After numerous cinema industry consulting projects, Smart Pricer has created extensive benchmark analysis on worldwide cinema ticket pricing.
Celluloid Junkie has partnered with Smart Pricer to share and highlight some of the insights they have gained. We will begin with a high level overview in the first set of slides below.
During their work for various exhibitors Smart Pricer has identified the 5 most common ways to better tailor cinema ticket pricing to increase a customer's willingness to pay.
For instance, in the UK for cinema chains like VUE and Cineworld offer their customer a discount (up to £3.00) when going to the cinema during the week before 5 PM
Most cinemas around the world attempt to shift cinema attendance to low demand times and days by offering cheaper prices during off-peak times and slightly higher prices during on-peak times
Surcharges for PLF screens such as IMAX are usually similar or slightly higher then 3D surcharge of cinema.
It is common practice in most parts of the world to price movies differently depending on release type and screen format
€2.50 - €3.00
30 - 212 RUB (€0.40 - €2.80)
Up to £2.50 (€2.80)
Up to $5.00 (€4.00)
Applying a movie surcharge based on its popularity is occurring more and more frequently across various European markets
Movie surcharges originated for movies with longer run times, but are now in most cases based on expected demand for the movie
The surcharge typically ranges in some market regions, such as Germany, from €0.50 to €2.50 depending on the expected popularity and length of the movie
Already common practice in the airline industry with their choice between business or premium economy cabins seats, exhibitors have also started to differentiate their seats by offering premium seating (e.g. recliners)
Customers who wish to have the best experience have the option to buy wider seats with more legroom for usually between £1.80 / €2.00 (e.g. U.K.) to $5.00 / €4.00 (e.g. USA)
Exhibitors are starting to introduce segmented auditoriums, offering moviegoers various numbers of seat and price categories within an individual auditorium (usually between 2-3 different seat categories)
Provides more choice in price for customers while also saving premium seats for price insensitive customers
This means moviegoers who go to a cinema in a suburb or the countryside may pay less for the exact same film in comparison to what they would pay in a city or prime location
It is common practice for large cinema chains to apply a location-based pricing model in order to take differences in demographics and income into account
Smart Pricer would like to share in more detail some of the cinema pricing best practices they have discovered
How does it work? As new blockbusters are released they enter the highest tier. Throughout their life-cycle they drop tier-by-tier as they mature. "The Mummy" for instance moves down from the highest to the second lowest price level within two weeks.
VUE in the UK is already following a rather innovative approach to match their movie-specific pricing with the demand of a show. This is done by applying their movie lifecycle pricing logic.
The high number of price categories gives their customers more choice in price
Best seat locations are saved for price insensitive customers
Price differences up to 100 RUB (€1.40) based on seat location in the auditorium
Kinomax implemented up to four different price categories based on seat location in their auditorium in Tomsk
Location price differentiation up to $9.00 (> factor 2)
In Manhattan, NYC, moviegoers pay $17.40 for tickets to “Black Panther” in 2D on a Saturday night while in Laramie, Wyoming moviegoers only pay $8.48 for the same movie, format, day and time
Regal Entertainment follows a highly differentiated pricing model based on the market or territory of the theatre.
Product and pricing innovations such as installation of premium seats, more price categories, peak vs. off-peak pricing and movie surcharges will give customers more choice in product and price for a specific show
However, the list of surcharges cannot be extended infinitely and the current static pricing model creates inefficiencies, as it does not consider true demand for an individual show
Smart Pricer believes the megatrend of dynamic pricing is the next frontier for cinema pricing:
More on the approach of dynamic pricing in the cinema industry and first results of exhibitors like Odeon-UCI and Cinema Park, who successfully implemented dynamic pricing, can be found in the next CJ + Smart Pricer article.
- Dynamic pricing optimizes the price mix for every show over time;
- It incentivizes early bookings and reacts to the actual demand of the show;
- Implementing dynamic pricing would replace multiple surcharges with an easy to understand single price per seat for customers;
- The end goal could be dynamic pricing that is based on discrete choice models enabling individualized discounts based on each customer’s purchasing history and willingness to pay.
CJ Premiere Posts (CJ +) are a series of sponsored features created with partners in the cinema industry that we know and trust to bring information that is interesting and relevant for our broad readership.