01 September 2006

Movie game theory?

Why do all movies have the same ticket price at each theater?  You'd pay the same price to see a Lords of the Rings movie in its first week as you would for the Garfield sequel in its last week.  Why don't theaters reduce the price late in a film's run (or even early for an unpopular movie) to pull more people in?  Surely most movies have a point at which it makes more sense to lower the ticket price a little than to let the audiences dwindle until a new movie comes to take its place.  (If a showing is expected to be almost empty, it might even make sense to let people in free to sell more junk food.)

Maybe it's a prisoner's dilemma:  One movie that had its ticket price reduced might extend its run and end up making more money, but if every theater used the trick for every movie, moviegoers might start waiting for the lower price and reducing the gross revenue for every movie.  Maybe the studios realize this, if only subconsciously, and never allow theaters to use the trick in the first place.  (I used to see $1.50 late-run movies all the time in north Austin, but that place got leveled for a new Walgreens, and I've never seen a discount theater here in St. Louis.)


At 09 September, 2006 21:59, Blogger DrumRollsOver said...

Additionally, the lax restrictions that keep people from attending movies that they didn't pay to see would not be able to continue. This would force the theaters to have more staff on duty to enforce proper attendance. Theaters are designed to run on minimal staff because of the extended down time once the movies have started. Therefore, different prices for different movcies would be difficult for a theater owner to swallow.
I do however agree that theater owners do regularly miss out on extra profits to be had via the food counter.


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