In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about AMC Theaters' new dynamic and variable pricing for movie tickets and its effect on the entertainment, media, and sports industries.
You can read the full column below.
Dynamic pricing has been used in the sports realm for several years. It is where sports teams have ticket prices that not only fluctuate based on the traditional location of the seat (courtside or suite versus top deck, e.g. nose bleed seats), but also based on the day of the week, venue, and the opponent. Dynamic pricing allows teams to charge more for desirable seats, but less for fans that want to experience the game and do not mind less desirable seats.
Movie theaters are now considering a similar arrangement with dynamic seat or variable pricing. Theaters already have fluctuating pricing based on the time of day (matinee vs. evening or primetime, generally after 6:00 p.m.) or even the day of the week. Some theaters have lower pricing on days in the middle of the week. The new dynamic pricing would mean that individual seats would have different pricing (back row, front row, middle row, etc.). Some local and smaller luxury theaters already have dynamic pricing, which is specific to theaters that are provided at a premium (e.g., waiters and waitresses to your seat, food menus and drink delivery, reclining and leather seats, etc.).
With the use of analytics, a seat could also fluctuate on price by the busyness of the specific showing. Meaning, if the showing of the particular film is crowded, the prices would go up—charging people a premium to fill the remaining seats. AMC’s Sightline Program used during the Premiere and Opening Weekend of Tom Brady’s 80 for Brady saw prices rise $1 to $2 dollars based on the location and view of the seat inside the theater. Moviegoers, executives in Hollywood, actors, producers, and directors have all had different reactions to the price increase. AMC has promised that the price increase is temporary to see how attendees react.
For one, studios, streamers, and theaters all need to find ways to keep their businesses moving forward and that sometimes includes increasing the price. Nonetheless, there is something about the theater being a place where every seat was the same price and it just came down to how soon one purchased a ticket. The more popular the movie, time, and day, usually meant less inventory and selection. Sports games work the same way except that there are more distinguishing factors in seats as a ballpark, arena, or stadium that are much larger than a theater.
Theaters struggled through the Covid-19 Pandemic, but have recovered somewhat with box office hits like Top Gun: Maverick and Avatar: The Way of Water. However, streaming continues to grow as people’s appetite for new content seems never-ending. If premium pricing can be an example of success, it has been proven that people with the resources are willing to pay more for premium (e.g., the early release of a film on a streamer), which is a similar phenomenon to music and entertainment film content streaming. Essentially, people prefer no advertisements or delays in content watching or listening and are willing to pay more for it.
The issue going forward is the creation of different classes of people watching movies—then again theaters are smaller and it is hard to find a really bad seat. The question is really one of more or a little less comfort based on a small price difference per person. If implemented correctly, theaters could benefit tremendously from the increase in revenue and exclusivity created, which can be balanced by access on certain days and times (and the fact that someone who pays $1 or $2 dollars more than another would be sitting next to or one row in front of another person). Theaters should also look to broker deals to provide exclusivity windows for films or even popular docuseries or documentaries that would typically be only streamed and popular sport events that serve as exclusive game watch venues.
About Jeremy M. Evans:
Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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