How Do You Feel About Dynamic Pricing?

There was an interesting article on Slashfilm a few weeks ago about an experiment Regal Cinemas will soon test. They’re going to try out dynamic pricing, which means they’re going to potentially charge more for movie tickets during peak periods (nights and weekends) and less for movie tickets during weekdays.

The article hypothesizes that the dynamic pricing could also extend to the popularity of movies themselves. Like, Regal may charge $15 for a Star Wars ticket versus $5 for an indie film or a movie in its 6th week in the theater.

The concept of charging less during non-peak periods is something I’ve seen in local theater chains. At St. Louis Cinemas theaters, all 2D shows on Wednesday are $5, for example. I’ve never heard of charging more for a specific film, though.

I like pricing economics, and I’m curious to see the results of the experiment. My personal experience with movies is that if I’m excited about a movie, I’m going to find a way to see it. Price will not impact my decision or my experience–I’m motivated by not having to wait in line.

As for other people, my guess is that there are some people who might be slightly more motivated to go to a movie if they found out it was cheaper than average. They would need to have that information delivered to them somehow, though, either digitally or displayed at the movie theater (are there still people who show up at a theater not knowing what they’re going to see?).

However, I believe the number of people who will be motivated and happy to see some discounted films is much smaller than the number of people who will be angry if they learn they’re being charged more to watch something that’s selling well. Even though this model works in many other industries, it’s too different from what we’re accustomed to finding at the movie theater.

But we’ll see. What do you think? Would you be more likely to see Three Billboards Outside Ebbing, Missouri if tickets were $5 instead of $10? Would you be angry to learn that your Justice League tickets are $15 instead of $10?


5 Responses to “How Do You Feel About Dynamic Pricing?”

  1. Charles Dionne says:

    It’s a very interesting experiment that surely will make people upset about having to pay more to see the most popular films but, in the end, I believe that people want instant gratification and will be willing to pay the extra dollars to see the newest Marvel movie as soon as it comes out. I’m sure the theater company has thought of how easy it is these days to have twists or plot points spoiled on the internet so it incentivizes people to see movies as quickly as possible. I’m also really curious to see how this affects concession sales. If people are spending more money for the tickets, will they be less willing to pay the exorbitant concessions prices? Will people stop at the dollar store to fill up on candy and bring them in with them instead of getting a $7.50 small popcorn?

    I wish I could say this will have a profound effect on me but I already seek out indie movies, usually go on $5 matinees thanks to my work schedule, and wait, in most cases, a couple weeks before seeing a movie because I tend to prefer a quiet auditorium. Sorry Regal but you won’t be getting more money from me! 🙂

    One last thing I want to mention is the other really interesting pricing experiment I’ve seen recently and quite literally the exact opposite of this. The Movie Pass program (https://www.moviepass.com/) lets you watch “unlimited” movies for a monthly price ($6.95 as of this morning). You can only watch one movie in a 24-hr period, and only see each movie once, but it seems like something I’d be much more interested in. Have you heard about it, Jamey? Any thoughts?

    • Jamey Stegmaier says:

      Charles: That’s a great question about the impact on concession. That’s where movie theaters make their money.

      I have heard about Movie Pass, and it’s intriguing to me. I can’t quite understand how it’s sustainable, but we’ll see. 🙂

  2. Sean says:

    The problem I think that many people have with this, is that Regal films had the budget films and times for movies already in many of their theaters. What they are getting at with dynamic pricing is that the $15 Star Wars ticket, will be $20+ if you want to see it on the opening night.

    Right now they are testing the market by increasing/decreasing the price for $1.

    In the end movie theaters make most of their money on concessions. I’d rather them roll out a deal where you buy the ticket, and get a voucher/credit for concessions, which allows them to guarantee how much they’d would bring in for each seat, but at the same time be cheaper if you buy the bundle rather then separately.

    Then if you go to the theater and not buy any concessions your ticket is going to be more expensive.

    Its part of the reason I like the Alamo draft house model. Decent food, meals drinks, served to you in your seat. You can go to the movies, have your dinner, and pay roughly the same you as you would going out to a both separately.

    • Jamey Stegmaier says:

      That’s an interesting idea regarding a voucher for concessions. Like, if you buy a ticket for Star Wars on opening weekend, it’s $15 instead of $10, but you get a $5 discount at concession.

  3. Joe Pilkus says:

    Jamey,

    In a way, this concept is no different than what technologists refer to as early adopters. Some folks will run out and get the Apple 21, while others will wait to see if there are glitches and for a better price point. There are, admittedly, few movies for which I would pay top-dollar to see.

    Cheers,
    Joe

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