Why Do All Movie Tickets Cost the Same? 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?"
Parking garage (Score:0, Insightful)
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?
The other way around (Score:4, Insightful)
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.
False supposition (Score:5, Insightful)
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?
Not the same... (Score:5, Insightful)
Re:Prices ARE different (Score:5, Insightful)
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.
demand is set by the number of theaters (Score:2, Insightful)
Interesting question (Score:5, Insightful)
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:Prices ARE different (Score:5, Insightful)
I bet some enterprising theater owner might just start doing that after reading this article IF the SAG or the MPAA doesn't have some anti-competitive rule against it.
Re:Scale (Score:5, Insightful)
I'm pretty sure it would work like wine - people would avoid the cheap ones.
I see a serious flaw in your reasoning. Bronco Wines (makers of Two Buck Chuck) sell more wine than any other California winery, especially ones like Opus One and Silver Oak; Yellow Tail Wines sell more wine than all other Australian wineries combined.
Re:Prices ARE different (Score:5, Insightful)
Gas prices that change every few minutes or food prices that change every few minutes are also perhaps both possible and optimal by the same theory. It may be that we'll see those, but people like being able to predict without effort what the cost of a ticket will be. Likely my local favourite theatre could make more money on a few tickets, but mostly I suspect people who are considering the value of the individual ticket would often pass on the same price they purchase now.
If you go to the grocery store and see milk priced at $8.95/gal when you saw it the day before at $1.98/gal, then you'll remember that higher price vividly. If it happens often enough for something you planned on purchasing, then you're likely to start shopping for milk somewhere else, even if the average is a little higher, because the security of being able to make the planned purchase is worth the higher stable price.
I have a couple choices of theatres to choose from, and if they were pricing some tickets at $18.50 and others at $9.48, then I'd be more likely to look at alternatives, considering the potential value of the movie rather than basing my purchase on my preference of theatre.
Movie tickets aren't really where the profit is anyway, profit comes from people like me who purchase the experience including overpriced (but surprisingly tasty) food and drink. I really enjoy the dining+bar+movie experience much more than the movie alone, else I'd be waiting until the movie was in the local $1 theatre.
Re:Prices ARE different (Score:5, Insightful)
They tried, years ago in a trial run somewhere. Customers hated it. Why? A few reasons: One, marking down the price sends the message "this movie sucks!" whether it's true or not, and nobody will go to see it. Two, people will feel like you're extorting them by charging more for the good movies (just like Coca-Cola found out when they decided they could add thermometers to Coke machines and charge more when it was really hot out).
Three, people LIKE it being predictable that a movie always costs X; it turns out in fact people don't like having to do complicated 'well would movie A be worth $10, or should I see movie B instead for $%' calculations. This makes the decision-making much more complicated than "which of these movies do I want to see".
A great many media have discovered more or less the same thing. DVDs, books, audio CDs, movies, video games
Perceived value (Score:5, Insightful)
Movie prices are all the same because the studios/distributors set them to be the same; it's not up to the cinema owner to decide, because the box office goes almost entirely to the distributor.
So why do the studios set them the same? A big part of it is "perceived value". If they priced Young Adult at half the price of Mission Impossible, a substantial segment of the market would conclude that MI was a "better" movie than YA. It would be perceived as a demonstration that the studio doesn't have faith in YA and figures that they only way they can get people to see it is by "bribing" them with a lower price. In a market where opening-weekend sales are critical to a movie being financially successful or not, studios need to hype each product as "the best". (It's the same reason why the top-grossing half dozen movies each weekend are further hyped as "#1 gross-out comedy in America" or "#1 action dramedy" for the entire following week.) With variable pricing, you'd also have studios trying to use higher prices as a selling point. Suppose you have two CGI action films to choose from, one priced at $14, the other at $11. The first one must really be good if they're charging that much for it! And even if the cheaper film has 10% higher attendance, the more expensive film still outgrosses it and gets the bragging rights for the weekend.
Re:Prices ARE different (Score:4, Insightful)
What's different now is that I can get a Bluray from Redbox for $1.50 a night and watch it on a 60" television in my living room. I have to return it, but then again my home has reasonably priced snacks, and I can have a beer with my movie.
Re:Prices ARE different (Score:4, Insightful)
Which means you then have help in avoiding giving your money to the theater industry in the future. Hell, you can buy the damn movie and watch it at home, in comfort, with better food, all for cheaper than paying for two tickets, a couple drinks, and a bucket of popcorn.
Re:Prices ARE different (Score:5, Insightful)
If those people are too thrifty to suffer the complete movie theatre financial dick-punck, maybe they're not in the theatre in the first place. Maybe they're at home, grabbing the latest cams and eating cardboard flavoured store-brand popcorn and watery store-brand cola.
How many times have I looked at a theatre's "now showing" list for 10 minutes before deciding there wasn't anything worth seeing for $13 ? Even for blockbuster titles, I have a hard time justifying the expense unless I'm truly psyched about the movie, because the last time a movie gave me $13.worth of entertainment was 1998. I've watched several hundred movies since then, but they just fall short of expectations, very short.
Today's writers just don't know what the fuck they're doing anymore, it's all these ADD-afflected JJ Abrams types who can't juggle a single idea in their head long enough to carry it through. Few movies are either fun or thought-provoking from start to finish, the great majority are cheap whores that quite literally cram 90 seconds worth of punchy trailer material inside a hastily-edited snooze sandwich, with a "what-the-fuck" ending you can see coming before you even set foot inside the lobby. Poster with a guy and some chick staring into the distance ? SHE'S GONNA LOSE HER BABY (then get it back). There, I'm a fuckin' writer now, where's my goddamned Prius and Vitamin Water ?
I would love to see figures for unfilled seats, because most of the times I've been to the theatre, a week or two after release, there have been maybe 30-50 seats filled out of 600+, so it seems there's a big mindless rush on opening night, and then nothing for the remainder of the 6 to 12 week run. Six shows a day, and even if you rolled them all up into one, you'd still be half-empty. I'm not saying they should expect to sell out every show, every day, but 35% occupancy is usually a good baseline for other entertainment venues. How much money are they throwing down the drain with these shows nobody watches ?
If I look at indie theatres, they're packed four nights a week. Tickets are $6 to $8, popcorn and a large soda for $7, and they rarely screen garbage because with a single screen, they have to make it good or else they're going to bleed money that week. Okay, so the latest blockbuster probably won't be screened here until 4-6 weeks after its first run, but what do I care ? Do I need to watch MI4 right this freakin' second ? The megaplexes need to take a clue from the little guys and go back to a moviegoer-centric model, instead of their current role as Hollywood's captive gimp. Give US what WE want, and tell Hollywood to shape up or slip out. There are hundreds of thousands of films out there, spanning over a century, and a few of them are even worth seeing. Even if they stopped making movies forever, theatres could show old stuff and bring in audiences. I would absolutely love to see some 80's and 90's favorites on the big screen; hell I'd even pay to see Hardware with a bunch of B-movie dorks cheering on the bad robot, or bizarro classics like Spider Baby. Just because something is new, doesn't mean it's good.