One of the most frustrating parts of going to the movies is how expensive it is. Tickets cost, on average, $8.35 - yes, it costs $14 in New York, and $5 in some less densely-populated places (or at smaller theaters). But regardless of variation among location and theater, the average ticket price is climbing steadily, and faster than inflation. (Here’s a much deeper dive into that topic.) And now, in good ol’ two-oh-one-four, if I can stay home and watch a movie for $7 that’s playing in theaters for $14 (something I just did - you should check out Joe ) - and I avoid having to get to the theater, sit with a bunch of potentially loud strangers, and be forced to think about the fact that sometimes seeing movies alone is kind of sad, why should I even bother?

Yield Management

Ignore the business-school-esque vocab - yield management should be pretty familiar to you. Airlines, hotels, and BoltBus (among others) all use yield management to price their tickets. According to a source much more legitimate than Wikipedia, “the core concept of yield management is to provide the right service to the right customer at the right time for the right price.” Think buying a ticket for a flight - at certain times (mid-January), it’s much cheaper, and at certain times (Christmas Eve), it’s much more expensive. And some seats are more expensive than others. It’s effectively letting the market decide the price for a ticket - when tickets are more in-demand, they are more expensive.

But yield management, as a concept, can only be applied in particular situations. Again, according to Wikipedia (kids - find a book, this isn’t real citing), here are those conditions:

_

  • That there is a fixed amount of resources available for sale.
  • That the resources sold are perishable (there is a time limit to selling the resources, after which they cease to be of value).
  • That different customers are willing to pay a different price for using the same amount of resources. _

I’ll get to how this relates to movie tickets in a second - but you can probably pick up on it.

Movie Tickets Now

Movie tickets are, in my experience, priced much less intelligently. (If you know of any theaters that price more dynamically - I’d love to hear about it.) Usually, theaters have one of two pricing strategies:

  • Every ticket costs the same - a Friday night ticket for a 25-year-old to see The Dark Knight costs $14, a Tuesday afternoon ticket for a 15-year-old to see _The Oogieloves in the Big Balloon Adventure _ costs $14.
  • Tickets are priced according to three variations - age, time of day, and type of theater. $10 for seniors and kids, $14 for adults. $8 matinees (but only Monday through Thursday, before noon!), full-price otherwise. $18 for 3D, $20 for IMAX.

There are other variations (buying tickets in bulk, requiring discussion afterwards for cheap tickets1) but I’ll stick to the above two as those are the vast majority of what I’ve seen.

But it doesn’t have to be this way. I’ve never understood why movie theaters (especially large chains) don’t change this strategy - by and large, they sell out certain movies on Friday and Saturday nights, and the theater is empty for other movies, and for other times. They’ve already paid for the screening of the movie - you might as well fill the room.

A Better Way

Movie tickets fit the above criteria for yield management - there’s a fixed amount (of movie screening times), they are perishable (movies only stay in theaters for so long), and, though I haven’t done the research, I’ll make the assumption that different customers are willing to pay a different price (maybe not a perfect assumption, admittedly).

So here’s a better way of selling tickets - to make them cheaper (better for us, the customers), and to sell more (better for the theaters, and ultimately, the studios):

Make the pricing dynamic. In my view, it’d be based on three things:

  • Time bought (i.e., buying early is better)
  • Demand (i.e., how many tickets have already been sold)
  • Seat location

You can throw in any number of variables, but I wanted to keep it simple.

Here’s the way it’d work:

Every seat has a range of prices, and you have to buy reserved seats (like a flight, a concert, etc.). Let’s take the best seat in the house - center, to the middle (you can argue that forever - but let’s just assume it is). This seat always starts at $10, and can be as expensive as $15. Other seats have different ranges, based on what’s most popular. The price changes as two things change - days until the screening, and the number of tickets already bought. So the most expensive ticket you’ll ever buy is the $15 best seat in the house, as the last ticket, on the day of the screening. As tickets are bought elsewhere in the theater for that screening, the price of that seat goes up and up - the movie is clearly in demand. And as it gets closer to that screening, it also climbs in price - better to buy early.

This would have a few effects:

  • Theaters would fill earlier. If it’s cheaper to buy in advance, people will do that. This guarantees revenue ahead of time for the theater - this is good for the theater.
  • Movies that people don’t want to see would be cheaper. If no one’s buying tickets for a movie, it’ll be cheaper for the customer who does want to see it. The Dark Knight _should cost more to see than the _Oogieloves - it’s more in demand.
  • Times that are less convenient would be cheaper. Tuesday afternoons will end up being cheaper than Friday nights - and again, they should be. They’re less in demand.
  • Crowds would spread across screenings and movies. For the same reasons as above, if it’s cheaper to see certain movies at certain times, people might end up going to those screenings instead of the Friday night blockbuster.
  • Movies would be cheaper in the weeks after release. If the opening weekend is the most popular time to see a film, it’ll also be the most expensive. It should be cheaper to go see something in its fifth weekend of release.
  • More people would go to the movies. In theory.

Of course, I’m fully extrapolating here - I don’t know any of these things for certain. And this doesn’t account for the likeliest reason it hasn’t happened yet - theaters may not make more money. But this model has been successful across other industries, and, in my thinking, would possibly change the cultural perception of theaters as overly-expensive nights out. It’s worth thinking about in more detail (believe me - I intend to). I just don’t want to see a night out at the movie theater become a night out at the Broadway theater - a once-a-year treat for people who can afford that sort of thing.

( Note: A few services for cheaper movie tickets do exist. Two of the ones I’ve found are MoviePass (monthly subscription, unlimited movies - think Netflix) and Dealflicks (“Priceline for movie tickets”). Just by the description, Dealflicks seems to hit on some of what I’m saying - but the pricing has a lack of transparency/logic, so you can’t actually tell why something is cheaper. Ideally, the theaters themselves would use dynamic pricing - that’s the only way I see it spreading throughout the industry.)
_______________________

1Disclaimer: I do this, and it’s pretty great.