some modelling and behaviour analysis.

Parking garage (0, Insightful)

Anonymous Coward | more than 2 years ago | (#38579464)

Why does it cost the same to park a big vehicle as to park a small vehicle?

Why isn't it cheaper to park at 6 AM and more expensive to park at 9 AM or noon?

Re:Parking garage (5, Funny)

wygit (696674) | more than 2 years ago | (#38579494)

Because all the parking spaces are showing the same movie?

Re:Parking garage (1)

Anonymous Coward | more than 2 years ago | (#38579524)

Why isn't it cheaper to park at 6 AM and more expensive to park at 9 AM or noon?

...it often *is* cheaper to park at 6am than at 9 or noon ("Early Bird Discount"), at least in Chicago.

Re:Parking garage (1)

hawguy (1600213) | more than 2 years ago | (#38579976)

Why isn't it cheaper to park at 6 AM and more expensive to park at 9 AM or noon?

...it often *is* cheaper to park at 6am than at 9 or noon ("Early Bird Discount"), at least in Chicago.

That's a better question - why do garages offer cheaper all day early-bird pricing if I get there before 9am - even if they are a self-park facility and don't do tandem parking. Most of the time, the discount means that I'd pay less to park from 8am - 5pm than from noon - 5pm.

I can see why a place that does valet parking might give a cheaper early bird rate - they know the early bird customer is likely to stay all day, so they can block that car in with other cars of short-term parkers.

Re:Parking garage (1)

Midnight_Falcon (2432802) | more than 2 years ago | (#38579538)

In San Francisco, it's not in many locations (at least depending on the size of day), we have something called SFPark. http://sfpark.org/ [sfpark.org] Garages in New York and SF that I've visited also have similar policies and charge more for SUVs etc.

Re:Parking garage (2)

MightyYar (622222) | more than 2 years ago | (#38579666)

Why does it cost the same to park a big vehicle as to park a small vehicle?

It is more expensive to park an SUV or minivan in many manned garages. It's the unattended ones with the gates where they use uniform prices for what should be an obvious reason.

Why isn't it cheaper to park at 6 AM and more expensive to park at 9 AM or noon?

Most city parking garages seem to have different pricing at different times of day.

Re:Parking garage (1)

Surt (22457) | more than 2 years ago | (#38579874)

It is, in fact, very common for parking garages to offer rates that vary through the day, and to offer small vehicle discounts.

The other way around (4, Insightful)

Anonymous Coward | more than 2 years ago | (#38579496)

On the contrary, it should be more expensive to see a bad movie since the production cost (+ profit) has to be payed for by fewer viewers. While massively successful movies should cost a dime due to economies of scale... the problem is that you don't know beforehand how the movie will do, so the price should change from day to day depending on its success... which of course would be complicated and thus it is easier to just pay the same for all movies.

Re:The other way around (1)

0123456 (636235) | more than 2 years ago | (#38579548)

On the contrary, it should be more expensive to see a bad movie since the production cost (+ profit) has to be payed for by fewer viewers.

So Poop-In-A-Bun should cost more than a McBurger, and a Tata Nano should cost more than a Ferrari?

Video Games (3, Informative)

Anonymous Coward | more than 2 years ago | (#38579516)

What I've found interesting is that video games actually DO follow the rules of supply and demand, even at Best Buy, and this surprised me! Skyrim was on sale for a whopping $60, some less-popular-but-still-new games were in the $50s, and my brother and I got a good laugh when we saw poor Duke Nukem Forever sitting there for a measly $15.

Re:Video Games (5, Funny)

TheABomb (180342) | more than 2 years ago | (#38579616)

But when DNF was supposed to come out, $15 could fill your gas tank AND have enough left over for a pack of cigarettes.

Re:Video Games (2)

sexconker (1179573) | more than 2 years ago | (#38579984)

But when DNF was supposed to come out, $15 could fill your gas tank AND have enough left over for a pack of cigarettes.

I think you meant pack of gum.
The Duke's been out of gum for a long time.

Re:Video Games (1)

icebraining (1313345) | more than 2 years ago | (#38579656)

I'm pretty sure that at least around here DVDs do too, it's just movie theaters.

perishable/limited vs. perpetual (0)

Anonymous Coward | more than 2 years ago | (#38579520)

demand typically tends to push prices of things that are of a limited quantity - resources, products, etc ... things such as movies, music don't fall into that category - a movie doesn't expire after a certain date, or after a certain number of views.

Re:perishable/limited vs. perpetual (1)

c0lo (1497653) | more than 2 years ago | (#38579606)

demand typically tends to push prices of things that are of a limited quantity - resources, products, etc ... things such as movies, music don't fall into that category - a movie doesn't expire after a certain date, or after a certain number of views.

Even more, they tend to become better... pirate one that you can no longer buy and you'll be paying in zillions for copyright infringement.

Cost of delivery (0)

Anonymous Coward | more than 2 years ago | (#38579522)

This isn't digital delivery... A real theater doesn't cost less to vacuum just because the movie sucked, and the cost of having an empty theater is the same operating cost as a full one, give or take a few minutes of hoovering.

That being said, cheap butts in seats for a lower price is better than none for a week.

Re:Cost of delivery (1)

0123456 (636235) | more than 2 years ago | (#38579572)

A real theater doesn't cost less to vacuum just because the movie sucked, and the cost of having an empty theater is the same operating cost as a full one, give or take a few minutes of hoovering.

From what I've read, movie theaters make most of their money from overpriced popcorn and drinks, not movie tickets.

Re:Cost of delivery (1)

TheABomb (180342) | more than 2 years ago | (#38579646)

But ten people in the room versus one doesn't really take THAT MUCH more time to clean, but it does increase concessions revenue by about $90.

Re:Cost of delivery (2)

icebraining (1313345) | more than 2 years ago | (#38579708)

Cost is irrelevant to the price. Rational suppliers will set the price that ensures the biggest revenue, regardless of cost.

Re:Cost of delivery (1)

dr2chase (653338) | more than 2 years ago | (#38579828)

Right. So I check out digital delivery, and on iTunes, Princess Bride HD is $14.99, Wild Hogs HD is $17.99. SD prices are the same, but back when I first noticed this, Princess Bride SD was cheaper.

Inconceivable!

I think we all know which is the better movie.

Variable pricing is there (0)

Anonymous Coward | more than 2 years ago | (#38579526)

If you really want to see a movie when it comes out you pay full price.

If you're on the fence about the movie or aren't in a a hurry you wait for the movie to move to a discount cinema.

Still others will wait until pay-per-view, or rental (B+M or online) with different sliding scales for pricing depending on movie age.

Others will just pirate it for free from the start.

Why? Simple. (0, Troll)

Dee Ann_1 (1731324) | more than 2 years ago | (#38579530)

Greed.

False supposition (5, Insightful)

Dynedain (141758) | more than 2 years ago | (#38579576)

If demand is supposed to move prices...

What a bad place to start your argument. In classical economics, demand shifts affect pricing if supply is a factor. When it comes to movie distribution, supply usually isn't an issue.

Also, profits of Mission Impossible to to cover the losses of the gamble on Young Adult. Essentially, movie ticket prices are aggregated and normalized across movies to mitigate risk. Do you really want to spend $40/ticket on Mission Impossible so that Young Adult would cost only $3?

The actually hard-costs to the theaters (staff, electricity, rent, etc.) is pretty much the same regardless if 5 people are in the theater or 500, and is relatively minor in their overall operations. They pay back to the studios based on how many watchers they have, which where most of their expenses actually lie. They have to pay back the same amount to the studios regardless how how many tickets they sell, so why would they implement variable pricing?

Re:False supposition (4, Informative)

Dynedain (141758) | more than 2 years ago | (#38579652)

They have to pay back the same amount to the studios regardless how how many tickets they sell,

oops, that should have read "...pay back the same amount per ticket to the studios..."

Re:False supposition (0)

Anonymous Coward | more than 2 years ago | (#38579678)

I'd heard the argument that you're paying for two hours of entertainment (more or less), regardless of how much it cost to produce.

Re:False supposition (1)

Zaphod The 42nd (1205578) | more than 2 years ago | (#38579722)

You're absolutely right that supply isn't a factor. However, the way it is, studios are allowed to spend what they want and normalize it by charging us all regardless; so I end up paying for trash films that I would never see, and would never want to help finance. I guess here in America we have a very buyer beware culture, the cinema can do whatever the hell it likes and you just have to make the best of it, if you don't like it, don't see the movie. But that isn't exactly fair, and isn't exactly ideal either.

You got it backwards; more people are seeing Mission Impossible. So even though MI cost more money to produce, its MI that would cost $3 to see, where Young Adult would cost $15. Since Young Adult is less popular, though, this seems accurate. You pay more to get something harder to come by. Less people are going to see that movie, so you have to pay more per person to make it worth showing that movie in the theater.

They have to pay back the same amount to the studios regardless how how many tickets they sell, so why would they implement variable pricing?

well, maybe thats the problem. Used to be, if you wanted to buy one blockbuster movie, you had to buy ALL the movies from that studio. It was how they sold their crappy movies.
See: the Paramount anti-trust stuff.
So, it sounds like we're still caught in a similar situation, movie studios having too much control over theaters. Or maybe its just our culture is too ingrained in the idea that movies should all be equivalent in cost.

Personally a world where each film succeeds or fails on its own merits doesn't sound too bad. I guess it would suck for the movie studios, and they've gotta aggregate that cost somewhere. Still, why not do it on the bottom line, we made this much off this film, we lost on this film? They already do that, so why try to cover it up? And now I remember an article I read about Hollywood accounting, and how insane their practices are...

Re:False supposition (1)

icebraining (1313345) | more than 2 years ago | (#38579872)

You got it backwards; more people are seeing Mission Impossible. So even though MI cost more money to produce, its MI that would cost $3 to see, where Young Adult would cost $15. Since Young Adult is less popular, though, this seems accurate. You pay more to get something harder to come by. Less people are going to see that movie, so you have to pay more per person to make it worth showing that movie in the theater.

That makes no sense. If many people want to see MI, chances are your sessions are booked - so you can increase the price without losing viewers. Young Adult's, on the other hand, are half empty, so each seat you can fill without having to show more sessions is pure profit.

Re:False supposition (2)

Dynedain (141758) | more than 2 years ago | (#38579902)

Theaters don't pay back to the studios based on per-session of the film. They pay back based on per-ticket to the film. The ratio of viewers/session doesn't impact their costs significantly (minor changes to physical overhead only).

Re:False supposition (1)

sqlrob (173498) | more than 2 years ago | (#38579744)

Supply is sort of an issue, at least from the consumer's point of view.

Not all movies are in all theaters.

Re:False supposition (1)

Dynedain (141758) | more than 2 years ago | (#38579926)

That's them reducing supply to reflect demand. But overall they could supply most movies to as m any people as desired to see it. There is no real supply scarcity that would affect the supply/demand pricing except at the extreme ends of the spectrum.

Re:False supposition (1)

icebraining (1313345) | more than 2 years ago | (#38579778)

When it comes to movie distribution, supply usually isn't an issue.

That's obviously not true: you have a finite amount of screens which can show a limited number of sessions. Supply is definitively a factor. If it wasn't, I wouldn't have had to travel to a neighbor city to watch Essential Killing, since none of my local movie theaters were willing to supply it.

Re:False supposition (1)

Dynedain (141758) | more than 2 years ago | (#38579996)

There is a documented over-supply of movie theaters in the US. Because the per-screen overhead costs are so low, theaters can easily scale supply to match demand. This is why your local theater had 5 screens with 5 showings each for the latest blockbuster, but your obscure movie with no marketing budget is only shown out of town.

When it comes to movies there is no supply scarcity except at the extreme ends of the curve. Since supply is tuned to meet demand, there is no scarcity, and hence no reasoning why demand changes would effect price changes.

Re:False supposition (1)

Ichijo (607641) | more than 2 years ago | (#38579832)

When it comes to movie distribution, supply usually isn't an issue.

That's just how it works today. If a studio wished, it could restrict supply of copies and thereby keep prices high for a while, then lower prices gradually in order to keep the theaters full.

Do you really want to spend $40/ticket on Mission Impossible so that Young Adult would cost only $3?

I would be happy to wait a couple of weeks for the cost of Mission Impossible to drop from $40. Sometimes, I might even pay the $40 if it means I don't have to share the theater with some noisy rugrats. It would be nice to have the choice.

Re:False supposition (0)

Anonymous Coward | more than 2 years ago | (#38579842)

What a bad place you start with. Supply and demand is important. If you go to the movies, you can find yourself in a screen with only 5 other people. Why? Because no one wants to watch it. Drop the price to a buck a head and that screen will be near full.

Flip it around, massive hits like the Dark Knight and Avatar got many many people to pay for fake IMAX viewings, generally double the price of a standard ticket.

Re:False supposition (1)

msobkow (48369) | more than 2 years ago | (#38579920)

Your position makes perfect sense for movie theatres, but I think it would be interesting to take a different approach for streaming movies and downloads. Instead of charging up front for the movie, let people watch it and pay what they think it was worth.

This has been tried rather successfully for music and book distribution already, sometimes with surprisingly profitable results.

Unfortunately for Hollywood, that means I would have paid about $5 a piece for the 3-4 movies I downloaded and watched that I didn't think were an insulting waste of my time when I was done with them. I've lost count of how many I downloaded and stopped watching after 15-20 minutes of drivel, bad acting, bad scripting, and bad storytelling.

Re:False supposition (1)

msobkow (48369) | more than 2 years ago | (#38579962)

Pay $15-20 to see a movie at a theater where I'll have to put up with texting teens, guffawing drunks, and the stench of perfumed ho's giving me migraines?

When I can wait a few months and BUY the DVD for the same price and watch it as many times as I like?

When the odds are greatly in favour of the movie turning out to be drek and me wanting to leave early to demand a refund?

Puh-leaze -- why would I want to bother? There's a REASON box-office receipts have been dropping.

Re:False supposition (1, Interesting)

msobkow (48369) | more than 2 years ago | (#38579998)

By the way, if it weren't for watching "pirated" downloads, I'd never buy a DVD. I don't buy a DVD unless I enjoyed the download first. I'm a media hound -- I collect media of all kinds. But that doesn't mean I'm willing to part with my hard earned money for a CD I've never heard or a movie I've never watched. The harsh reality is I've felt ripped off more often than not when I did so.

Should the *AA succeed in their attempts to completely block torrents, they'll find people like me don't return to the theater or start buying more CDs and DVDs -- we'll just stop consuming their crap AT ALL. The "lost sale" doctrine assumes the content was WORTH PAYING FOR IN THE FIRST PLACE.

Re:False supposition (0)

Anonymous Coward | more than 2 years ago | (#38579974)

One word concessions. The more people you seat, the more $10 tubs of butter drenched popcorn you sell. In fact, if someone spends less on the ticket, they may be more likely to buy more treats, which I would guess have a much higher profit margin than the movies themselves.

Would you prefer Airline Pricing? (0)

Anonymous Coward | more than 2 years ago | (#38579610)

Would you prefer movie tickets were priced the same way plane tickets were? With a fancy algorithm designed to maximize revenue?

For the opening of star wars you might pay $300 for a ticket, whereas the opening of an unknown movie you could end up paying $2.

It will be cheaper - sooner (3, Interesting)

icebike (68054) | more than 2 years ago | (#38579620)

The fixed price has more to do with the requirements of running a theater than is has to do with the cost to produce or the popularity of a movie.
You have to run your physical plant, your concessions, pay your property taxes, employees, cleaning crew (theoretically), and make payments to your mortgage. The price you pay to the studio distribution chain may or may not vary (I honestly don't know). But in any event it is a fairly small component of the overall ticket price.

The reality is that the less popular shows will hit the video release channels much sooner, as theater owners can't fill their seats. When theater owners can't attract an audience, the stop showing the film and it sooner or later ends up on video/dvds, along with the inevitable price drop to just a few dollars or 99 cents or whatever. The less popular movies often show up on TV well within one year.

With that move to video, the price to view will fall for the average viewer, in spite of the fact that some paid full price to view it in a theater, but more waited to view it at home.

The average viewer may not be interested in some movie at (insert theater price here) PER SEAT, but will spend $3 bucks or less, PER HOUSEHOLD.
The theater manager can't afford to let in an entire household (who bring their own popcorn, sodas, squalling kids and yaking on the phone) for 3 bucks.

The mistake here is assuming the movie is the only thing being purchased in the theater.

Re:It will be cheaper - sooner (2)

Dynedain (141758) | more than 2 years ago | (#38579696)

Actually, it's the other way around. The largest chunk of the ticket price goes to the studio, and that amount is fixed by contract. Physical overhead costs are relatively small.

Re:It will be cheaper - sooner (1)

QuasiSteve (2042606) | more than 2 years ago | (#38579884)

cleaning crew (theoretically)

Hmmm.... you know what? Ticket prices should be higher for those who, willingly or out of recklessness, upend their popcorn bag, and those who can't be bothered to grab their half-empty drink from their seat when leaving the theater.

Too bad that would require cameras or ever-present personnel to properly enforce which would lead to all sorts of privacy issues.

Back a bit more on-topic.. the reason is that 'people' (and by that I mean the average Slashdot commenter) will use any excuse for lower prices and accept no argument for higher prices.
I.e. 3D commanding a higher price it is often argued is a scam (and that for something that just causes them headaches, adds nothing, etc. etc.) so 3D movies should be no more expensive than regular tickets (other than the $0.20 for 3D glasses at best and even that should be dropped if you bring your own (which in many countries is the case)).
But if the price for Young Adult, as per the submission, were dropped then that will be latched on - after all, it really doesn't cost much more to show Young Adult vs Mission Impossible - it's all the same projectors, etc. If there is any additional cost it's in having acquired the rights to show the movie at all which often correlates to projected popularity, thus projected running time at the theater, and is thus covered by showing it longer than Young Adult - thus suggesting that Mission Impossible should be just as cheap as Young Adult; but of course cheaper than it currently is.

Not the same... (5, Insightful)

twotacocombo (1529393) | more than 2 years ago | (#38579622)

It's not like buying a car or computer. Nobody says "Hey, I REALLY want to see this movie, but for $3 less I'd settle for this other one, even though I won't enjoy it quite as much". Not only are you spending your money on a movie, you're also spending time. Given the choice between a horrible, free movie, or a $15 supremely kick ass one, I'd rather invest a little in my life and actually enjoy it. In other words, people don't watch shitty movies because they're shitty, not because the price was too high.

Re:Not the same... (1)

Toonol (1057698) | more than 2 years ago | (#38579836)

Right. Take this same reasoning and apply it to books. Pretty much all paperbacks are the same price... and if I buy one, it's because I want to read that book. A discount on a book I'm not interested in is not going to seduce me away.

Re:Not the same... (1)

icebraining (1313345) | more than 2 years ago | (#38579932)

How does that figure with the shitty movies (and other shows) people see on TV because they're bored?

It's the studios (5, Informative)

Alpha830RulZ (939527) | more than 2 years ago | (#38579626)

Ticket prices are the same because the studios mandate the minimum price for ticket prices. The standard agreement between the theatres and the studios specifies what percentage of the gate receipts the studio gets (can be as high as 90% of the ticket price) and that the theatre will charge a certain minimum price. There are exceptions to this, but that is a default situation. Ticket prices therefore don't float in response to market demand because the enitity charging the prices, the theatre, is contracted to keep them fixed above a certain minimum.

Theatres would give movie tickets away in some circumstances if they could, in order to get you to come in and buy the concessions, which is where they make the bulk of their money. Studios counteract this behavior by mandating the high prices in the film rental contracts.

I know this because I used to support a software system that managed theatre accounting for a chain of movie theatres.

Re:It's the studios (1)

norpy (1277318) | more than 2 years ago | (#38579876)

I wonder if it works that way in Australia, because that would be considered price fixing and is horribly illegal. The only thing they could do is set a fixed $ amount for the royalty rates or rates per ticket and have the cinemas work out their minimum from there. They wouldn't be allowed to set a percentage + minimum retail price (they would be able to set a percentage + minimum royalty though which amounts to the same thing)

In fact even McDonalds can't set prices in Australia because the stores are franchised and get whinged at by the current affairs programs for having floating prices among stores. They can set a recommended retail price (or price range in their case), but the store owner has final say.

Re:It's the studios (4, Informative)

VinylRecords (1292374) | more than 2 years ago | (#38579942)

Ticket prices are the same because the studios mandate the minimum price for ticket prices. The standard agreement between the theatres and the studios specifies what percentage of the gate receipts the studio gets (can be as high as 90% of the ticket price) and that the theatre will charge a certain minimum price.

Actually it can be as high as 100% in some instances. Some studios will want to keep 100% of ticket sales for the opening weekend of a major blockbuster and force the theaters to make their money selling foods and drinks. If you have something like a new comic book movie or major action film coming out then you know that the theaters will be packed tightly for that first week.

So for example, Star Wars Attack of the Clones and Star Wars Revenge of the Sith took 100% of ticket sales from my local theater during the first week according to the manager. Meaning they only made money off of candy and soda and nothing from ticket sales for the first week.

Re:It's the studios (0)

Anonymous Coward | more than 2 years ago | (#38579950)

There is a second reason. You can hire a PFY to tear tickets and if you duck into see mission impossible instead of young adult they dont care... Then when he is done he can go make popcorn.

If you charge differently per movie then you would have people gaming it and buying young adult then just walking over to mission impossible... So now you have to hire MORE PFYs (more cost) to guard the doors during the run of the whole movie. So at a ciniplex with say 35 screens that would be 34 (or more if there are extra entrances) extra people you have to hire for 8 hour shifts... For a movie that is not making money in the first place...

So theater owners who are already only making money on concessions would have to hire a small army of people to run the theater.

Lets be nice and say the theater has 4 screens. With 1 entrance on each screen. That is an extra 30 bucks an hour you have to pay out (as you still need someone to duck over and run the popcorn too...). So if the price discrimination here would make an additional ~60 dollars in sales it would probably be worth doing. And at 10 dollars a ticket that would be an extra 60 people coming in the door (30 to just cover cost) just on ticket prices.

It's Price Fixing (0)

Anonymous Coward | more than 2 years ago | (#38579994)

The implied question is, why hasn't anything ever been done about it?

all conjecture (0)

gmhowell (26755) | more than 2 years ago | (#38579630)

Until someone with inside knowledge posts, this is all conjecture. Mine is that the distributors charge based on a per person basis that is relatively fixed. This may have to do with the antitrust cases that forced the studios to divest themselves of movie theatres. Second is that it's simpler for the ticket booth people. Or, it was prior to computerized consoles. It's also easier for mom and dad to drop their brats off at the theatre. Give each kid a $20 and let them figure it out.

demand is set by the number of theaters (1, Insightful)

NemoinSpace (1118137) | more than 2 years ago | (#38579634)

Which remains constant. And playing a bad movie is still better than having an empty theater.

It *IS* cheaper... (1)

mark-t (151149) | more than 2 years ago | (#38579642)

Theaters will often have announce "no passes" on their listings for any new releases that are expected or (have been already shown) to be big draws. This does not apply to paid passes, of course... it typically only applies to the sort of passes that are offered as promotional material during special events, or the type of passes that you sometimes get with a cereal box.

You didn't fool me (5, Funny)

The End Of Days (1243248) | more than 2 years ago | (#38579644)

This is Slashdot, the only acceptable price for a movie is 0 because it doesn't cost anything to copy it.

Re:You didn't fool me (1)

icebraining (1313345) | more than 2 years ago | (#38579956)

True, but I'm perfectly willing to pay for renting a seat on their real property and watch the movie on a big ass screen.

Not cheap... (1)

Anonymous Coward | more than 2 years ago | (#38579648)

Well, like beer the movie tickets in Japan are 4 times the price. The movies are 6 months late and the ticket price is absurd.
You have to choose your seats as if sitting in a stadium and there's no matinee price. Only the late show is discounted so there's
always the chance to miss your last train home. A family of 4 going to the cinema is a hundred bucks! I can buy the blu-ray cheaper
and entertain the family at home...

You cannot know for sure how well a movie will do (1)

Meshach (578918) | more than 2 years ago | (#38579700)

For some like Mission Impossible series the haul is inevitably big but for most movies is is not known before-hand how well it will do at the box office.

Also I for one would not be happy if I paid $13 dollars for a movie and the next say it went down to $10.

Re:You cannot know for sure how well a movie will (0)

Anonymous Coward | more than 2 years ago | (#38579772)

Also I for one would not be happy if I paid $13 dollars for a movie and the next say it went down to $10.

Americans, bah!

Because it costs the same to show (0)

Anonymous Coward | more than 2 years ago | (#38579726)

Why are they the same price in theaters? Because the theater has to have the same ticket salesmen staffed, the concession stand open, the projectors running, and the after-movie cleanup done for both a high budget movie and a cheap one.

I'm low on time right now, so I'll read TFA when I get home out of curiosity, but damned well better say that from the theater's perspective it'll cost approximately the same manpower and electricity no matter what they're projecting onto that screen.

Re:Because it costs the same to show (1)

icebraining (1313345) | more than 2 years ago | (#38580008)

Costs are unrelated to price, price is unrelated to costs. Suppliers will set the price that maximizes revenue depending on demand. Cost has nothing to do with it.

it is cheaper if... (0)

Anonymous Coward | more than 2 years ago | (#38579728)

If you pay for MI and stay for Young Adult afterwards, then it is cheaper. But then you would be "stealing" depending on how you feel about it.

A: Cost to project them is equal (0)

Anonymous Coward | more than 2 years ago | (#38579746)

Copyright and patents are a con. Getting paid multiple times for work done once is crooked.

The real question is a distraction.

Because information is not a resource. (0)

BlueKitties (1541613) | more than 2 years ago | (#38579748)

When you "steal" a movie online, the studio only loses "potential" sales. Likewise, when you do (or do not) watch a movie, the resources used to produce the movie remain constant. When 100,000,000 people watch the same movie, the production costs of the movie to the studios are the same as if 10 people watch it. In otherwords, supply and demand does not apply when we have infinitely reproducible units of trade. You do not "steal" a movie, rather you "unfairly take advantage" of someone else's hard work. It's similar to the stolen valor act. You can't actually "steal" valor, but you can take credit for something you don't deserve credit for. Movies expected to "make more money" are given bigger budgets -- they have more "viewers" which distributes the production costs. Movies expected to make less money are given smaller budgets, and the distributed viewership shares the lower production cost of the movie. Finally, "gambles" are factored into other movies, so a movie that loses money is compensated for elsewhere.

It's not really "greed," if you're demanding to see the biggest explosions. If you want cheap movies go order a low budget foreign film online -- and you'll pay for the corresponding lower budget. Or, you know, stop watching movies. No one is twisting your arm to shell out $$$ on overpriced movies. If Hollywood loses enough viewers, they'll scale back production costs, until the average viewer feels the cost is worth it. As long as people shell out premium $$$, movies will have premium production costs. Big fat corporate greed problems don't apply to ridiculous luxuries like big budget movies. The MPAA is not "forcing" you to consume their products, and it won't hurt you one bit if you don't buy their stuff. If you expect them to lower their costs, as if you're entitled to that, then you're the one being greedy.

Re:Because information is not a resource. (1)

mark-t (151149) | more than 2 years ago | (#38579886)

Not quite... When you "steal" a movie online, you take away some of the copyright holder's exclusivity to determine who is allowed to actually make such copies in the first place. Since exclusivity, by definition, means that nobody else is doing it, you are permanently depriving the copyright holder of that right, which was supposed to be guaranteed to him by having a copyright in the first place. This effectively lessens the worth of copyright for *ALL* copyright holders, not just the the copyright holder on whose work you may have infringed on, and, assuming that copyright is valuable to society, would, by extension, be harmful to society as a whole.

From the theater's perspective (1)

timothyf (615594) | more than 2 years ago | (#38579758)

What you're buying isn't a ticket to watch a specific movie, you're buying a ticket to sit in a particular theater at a particular time--they just happen to be showing a movie at that time. Thus, the response to low demand for a particular movie isn't to lower the cost for seeing that movie, it's to show more showings of a movie that *is* getting butts in those seats. And you'll notice that's what happens. The poor performing movies fade from theaters much more quickly than more successful ones, which often times end up playing on more than one screen. *That's* why they continue to charge the same price for movie tickets.

Now, you could make an argument that the price of an individual showing should react to demand, but I'm not sure how that'd work. Responsive pricing means that the first few people get screwed on their ticket price if demand turns out to be less than expected and the price drops, or the price of the last few seats to a popular showing is going to be much higher, which probably wouldn't fly well with people, and I'm not sure there's a big incentive for the theaters to do that. Increasing the price of tickets for popular movies seems to be a great way to incentivize people who can wait for DVD releases to do so, and theaters are already struggling against that mindset.

Interesting question (4, Insightful)

istartedi (132515) | more than 2 years ago | (#38579760)

I think a good answer is "because people would be pissed off if they had to think too much about the price". Or perhaps another way of putting it is that "the market is more efficient when the price of the movie is fixed and other factors are allowed to fluctuate".

The producers know that their product will sell for a fixed price, and they aim to sell as many as possible. It's easier that way. Consumers know that there is one price at any given time, and they adjust it by waiting longer if they want to lower it.

Perhaps the best answer is, "this is the social contract, and everybody is happy enough with it".

Re:Interesting question (-1)

Anonymous Coward | more than 2 years ago | (#38580004)

You are absolutely right! If only the sheeple would wake up, amirite? If everyone thought as deeply and critically as you obviously do, the world would be right as rain!

psychology (1)

retchdog (1319261) | more than 2 years ago | (#38579776)

people are wary of buying crap, and low prices are perceived to be a signal of this. so far, not too bad. however movies aren't fungible. if i mildly want to see X, and it's half the price of Y (which i don't want to see), i might well conclude that X is garbage after all and stay home. this assumes that the prices are somehow published in advance of getting to the theatre, which is its own problem but seems absolutely necessary to avoid appearing to be a bait-and-switch. people really hate feeling like they're being nickled-and-dimed (even irrationally so). airline industry can get away with it since it's mostly a fungible service, but it's suicide for entertainment.

i remember a long time ago, they developed soda vending machines that automatically jacked up the price above a certain temperature or heat index. the media jumped on it, and i don't think they deployed a single one.

Bargain Matinee (1)

Anonymous Coward | more than 2 years ago | (#38579800)

Bargain matinees are cheaper. Same movie.

Some Theaters in Portland, OR charge $6.00 (1)

mallyn (136041) | more than 2 years ago | (#38579850)

Folks:

Not all theaters charge the same. Some, in Portland, Oregon, charge only $6.00 or so.

Examples are the Clinton, the Hollywood, the Bagdad, and the Laurelhurst.

And some of those also offer real food, not just candy.

Please shop around!

Re:Some Theaters in Portland, OR charge $6.00 (0)

Anonymous Coward | more than 2 years ago | (#38579912)

You're missing the point completely. The issue is not that all THEATERS charge the same amount, but that every MOVIE at a given theater costs the same amount (once you correct for matinee, 2D/3D, etc. pricing).

Uniform pricing (0)

Anonymous Coward | more than 2 years ago | (#38579898)

This practice -- known, wonkily, as uniform pricing -- isn't specific to movies. It's true for sports, where I pay the same price for a football ticket whether the Redskins are playing the New England Patriots or the St. Louis Rams.

Many sports teams have "premium" pricing when big name opponents come to town.

For example... http://baltimore.orioles.mlb.com/bal/ticketing/seating_pricing.jsp - even standing room only tickets are more expensive when the Yankees come to town.
http://www2.kusports.com/news/2008/jan/26/kansas_raises_football_seasonticket_prices_slightl/ - Kansas actually charged four different prices for football games in 2008 - one for non-conference teams, one for conference teams nobody in Lawrence gives a shit about, one for Texas, and one for the big in-state rival Kansas State.

I realize I'm picking nits, but no, this claim made by the author is not usually accurate, and it should not be used to legitimize what movie theaters do.

Reason answered (1)

ryanw (131814) | more than 2 years ago | (#38579910)

The reason is that the price is setup to pay for the "movie going experience", paying for the theater. But the reality is that a film that was less expensive to make should cost less to see it. That would be a good idea for the industry to embrace to combat feeling like they need to have a huge block buster, huge budget film to make any traction.

Would you see YA instead of MI were it cheaper? (1)

John Hasler (414242) | more than 2 years ago | (#38579924)

n/t

They're trying to make more money, that's why (0)

Anonymous Coward | more than 2 years ago | (#38579966)

I think it has a lot to do with the fact that Young Adult is unlikely to make significantly more money if priced lower - and if it does, some of that additional revenue will probably come at the expense of revenue for Mission Impossible.

Let's assume a simple breakdown:

$10 tickets
9 people see MI
1 person sees YA
$100 total revenue

Now, instead we charge $10 for MI, but only $2 for YA; as a result, one of the MI viewers chooses YA instead, and a full additional 5 people also choose to watch YA (this is a pretty optimistic scenario)
8 people see MI
7 people see YA
$94 total revenue

The studios as a whole see less revenue even though there are many more total moviegoers (50% increase!). Many people decide to "see a movie" and then pick which movie. As such, lowering the price on one film while keeping it high on another will likely simply move some moviegoers away from the expensive film to the cheaper one. It also puts an even higher risk of failure on big budget movies. TFA suggests that movies with larger budgets will charge higher prices. I'm sure that would work great for The Green Lantern and other already-failed ventures. Forcing big budget films to compete in price as well as quality will drive far more viewers to cheaper, indie films. Why exactly would the businesses want that? Alternatively, they could attempt to set prices in advance based on their expectations of success, but if studios were really better at identifying good movies, they wouldn't make so many damnably bad ones.

Reading TFA, I would also note that the author is flat-out incorrect in one of his other 'uniform pricing' examples. Not all sports games are priced the same - pretty much every team will offer miniplans priced based on the opponents and dates of play (better opponents or weekend games = higher miniplan costs). The fact that single-game tickets are usually the same price (and not even this is always true in sports) is done in an attempt to drive consumers towards the multi-game miniplans. It's with the goal of producing more total revenue given that "seats" are an existing sunk cost. Not because the team believes that watching Lakers - Celtics or Yankees - Red Sox is worth the same as any other potential opponent.

The author mentions a couple of very specific examples, but they don't really prove his point that moving prices are good for both studio and theater. Note that in his second example in which DC theaters cut weekday ticket prices by 2/3rds, popcorn purchases double. That suggests twice as many moviegoers (unless a disproportionate number of the 'new' moviegoers hate popcorn - which I admit is possible, as they're likely the more frugal viewers given their price sensitivity). But given we don't have specific data, I think it's fair to assume overall ticket revenues for the weekdays were likely lower. Again, an illustration: $9 tickets, sell 5 = $45 revenue. $3 tickets (cut price by 2/3rds), sell 10 (2x customers), $30 revenue. That's a full 33% lower revenue on ticket prices. Good luck pushing that on the movie studios.

I'm not suggesting that the pricing is the RIGHT one. Only that the pricing is set the way it is in an attempt by the studios and theater chains to maximize *total* revenue within the system. They may be wrong, but a variable pricing model in which all movies (as opposed to the rare one-off examples TFA gives) must compete against other movies with unequal pricing will almost certainly be a less-successful model, given that the studios really just won't know how to price anything.

sports tickets work on the demand system (1)

Joe_Dragon (2206452) | more than 2 years ago | (#38579970)

Where shit teams some time just have to give away tickets and some even have deals like seats with unlimited food. Where good teams don't have that and some even have standing room only.

Now why can't movies be the same way? Some movies are the type to see on the big screen at $7-$9 /each but others why pay the same price when can you wait for PPV / VOD and pay like $5-$6 for a room full of people.

Not just movies, all "Content" (1)

rbrander (73222) | more than 2 years ago | (#38579978)

All movie *rentals*, on any medium, are also the same - and you can see the free market at work in charging you more for "New & Popular" rather than "Last Years and Older", so it's not because video store owners are unaware of the market.

Speaking of discs, the finest Springsteen album may actually be cheaper in your music store than deservedly-obscure indie bands doing death metal with accordions, because of the longer production run.

A paperback of The Da Vinci Code also sells for the same as a paperback of Lithuanian poetry.

Content just sells by different rules than physical objects. That's one of the reasons that applying physical-object valuation to the "costs of piracy" is sensed as "not right" by most people who hear the comically-high figures.

If you walk out of the rental store with a shoplifted CD or DVD, you're walking out with all the embedded value in it of the store's shipping costs, their total rent, salaries and other operating and capital costs divided by the number of discs in the store. (Which is the same whether the disc is Raiders or Norbit.) When you just take the content itself, that value is not lost.

Most Hollywood Movies are a Commodity (1)

retroworks (652802) | more than 2 years ago | (#38580000)

You dont charge different rates for different oranges, figs, corn cons. The definition of a commodity fits most movies.

Hooked on Theatre (1)

eric31415927 (861917) | more than 2 years ago | (#38580022)

Movie houses hook people into going to theatres The one-price-fits-all strategy tries to keep us from rejecting movies because either the price may be too high from a cost-benefit concern or the price may be too low from a quality concern. Going to a theatre becomes the event and the movie is simply a bonus.

Theatres in my neighbourhood have taken this one step further by offering premium seating, where seats are larger and further apart, as well as being assigned. The premium charged is $2, which, based on a recent interview on the Lang & O'Leary Exchange seems to be working well for them.

This contrasts with concert venues, which charge premiums for the more popular musical acts. Concert venues are less concerned with repeat business as profits are calculated after each show. Movie houses need repeat business in order to pay their enormous fixed costs, with profits calculated each quarter.

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