As movie-ticket sales continue to decline, theater chains are trying to find new ways to sell the cinema experience. AMC Theatres has been adding reserved seating at locations nationwide, with some screens offering a “prime” option with fancy leather recliners. The Alamo Drafthouse is expanding across the country with a model based on food and drink service, one that other smaller indie theaters are starting to embrace as well. But Regal Cinemas, which belongs to the second-largest theater chain in the country, is going for yet another approach: surge pricing.
Under an “alternative pricing model” the company will pilot in several markets in 2018, Regal will charge more for tickets to movies people want to see, and less for under-attended flops. It’s a dynamic approach that calls to mind the airline industry, live theater, or apps like Uber. The thinking goes—especially in smaller markets where viewers don’t have other multiplex options—that customers will feel compelled to pay more to see a Marvel movie or Star Wars, the kind of experience audiences still flock to the theater for. Essentially, popular films will be held hostage to prop up declining profits.
“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,” said Amy Miles, the CEO of Regal Entertainment, in a statement. “This test could be the first step toward a pricing model that drives incremental revenue in peak periods and incremental attendance in non-peak periods.” Though she did not specify where the tiered pricing would be tested, Miles claimed it would be a “compelling value proposition for consumers.”