If you went to the movies over the weekend, you may have shelled out a little extra to see “The Batman.”
In a surprising break from industry standard, AMC Entertainment, the country’s biggest theater chain, boldly announced plans to charge customers about $1 to $2 more for “The Batman” tickets compared to other movies playing at the same time. It is not clear how the experiment, a version of variable pricing, paid off because AMC did not break down ticket sales versus attendance levels in any of its 620 domestic theaters.
But AMC was spot-on about the popularity of Robert Pattinson’s take on the Caped Crusader in “The Batman.” The Warner Bros. comic book adaptation generated a mighty $128.5 million in its opening weekend at the domestic box office, the second-biggest debut of the pandemic. And AMC locations accounted for eight of the top 10 highest-earning theaters in North America for “The Batman.” That does not necessarily mean the circuit benefitted from higher prices (AMC venues are typically the top-grossing in the country), but it also doesn’t appear to have given AMC loyalists sticker shock.
As the domestic box office slowly rebounds from COVID-19 disruptions, should consumers expect to continue to pay more for big-screen blockbusters?
Box office analysts say yes, incrementally increasing prices may be the new normal, at least when it comes to big blockbusters. Theater operators have long wanted to test a range of ticket prices, and the ongoing pandemic became the catalyst to finally get creative. In fact, it may have begun earlier than people realized. Privately, insiders wondered why AMC announced the move with such fanfare because Regal Cinemas and Cinemark Theatres, the No. 2 and No. 3 chains, have already quietly jacked up prices, starting with “Spider-Man: No Way Home” last December.
That means moviegoers should expect to cough up extra to watch Jared Leto’s anti-hero adventure “Morbius” (April 1), Marvel’s “Doctor Strange and the Multiverse of Madness” (May 6), “Top Gun: Maverick” (May 27), “Jurassic World Dominion” (June 10) and other big-budget tentpoles slated to release in theaters over summer and beyond. For movie theaters, it’s a way to offset stagnant attendance levels as they attempt to claw their way out of pandemic-related wreckage.
“Movie theaters are fighting to recover revenue, so every single dollar helps,” says Eric Handler, an analyst MKM Partners who covers the media and entertainment industry. But, he adds, “increasing prices isn’t necessarily a way to improve attendance.” What theaters really need, Handler argues, is more people going to the movies. Additional foot traffic usually means more spending on concession stand snacks. For theaters, the real money is in popcorn and soda sales.
AMC Entertainment did not respond to Variety’s request for comment.
Those in support of higher prices for blockbusters point to inflation; it’s more expensive to get gas or go to a restaurant, why shouldn’t it be more expensive to go to the movies? Others fear it could scare away customers. Through trial and error, cinema owners will have to figure out how much they can increase a ticket price before patrons begin to resist.
Jeff Bock, a movie theater industry analyst with Exhibitor Relations, says someone who goes to the movies infrequently may not even notice a slight upcharge. At the same time, surges between 50¢ and $1.50 may not be cost-prohibitive to average consumers. What’s another dollar when you’re already spending upwards of $16 to see the newest release in major towns like New York City or Los Angeles?
“Fanatics are going to [be willing to] pay a premium on a superhero movie,” says Bock. “The price point is low enough that you can tack on additional dollars to these huge Hollywood popcorn flicks.” There’s a tipping point, Bock warns, meaning movie theaters may not be able to egregiously lift prices (think $5 or more) without getting pushback.
There are other reasons for skepticism about fluctuating prices. Charging a higher fee for some movies could signal to audiences that others without the uptick aren’t as good. Studios can’t tell a movie theater what price to charge, but they can influence their cut of ticket sales. (Major studios and theaters traditionally split revenues 50-50, but in some cases the film’s distributor can take as much as 60%).
“If you say this movie is worth $1.50 more, are you saying some movies are better to see than others? Are studios going to be enthusiastic about that when their doesn’t get premium surge pricing?” Handler asks. “There’s a bit of a balancing act going on.”
Dynamic pricing, where the cost fluctuates depending on the movie or time of day, has historically been a point of contention for the movie business in North America. In 2019, AMC similarly gambled with new pricing initiatives, where the circuit would charge a premium for movies “of the highest appeal” and less for “off-peak” films.
Industry insiders have wondered if the current surge constitutes dynamic pricing, because in this scenario ticket buyers aren’t necessarily being offered a chance to pay less for certain movies. Instead, theaters have newly instituted markups on big films, but they have not mentioned anything about lowering prices on indies or movies that have been around for weeks. For example, lower budget films like Channing Tatum’s canine adventure “Dog” or “Jackass Forever” are the same price as “Spider-Man: No Way Home” and Tom Holland’s video game adaptation “Uncharted.”
But the picture gets a little murkier. That’s because discounted tickets aren’t exactly a novel concept. Theaters across the country regularly offer lower priced tickets on Tuesdays, since it’s a slower time of week, and at matinee screenings. A key difference is those markdowns aren’t film-specific, they apply to whatever is playing in theaters. The major chains, AMC, Regal and Cinemark included, have also unveiled cost-effective monthly subscription packages. Moreover, the company’s CEO Adam Aron says European theaters have successfully experimented with pricing for years.
“This is all quite novel in the United States, but actually, AMC has been doing it for years in our European theaters,” Aron said during the company’s recent earnings call. “Indeed, in Europe, we charge a premium for the best seats in the house, as do just about all other sellers of tickets in other industries — think sports events, concerts and live theater, for example.”
AMC and its rivals know that comic book fans are going to pay virtually any amount to watch “Thor: Love and Thunder” (July 8), “Spider-Man: Across the Spider-Verse” (Oct. 7) or “Black Panther: Wakanda Forever” (Nov. 11) on the big screen. But a recent study indicated that 8% of pre-pandemic audiences may never return to theaters, and film industry experts fear those people could be the ones discouraged by rising costs.
“I don’t think it does anything to raise attendance,” Bock says. “When you raise prices, you’re going to lose people. It’s a sign that AMC says we’re not getting those people back, but we can use the audience we have to bolster us.”