Regal Cinemas May Have You Pay More for Hits and Less for Flops

     October 26, 2017

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Theaters are desperate to get moviegoers away from Netflix. They’re not willing to put in better sound systems, stop people from being on their phones, or make the theatergoing experience tangibly better in any conceivable way, but they’re more than willing to toy with the numbers and see if they can stretch their profits through a new pricing model.

According to Bloomberg, Regal Cinemas is going to test dynamic pricing next year at select theaters. The way it would work is that you would pay more for a hit film but less for a flop. So, for example (and these numbers are just for illustration’s sake; nothing has been confirmed in terms of what Regal plans to charge), with the average ticket price at $15, you might pay $10 to see Geostorm, but you would have to pay $20 to see IT. Of course, this raises the question of how pricing would work on opening weekends. Regal could obviously charge more from the outset for something like Star Wars: The Last Jedi, but what about a sleeper hit like Get Out? Would the cost of that ticket go up following its opening weekend? And would that higher ticket price end up driving people away?

Additionally, I struggle to see how this works unless Regal’s major competitors follow suit. If I have to pay $20 to see Star Wars: The Last Jedi at Regal but I can go down the street and see it an AMC for $17, why would I pay the extra $3? Unless the geography is just too good, Regal doesn’t offer anything significantly better. By comparison, they’ll certainly beat out competitors on flops, but I guess they’ll try to make up the difference in concession sales or something. To be honest, dynamic pricing might work better to salvage movies with less heat. Audiences may not pay $15 for Geostorm, but they may be tempted to kill two hours if the film only cost $10.

It will be interesting to see how this new model develops and if Regal ends up applying it to all their theaters. The way multiplexes do business needs to change, but I’m not sure if making their pricing like airlines is the way to go.

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