business news in context, analysis with attitude

by Kevin Coupe

Bloomberg reports that movie theater company Regal Entertainment Group plans to test what is called “demand pricing,” charging more for movies that people want to see and less for flops.

It would be, the story notes, “a big change for an industry that typically uses a one-size-fits-all approach.”

Bloomberg goes on to point out that this is a reaction to an unpleasant reality for traditional movie theaters: “Shares of cinema chains have been pummeled by falling attendance and threats to the traditional Hollywood movie model, with more people staying home to watch streaming services like Netflix Inc. Studios, also hurting, have been pushing to make new movies available in homes sooner -- cutting the window of exclusivity that theaters enjoy.”

Now, as someone who goes to the movies more than the average person, I completely understand the business difficulties facing the movie theater companies. But I am of two minds about this approach.

I do think that no matter how little you charge for some movies, it isn’t going to make the vast majority of people want to see them. Lousy movies are lousy movies, and cheap tickets won’t compensate for them being lousy.

But … I also think that not all flops are lousy movies. Sometimes, movies don’t generate audience support simply because of timing. Movie history is replete with examples of films that were not successful when first released, but have gained in reputation with the passage of time and the gaining of perspective. So maybe it would help some of those films if the price of a ticket were reduced.

But where I think the argument generally falls apart is when the movie companies think that declining attendance is about the price of a ticket. I don’t think that’s the case. I think it is about having options, and about being unsatisfied with the quality of the product.

That ought to be the Eye-Opener.
KC's View: