America's second-largest movie theater chain, Regal Cinemas, will begin testing demand-based pricing for movies in 2018, with blockbusters costing moviegoers more than box office letdowns, Bloomberg Pursuits reports. "Changes to the historical pricing structure have often been discussed but rarely tested in our industry, and we're excited to learn even more about how pricing changes impact customer behavior," explained Regal CEO Amy Miles.
Theaters across the country have struggled to sell movie tickets due to the proliferation of streaming services like Netflix. Regal reported Tuesday that its revenue has dropped 12 percent from 2016, although it credited a slow movie year for the disappointing numbers. First quarter movie ticket prices in 2017 were at an all-time high, with the average film costing $8.84, The Hollywood Reporter writes.
(Atlas)
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While Regal will begin demand-based pricing next year, other theaters could soon follow. “It's a question of when, not if," equity analyst Tuna Amobi told Variety. "Dynamic pricing has been proven to work in the airline, hotel, and live entertainment businesses so this is a positive. Movie chains can definitely be much more effective in how they price because the underlying technology has gotten a lot better."
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