Film-Tech Forum ARCHIVE: Research Says High Ticket Prices Keep Customers Away

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Posted by Mitchell Dvoskin (Member # 751) on 01-14-2015, 11:53 AM:

Fox News link

quote: "Fox News Story"

Bad news for theater owners: High ticket prices were the biggest culprit in the 21 percent year-over-year decline in domestic box office revenues last summer, research and consulting firm PwC reports today based on a survey of 1,044 consumers in October and November. Some 53 percent of the respondents cited the rising admission costs over the last five years as one of the main reasons they stayed away.

“High ticket prices are, by far, the number one reason for dissatisfaction across age demos and by movie-going frequency,”PwC concludes in its report, part of its Consumer Intelligence Series. “Despite advanced technology, better seating, improved concessions and the return of 3D movies, the negative of higher ticket prices is difficult to counter-act.” Indeed, it adds, “3D ranks last among drivers of movie attendance.”

Moviegoers spent an average of $8.08 for a ticket in Q3, according to the National Association of Theatre Owners, up 3.1% from the same period in 2013 and 3.9% vs 2012. (People typically shell out much more in cities and in the evening.)

After pricing, 41 percent said that the movies were not as interesting to them, 30 percent said they want to watch movies on their own schedules, and 29 percent said they’d prefer to spend on different recreational activities.

Consistent with the overall theme, well over half of those surveyed said that lower prices would motivate them to attend more frequently. About 23 percent said that they’d go if the movies were better while 9 percent wanted better prices for food.

You can pretty much forget enticing people with extras such as live entertainment or by offering them a digital copy of the movie. “Most of these movie perks fell flat on consumers, except last-minute ‘cheap’ seats,” PwC says. “Respondents of all ages were interested in getting a break on last-minute seats.”

Perhaps just as worrisome for theaters: 71 percent said that they were “very” or “somewhat” interested in watching new movies at home — and 82 percent said that they’d pay anywhere from $10 to $20 extra to do so.

There were glimmers of hope, though, for studios and theaters. The core movie audience, especially 18-to-34 year olds, is “strong” and can be motivated to attend more frequently, PwC says. Moviegoers generally saw three of the summer’s top 20 movies, although a third of those in their 50s didn’t see any of the best sellers.

“Since lowering ticket prices across the board is likely not a viable strategy” PwC recommends incentives including monthly movie subscriptions, last minute discounts, and — more interesting to studios than theaters — offering opportunities to watch new movies at home.

Even so, exhibitors “need to promote the benefits of the in-theater experience including the ‘night out’ and advanced technology benefits,” PwC says. Seemingly contradicting its findings about consumer sensitivity to pricing, the firm says that Summer 2014 “was an anomaly, given less interesting film options. Focusing on interesting content in relevant genres is key. And don’t underestimate the value of recommendations from family and friends.”

I don't know if I agree. As a consumer, I also think ticket prices are too high, especially in the major markets. On the other hand, I really don't believe that cost will prevent many people who want to see a movie for attending. It's easy to gripe on a survey, a better test would be to track attendance for given movies in similar economic markets, one with lower prices and one higher prices over time. I honestly doubt that price will be the significant factor.

Posted by Bobby Henderson (Member # 840) on 01-14-2015, 12:21 PM:

IMHO the general public has been feeling price gouged by more than just movie theaters. Other forms of entertainment have grown very expensive while the average consumer's income hasn't kept pace with that price inflation. Live concerts and live sporting events are among the worst in terms of extreme costs.

Last year the cable TV industry saw its first real net loss of subscribers.

Some of this is due high subscription cost inflation over the past few years. Personally, my own Dish Network bill has gone from under $55 back in 2010 to over $90 now and all while carrying basically the same programming package. This week I got letter saying my next bill will go up another $5, but Dish offered some little temporary bonus programming trinkets as a way of trying to make the price hike okay. Cable TV networks are out of control in terms of what they're charging to service providers. That one layer of removal from hearing the rage of paying customers makes them absolutely ignorant to reality.

This price gouging has greatly increased the popularity of streaming services like Netflix. My girlfriend got rid of cable a few months ago; she just streams Netflix and gets local TV channels off an antenna. One of my coworkers is getting rid of Dish to do the same thing. I like watching live sports and certain HBO series, but at nearly $100 per month it's really getting hard to justify keeping Dish or even going to another alternative.

The movie industry is heavily reliant on the age 18-35 demographic. I think the movie industry is taking them for granted. Not only is this same group into streaming movies via Netflix, many of them also know their way around illegal torrent sites. They're still going to theaters for now, but they're not above making changes if prices pass a certain threshold they see as just too ridiculous to justify.

Posted by Mike Blakesley (Member # 26) on 01-14-2015, 12:50 PM:

From my experience, I think people are more pissed about paying $14 for a soda and popcorn than they are about ticket prices...especially when the media delights in saying that the ingredients of the soda and popcorn only cost a dollar or less. (Of course, they never take all the other costs besides the ingredients into account .)

Very often, people tell me about their moviegoing experiences in other cities when they're on vacations and such. They almost never gripe about how much the tickets were, but they always, ALWAYS express amazement at the ridiculous concession prices.

We need to educate people better as to why prices are what they are. There's no way to provide all the amenities people have come to expect unless you bring in enough money to pay for it all.

Posted by Adam Martin (Member # 641) on 01-14-2015, 01:18 PM:

quote:
Consistent with the overall theme, well over half of those surveyed said that lower prices would motivate them to attend more frequently.

quote:
71 percent said that they were “very” or “somewhat” interested in watching new movies at home — and 82 percent said that they’d pay anywhere from $10 to $20 extra to do so.

The consumer doesn't know what she wants. Apparently she wants lower prices to go out, but would pay extra to stay at home.

Posted by Mitchell Dvoskin (Member # 751) on 01-14-2015, 01:25 PM:

> We need to educate people better as to why prices are what they are.

I'm not sure that will do any good, the public does not care. As Bobby pointed out, the exhibition industry is competing against other distribution channels for the same product. The "window" delay is now an insignificant factor prodding people to go out.

I think the exhibition industry as a whole needs to educate people on the benefits of going out to a movie vs watching at home. NATO and the major circuits should be using TV and the internet to promote the theatre going experience, rather than relying on the studios to promote specific movies.

> The consumer doesn't know what she wants. Apparently she wants lower prices to go out, but would pay extra to stay at home.

I think you are comparing apples and oranges. Paying a flat extra fee for a movie regardless of how many people are watching it, vs paying per person. I doubt many people would be willing to pay $10 to $20 extra to watch a movie by themselves.

Posted by Bobby Henderson (Member # 840) on 01-14-2015, 01:29 PM:

People can understand the cost of doing business, but there is no arguing a lot of first run movie theaters have really jacked up the prices on both tickets and concessions in the past few years. It seems like ticket and concession pricing has sneaked up to these levels since the surcharge fad for 3D and fake IMAX started. They bumped up the base price for everything, trying to hide it under the surcharges. Now that 3D is clearly falling out of favor and more are just paying for a "plain" show they're taking notice of those base prices.

Here in Oklahoma I hear people griping about the prices of both. They remember what ticket or a soft drink and bag of popcorn used to cost just a few years ago versus what it costs now. They also compare prices between what one theater in town is charging versus the other. Word also spreads what theaters in nearby towns are charging. Carnegie is a town not far from Lawton. The Liberty Theater there charges just $4 for tickets plus a $2 surcharge for 3D, and these are first run shows. The theater doesn't charge as much for concession items either.

quote: Mitchell Dvoskin
The "window" delay is now an insignificant factor prodding people to go out.

The rather insignificant length of the window between theatrical and home video release makes it very very easy for price conscious viewers to wait and watch at home.

We're a long way away from the times where it could literally take 1-2 years for a theatrical movie to debut on a home video format. Most people can do a 3-4 month wait easy. For anyone in their late 20's and on, where time seems to pass by faster and faster every year, 3-4 months go by in a flash.

quote: Mitchell Dvoskin
I think you are comparing apples and oranges. Paying a flat extra fee for a movie regardless of how many people are watching it, vs paying per person. I doubt many people would be willing to pay $10 to $20 extra to watch a movie by themselves.

Which is exactly why "premium VOD" will not be the cash cow Hollywood executives fantasize it to be.

Posted by Terry Lynn-Stevens (Member # 7349) on 01-14-2015, 01:41 PM:

quote: Mitchell Dvoskin
I think the exhibition industry as a whole needs to educate people on the benefits of going out to a movie vs watching at home. NATO and the major circuits should be using TV and the internet to promote the theatre going experience, rather than relying on the studios to promote specific movies

I agree with you, the industry does need to educate people about going out to the movies and what the benefit is. I am surprised the big chains have not figured out that the movie promotion is one things and "going out to the movies" is another thing.

quote: Mitchell Dvoskin
On the other hand, I really don't believe that cost will prevent many people who want to see a movie for attending.

I don't think the cost is the issue in the top end of the scale (IMAX/VIP). Where it gets a little silly is charging premiums for 3D or the PLF crap that comes with a single projector blown up on a 65 foot screen. I also do not think charging extra for Dolby Atmos is working, I think most consumer do not care. There can only be so many premium priced experiences and it really is going overboard, IMAX has had more than 8 years to build their network and like Starbucks, there can only a certain amount of premium locations.

quote: Mike Blakesley
I think people are more pissed about paying $14 for a soda and popcorn than they are about ticket prices...especially when the media delights in saying that the ingredients of the soda and popcorn only cost a dollar or less.

Around here Cineplex is setting records for the concession revenues. With their Scene program where earn points of tickets and combos, I think consumers are liking it.

Posted by Aaron Garman (Member # 1653) on 01-14-2015, 01:46 PM:

In regards to concessions, yes, they are so overinflated it's staggering. Yes, it's a cinema's bread and butter, but at what point do the high prices detract? I walk into any chain now and it's overpriced and too many choices. Are 4 sizes of popcorns or sodas really necessary?

I think the goal should be to keep prices reasonable and choices limited. People like bargains, and service can be speedy when people have just one size to choose from. At a former employer, our stand had this philosophy. While we were only selling for a single screen cinema, our per caps were terrific. Everyone bought stuff and we were able to serve them all quickly.

I think the chains over think it much to often in regards to concessions. Get back to the basics and you'll make a killing.

AJG

Posted by Frank Cox (Member # 6258) on 01-14-2015, 02:27 PM:

With regard to a choice of sizes: For many years I offered only two sizes of popcorn: Small and Large. I spent a lot of that time having this conversation: "What size of popcorn would you like?" "Medium." "Sorry, all we have is small or large." "Well, I'll have a small, then."

Very rarely did anyone decide to purchase a large after asking for a medium.

So I eventually woke up and started selling "medium popcorn." If it had been the other way around and folks always upgraded to the large, I still wouldn't have "medium popcorn", though.

Posted by Mike Blakesley (Member # 26) on 01-14-2015, 02:41 PM:

quote:
Moviegoers generally saw three of the summer’s top 20 movies, although a third of those in their 50s didn’t see any of the best sellers.

This isn't surprising, considering most of the summer movies are aimed at teenage boys.

Posted by Travis Cape (Member # 466) on 01-14-2015, 03:29 PM:

I can say that since we increased our prices, we've had less trailer trash than before. There are unintended consequences of being low price.

Posted by Justin Hamaker (Member # 2165) on 01-14-2015, 05:17 PM:

I think in many cases it's the perception the price is too high more than the actual price. If you track average ticket prices historically, they more or less follow minimum wage. Still, people remember what they used to pay for a movie as use that as a benchmark for what they pay today.

I'm not going to disagree that the prices in the big cities have probably gotten out of hand - both for tickets and for snacks. But part of that is a reflection of the high cost of building a theatre in a downtown location in these cities.

Posted by Martin McCaffery (Member # 37) on 01-14-2015, 05:40 PM:

Ticket price too high is only relevant in with respect to what they think they are getting. Clearly there are lots of people willing to shell out for whatever mega hit is available this week. Make movies people want to see (not necessarily better movies) and people will see them.
In the weird world of art films in which I exist, AMC lately here has been picking off the more popular art films (besides the ones they own pieces of). They consistently die with them, and when we show them later we consistently do much better. So there is something to be said about where people will see things and why. It has little to do with the price, as their matinee price is lower than our fixed rate.
There are so many factors affecting attendance that a claim to have discovered the single biggest reason is silly.

Posted by Jesse Skeen (Member # 586) on 01-15-2015, 02:28 PM:

In other news, it's dark outside at night.

Posted by Manny Montes (Member # 5639) on 01-15-2015, 03:48 PM:

I think the perception of value just isn't there, whether that's from hollywood churning out garbage flick with very few diamonds each year or from theaters not providing a good experience (people talking, presentation issues, rude staff, etc) or a combination of both. This plus a creeping window that keeps getting smaller, doesn't really entice people to go to the movies.

The only thing that irks me is that these surveys are usually targeted towards the older demographic, i'd like to see the ages of respondents as I have found that the older clientele has more of an issue with movie prices (I remember when it was a dollar a show, etc), even though they don't realize how wages and inflation has gone up as well. The younger demographic 18-35 is still coming out to the movies in large numbers.

As far as my opinion on it, well I always tell people, for $10 you get 2 hours of entertainment, and down in South Florida i'm not sure where else you can go for that, even bowling is much more expensive. I don't include food cost because honestly, there is nothing forcing anyone to eat at the theater (though I would love for them to). Plus if you know where to look for coupons or plan wisely (matinee, coupon books, etc), you can get tickets for $7 or $8, which really isn't that bad in my opinion.

Movie theaters will continue to evolve and add amenities (as we can see with the rise of recliners and dine in theaters this year). Hopefully with the film slate planned for this year we will see a good rebound but I am tiring of the media continuing to proclaim the sky is falling every time there is a down year [Smile]

Posted by Mike Blakesley (Member # 26) on 01-15-2015, 05:44 PM:

quote: Manny Montes
I think the perception of value just isn't there, whether that's from hollywood churning out garbage flick with very few diamonds each year or from theaters not providing a good experience (people talking, presentation issues, rude staff, etc) or a combination of both. This plus a creeping window that keeps getting smaller, doesn't really entice people to go to the movies.

I think it's the window that's eroding the value more than anything. After all, presentation issues, people talking and occasional staff problems have been with the industry ever since the beginning. The biggest difference today is cell phones. But when people know that in just a few weeks they can get that movie for $1.50 from a pop-machine-like device, or stream it in their pajamas for $5.00 or whatever, no wonder they think $8 a ticket is too much.

The online retailers aren't helping either -- in my email today I got a blurb from Amazon offering me a "pre-order" for American Sniper, which has only been out in wide release for a week or two. It had no indication of when the video would be released, but if I was a regular moviegoer my "need to see it in the theater" quotient would have gone way down. Not because the theater experience is bad, but because now thanks to Amazon, the movie just looks like another video and not something special.

quote: Manny Montes
Hopefully with the film slate planned for this year we will see a good rebound but I am tiring of the media continuing to proclaim the sky is falling every time there is a down year

Me too. One year from today the press will be full of articles that say: "What a difference a year makes! At the end of 2014, everyone was saying the theater business was dead, but the blockbusters of 2015 have proven that people still want to get out of the house to see big-screen entertainment, etc etc etc."

Posted by Manny Montes (Member # 5639) on 01-15-2015, 07:37 PM:

quote: Mike Blakesley
The online retailers aren't helping either -- in my email today I got a blurb from Amazon offering me a "pre-order" for American Sniper, which has only been out in wide release for a week or two. It had no indication of when the video would be released, but if I was a regular moviegoer my "need to see it in the theater" quotient would have gone way down. Not because the theater experience is bad, but because now thanks to Amazon, the movie just looks like another video and not something special.

I'll agree with that, and not just online retailers, I know the local wallyworld has the same American Sniper preorder pack. Not sure when this trend happened, but it seems like preordering for a digital HD copy starts as soon as the movie is released in theaters.