It works for Uber, Broadway shows, concerts, flights and the hospitality industry, and now ‘dynamic pricing’ (more commonly known as ‘surge pricing’) may be coming to cinemas with Regal Entertainment Group planning to test the concept in its cinemas. The major exhibitor says it will team with ticketing startup Atom Tickets for trials in several markets.
Numerous proposals have been made in the past for the idea of variable pricing models in the cinema, and with exhibitors facing plunging stock prices along with challenges from streaming and subscription models like MoviePass, something like this was bound to be attempted sooner rather than later. Regal CEO Amy Miles told analysts during the company’s third-quarter earnings call that the test would begin in early 2018:
“If an alternative pricing model is going to be successful we believe that one, it must provide a clear economic benefit to both exhibitors and our studio partners, and two, it should provide a compelling value proposition for our consumers.
This test could be the first step towards a pricing model that drives incremental revenue in peak periods and incremental attendance in non-peak periods. 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.”
In practice this would likely mean higher prices for blockbusters, especially on opening weekend, and lower prices for unsuccessful films or movies a few weeks into their release cycle. Year-to-date box office revenue is down more than 5% from last year and is at risk of declining for the first time since 2014 short of spectacular results in November and December.