$10 for Catwoman?
March 4, 2005 4:42 PM   Subscribe

Standardized movie ticket pricing. Why must we pay the same price for an Uwe Boll movie and a Martin Scorsese film? Economic professor Tyler Cowen explores the reasons that movies big and small, good and bad, are priced the same.
posted by Arch Stanton (16 comments total)
He's wrong. Movie tickets are all the same price because every movie is a gamble--for the viewer and the studio.

If studios priced a new movie cheaper, or started putting it "on sale" after a couple of days of bad sales, they'd risk labeling movies that might later turn out to be "breakaway" movies (which they previously could have made millions of dollars on selling tickets at full price, in this hypothetical scenario) as automatic losers, thus losing viewers.

They'd also risk *not* making automatic money off shit made by Jerry Bruckheimer, who mainly uses exciting previews to convince people that his movies are going to be good.
posted by interrobang at 4:53 PM on March 4, 2005

I think he missed one. Theaters have a finite number of screens and for a good movie they're pretty much going to sell most seats for most showings. The flop will be mostly empty at the normal price but it'll have a short run. If people are willing to pay less to see it presumably it wouldn't flop, or wouldn't flop so hard at least. The movie theater would maximize it's profits by displacing the otherwise flopping movie with something that could potentially be a hit.
posted by substrate at 4:56 PM on March 4, 2005

I've always wondered why niche arty films with small but committed audiences don't charge more than mass market product. I know that I'm willing to pay a lot more to see something that stays with me for a long time than for something that may distract me for two hours and I then forget. In a way it would be pricing according to the intensity of your pleasure rather than according to the activity itself. It works for drinks and books. Perhaps it would help to finance those smaller movies.
posted by liam at 5:35 PM on March 4, 2005

But who would quantify "the intensity of [the audience's] pleasure"? Who would determine which films earn higher prices? It seems that the factors that would determine different ticket prices are too nebulous and subjective to lend themselves to a fair system. What if a small film develops crossover popularity with a mass audience? Does the price go up? And who is to say that there are no commercial films that are worthy of their ticket prices? You have to presume that some people prefer Uwe Boll to Martin Scorcese, so why be elitist about it?

The whole issue seems fraught.
posted by margarita at 6:27 PM on March 4, 2005

I'll have to spend some time thinking about where I read it (I know it was a book, not online), but if my memory is correct variable pricing (as least over the run of a picture if not by title) was common in the early decades of the 20th century.

But looking at the list of suggestions it appears he doesn't differentiate enough between the studios (which indirectly affect pricing) and the theaters (which set the pricing).

And his expectation is that movies should sell for cheaper initially and then go up in price as time goes on, which is the opposite of what actually happens. Movie is $10/viewing for the first month and then $5/viewing for months 2 and 3 when it hits the second run theater and then $3/double feature when it hits the smaller town third-run theaters at month 3 and then $18.99/unlimited viewings when it is put on DVD.

And it is good to see blog entries here as it is so much more convenient to discuss in a forum where the author won't get in the way by responding.
posted by obfusciatrist at 6:41 PM on March 4, 2005

Who would determine which films earn higher prices?It seems that the factors that would determine different ticket prices are too nebulous and subjective to lend themselves to a fair system.

The distributors or movie theatres could determine the price. They would charge in each place (and time) what they think would best serve their particular ambitions (which may or may not be purely short-term gain).
posted by liam at 6:57 PM on March 4, 2005

Or we could pay on the way out what we thought the experience was worth.
posted by IndigoJones at 7:01 PM on March 4, 2005

One ticket, one vote. Each vote is equal. No one forces you to watch Catwoman. And, on the flip side, wouldn't you be pissed if you went to see the $20 and it stunk, when you could've paid five to get into something you'd really enjoy?

interrobang has a very good point.
posted by Eideteker at 7:46 PM on March 4, 2005

John Waters, ever the populist, suggested that films that expect a large audience charge less, while art house films should charge more. Jerry Bruckheimer? Eight cents. Robert Bresson? Forty bucks. Waters' suggestion makes economic sense to me for a number of reasons, but the most compelling aspect of his proposal is the penalization of film snobs.
posted by psychoticreaction at 7:48 PM on March 4, 2005

Interrobang: The thing is, there's no way that the studios would do this. It would have to be an independent action of the theaters. (Which, I'm not really sure if they have the ability to change prices, but I think they could.)

Think about it though...I saw Alone in the Dark with a friend during it's second weekend. There was one other person in the theater. If they'd cut the cost in half, I'm sure they would have had more people there. Lots of people (including me) enjoy watching utter shit every once in a while.

Note -- I realize that I am a dumbass for paying matinee price for AitD. Please do not point out that I am furthering the career of a madman, intent on destroying the movie potential of every video game ever made.

posted by graventy at 8:41 PM on March 4, 2005

Word of Mouth is such a powerful influence ... in recommendations for films, books, music, restaurants, wines and websites ... you name it!
posted by ericb at 8:48 PM on March 4, 2005

obfusciatrist, you're right. variable pricing was standard in the early 20th century and the practice continued until the early '70s. There are two links in the article that go to some rather dry commentary on the former pricing system, but the information contained is summarized in #6.

I think that the system of variable pricing would initially be very successful for the cheaper movies and would only work for the extremely anticipated films (Star Wars III, Lord of the Rings, etc.). However, once the system was re-initiated back in the public conscience, the results would be less so. Would someone be willing to pay $15 for I, Robot? Probably not.

Also, would a studio be willing to admit that it's 'event film' is not quite of that stutus? At first glance, the Hulk or Godzilla would naturally be of the $15 caliber, but with bad buzz, it wouldn't make sense to have the high dollar cost for them.

As psychoticreation said, the arthouse films would naturally benefit from this. Especially the ones in limited release. What film fan wouldn't want to pay $20 to see Crouching Tiger in the only theater in town that plays it in a packed theater? Or even a smaller movie would benefit because people would be willing to fork over a couple bucks for the unknown struggling auteur.

And if the pricing were up to the theaters, I would expect immediately for every movie to be $5 or less. Popcorn and pop would stay the same and the cost for pre-moving advertising would skyrocket and the theater chains would make billions. Naturally, this would fizzle out as the $5 movie becomes commonplace.
posted by Arch Stanton at 8:51 PM on March 4, 2005

We still have variable pricing. We have matinees, and we have second-run independents, and midnight movies, and the college circuit and the rental and sell-through VHS/DVD markets. There are discount cards, summer passes, internet coupons, and pre-sale knockoffs. That isn't the same as it used to be, but it's hardly represented a reduction of consumer choice. Theaters have changed a lot since the days of the Last Picture Show -- from the mall shoebox to the 30-screen cornfield palace, we have a business that has adapted to a wide variety of consumer interest (and in the process, has brought the arthouse movie to the American boonies: trust me, it's where I grew up). The pricing stays the same because the fixed costs are the same, per showing. In fact, theaters have a lot of sunk costs in terms of predicting and paying upfront for rentals. (That's one reason for all the advertising, and the outrageous concession prices.)

It's ridiculous to say that because you personally would pay more for, say, Sideways, that it should be priced higher. That certainly makes no sense to the theater owner who would rather reduce the price to get as many seats filled as possible. It's the blockbusters like, um, like we used to have in years before 2004 that the owner would increase prices for -- because there's less elasticity of consumer interest for a blockbuster. People want to see it anyway, the first night if possible. But generally theaters are barred from "profiteering" in this manner. (Bringing us back to concession prices.)

Frankly, paying full price for a movie is, almost, for suckers. Something like paying full price for delivery pizza, or cereal.
posted by dhartung at 9:40 PM on March 4, 2005

All movies eventually take discount coupons. Some will take them right from opening night, others after a varying period of exclusion. At least that's how it works around Toronto.

So the discount coupons are exactly equivalent to a variable price mechanism. The "beauty" of the discount coupon system is that people who are price sensitive can pursue the coupons (like my favorite: 25 air miles = two for one admission) while people who can't be bothered get milked for full price.
posted by Chuckles at 9:50 PM on March 4, 2005

Ummmmm, no, dhartung, we all don't.

We get first run pap, and the only variability is -$1 for matinee and cheap popcorn on Tuesday nights.

The "arthouse" in town is currently showing the new Phantom of the Opera. Draw your own conclusions there.

No discount cards, although there is student pricing (our town bends over for the local college, which specializes in cranking out liver-damaged ex-alcoholics with dubious math skills).

Summer passes? What is this summer pass you speak of?

Internet coupons? I'm lucky to get the right times out of our local chain's site.

Pre-sales? Nope.

Midnight movies? Not a one.

Frankly, paying full price for a movie is, almost, for suckers. Something like paying full price for delivery pizza, or cereal.

I generally try to avoid vitriol, but I hate such cosmopolitan remarks so rife with arrogance. Not all of us get to live in bustling hubs of science and industry like you do.

posted by Samizdata at 10:35 PM on March 4, 2005

Interesting links & discussion. Thanks Arch.
posted by dhoyt at 9:16 AM on March 5, 2005

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