Let's all go to the lobby, and get ourselves a... half price ticket.
September 28, 2010 12:33 PM
Over the past year or so, I've noticed a tremendous number of free or deeply discounted movie ticket deals. As a filmgoer, I love it -- but I don't recall seeing anywhere near this many deals in the past. What are the economics of the firms providing these discounts?
2 for 1 tickets on Fandango through Visa Signature. 2 for 1 tickets through movietickets.com through Chase Freedom. $20 for 4 tickets through Weekly Cinema. $4 tickets through other Internet coupon sites. Free tickets with every few boxes of pudding. (Yes, some of these deals are no longer ongoing.)
Prices at the box office have risen in the last year, but there seem to be a tremendous number of deals which have brought ticket prices for coupon clippers down to late-90s levels. Many of these free tickets aren't even limited-use passes -- they're codes that can be used to do online ticketing for new films and expensive 3D films. While there have always been promotional passes, I haven't seen anything like this in terms of the quantity of deals and the amount of money the tickets are being discounted.
Now, I know that movie theaters make up for low ticket prices with concessions -- I'm not worried about how movie theaters stay in business. I just find it strange that the cost of movies is actually going down for coupon-clipping types given the number of discount movie deals out there. Is this here to stay, or are we in a discount movie ticket bubble?
How are the merchants, credit card companies or coupon sites obtaining discount tickets? Is there a "wholesale" ticket price that's around $3-$4 a ticket that Fandango or movietickets.com are offering those who buy tremendous numbers of tickets? Or are these deals where lots of folks are taking a loss just because it's an attractive freebie, that the studios or the ticketing sites are using as a loss leader for future business?
Inquiring minds want to know.
2 for 1 tickets on Fandango through Visa Signature. 2 for 1 tickets through movietickets.com through Chase Freedom. $20 for 4 tickets through Weekly Cinema. $4 tickets through other Internet coupon sites. Free tickets with every few boxes of pudding. (Yes, some of these deals are no longer ongoing.)
Prices at the box office have risen in the last year, but there seem to be a tremendous number of deals which have brought ticket prices for coupon clippers down to late-90s levels. Many of these free tickets aren't even limited-use passes -- they're codes that can be used to do online ticketing for new films and expensive 3D films. While there have always been promotional passes, I haven't seen anything like this in terms of the quantity of deals and the amount of money the tickets are being discounted.
Now, I know that movie theaters make up for low ticket prices with concessions -- I'm not worried about how movie theaters stay in business. I just find it strange that the cost of movies is actually going down for coupon-clipping types given the number of discount movie deals out there. Is this here to stay, or are we in a discount movie ticket bubble?
How are the merchants, credit card companies or coupon sites obtaining discount tickets? Is there a "wholesale" ticket price that's around $3-$4 a ticket that Fandango or movietickets.com are offering those who buy tremendous numbers of tickets? Or are these deals where lots of folks are taking a loss just because it's an attractive freebie, that the studios or the ticketing sites are using as a loss leader for future business?
Inquiring minds want to know.
It sounds like there must be a lot of empty seats in a lot of theaters, even when a film is only showing on one screen in the multiplex. Empty seats are bad. Filling them, even at a deep discount, is better than having them empty. After all, having more people in the theater doesn't require them to use more electricity to run the AV equipment.
They want to fill as many seats as possible, at the highest prices possible. They know that their potential customers are widely varied in terms of their willingness to pay, so they do what they can to segment the market and get more money from people who are willing to pay more, and accept less from people who are only willing to pay less. Basically, they make it really easy to get tickets if you're willing to pay full price, but also possible to get cheaper tickets if you hunt around for deals. The more successful they are at segmenting the market, the less money they leave on the table. This is a basic idea behind all sorts of sales and coupons.
posted by jon1270 at 1:25 PM on September 28, 2010
They want to fill as many seats as possible, at the highest prices possible. They know that their potential customers are widely varied in terms of their willingness to pay, so they do what they can to segment the market and get more money from people who are willing to pay more, and accept less from people who are only willing to pay less. Basically, they make it really easy to get tickets if you're willing to pay full price, but also possible to get cheaper tickets if you hunt around for deals. The more successful they are at segmenting the market, the less money they leave on the table. This is a basic idea behind all sorts of sales and coupons.
posted by jon1270 at 1:25 PM on September 28, 2010
inturnaround, most of these deals have been valid for films within the first two weeks, even for movies listed as "no passes." That's part of what's stemming my curiosity -- these new discounts have been much better and with much more lenient terms than free or discounted movie ticket deals I've encountered in the past.
posted by eschatfische at 1:34 PM on September 28, 2010
posted by eschatfische at 1:34 PM on September 28, 2010
Movie theaters are like airlines: the majority of their expense is fixed, and has to be paid even if no one buys a ticket. A seat that is empty doesn't bring in any revenue at all. A seat sold for a discount price is better, even if it brings in less money than one sold for full price.
The difficulty is that you are effectively undercutting your own price, and may end up selling at a loss. Some airlines did, and ended up out of business. Most airlines now have extremely sophisticated computer packages which manipulate ticket prices almost on a minute-to-minute basis in order to maximize income. The goal is to sell every seat, and to sell as many of them at full price as possible. But discount ticket sales are still better than no sale at all.
Sounds like the movie theaters are in the early stages of that process now, trying to fill seats at discount prices rather than leaving them empty and earning nothing from them.
posted by Chocolate Pickle at 1:39 PM on September 28, 2010
The difficulty is that you are effectively undercutting your own price, and may end up selling at a loss. Some airlines did, and ended up out of business. Most airlines now have extremely sophisticated computer packages which manipulate ticket prices almost on a minute-to-minute basis in order to maximize income. The goal is to sell every seat, and to sell as many of them at full price as possible. But discount ticket sales are still better than no sale at all.
Sounds like the movie theaters are in the early stages of that process now, trying to fill seats at discount prices rather than leaving them empty and earning nothing from them.
posted by Chocolate Pickle at 1:39 PM on September 28, 2010
IIRC, movie theaters don't make a whole lot of profit from getting asses in seats--concessions are where the real money's at (apparently the markup on popcorn is greater than that of printer ink). So anything that brings people in to buy popcorn and soda is going to be seen as a potential source of revenue.
posted by calistasm at 2:31 PM on September 28, 2010
posted by calistasm at 2:31 PM on September 28, 2010
Yes, more than half the profit comes from the concession stand.
Why the discounts? If you haven't noticed, we've been in an extended period of sucky cinematic offerings for some time now. Coupled with the steady increase of people avoiding the cinema, using Netflix instead and watching it on the home plasma screen, the moviehouses are desperate to get people inside.
posted by Rash at 5:36 PM on September 28, 2010
Why the discounts? If you haven't noticed, we've been in an extended period of sucky cinematic offerings for some time now. Coupled with the steady increase of people avoiding the cinema, using Netflix instead and watching it on the home plasma screen, the moviehouses are desperate to get people inside.
posted by Rash at 5:36 PM on September 28, 2010
The moviehouses are desperate to get people inside.
It's curious, however, that in the early '50s with the invention of television, movie theaters added more offerings -- double features, 3D gimmicks, "The Tingler", Cinemascope, etc. -- to try to get people in. Yes, they're trying 3D and IMAX, but those have been around a while.
posted by Gucky at 3:19 PM on October 5, 2010
It's curious, however, that in the early '50s with the invention of television, movie theaters added more offerings -- double features, 3D gimmicks, "The Tingler", Cinemascope, etc. -- to try to get people in. Yes, they're trying 3D and IMAX, but those have been around a while.
posted by Gucky at 3:19 PM on October 5, 2010
This thread is closed to new comments.
posted by inturnaround at 1:11 PM on September 28, 2010