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http://variety.com/2017/film/news/regal-entertainment-demand-based-pricing-movies-1202599097/
The Regal Entertainment Group exhibition chain will test demand-based pricing for film tickets in several markets early next year through its partnership with mobile ticketing app maker Atom Tickets.
The move could lead to higher prices for blockbusters and lower prices for unsuccessful films. Three-year-old Atom, backed by Disney, Fox, and Lionsgate, has been pushing chains to take such a step. Amy Miles, chief executive officer of Regal Entertainment, made the announcement during an earnings call Tuesday with analysts.
“We expect to conduct a ticket pricing test in several markets in early 2018,” she said. “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 drive incremental revenue in peak periods and incremental attendance in non-peak periods.”
Miles did not identify the specific markets for the test. “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,” she added.
“In a challenging third-quarter box office environment, we were pleased that our ongoing focus on customer amenities had a positive impact on our market share and operating metrics,” Miles said.
Tuna Amobi, an equity analyst at CFRA Research, told Variety that he was not surprised by the announcement about dynamic pricing.
“It’s a question of when, not if,” he added. “Dynamic pricing has been proven to work in the airline, hotel, and live entertainment businesses so this is a positive. Movie chains can definitely be much more effective in how they price because the underlying technology has gotten a lot better.”
The Regal Entertainment Group exhibition chain will test demand-based pricing for film tickets in several markets early next year through its partnership with mobile ticketing app maker Atom Tickets.
The move could lead to higher prices for blockbusters and lower prices for unsuccessful films. Three-year-old Atom, backed by Disney, Fox, and Lionsgate, has been pushing chains to take such a step. Amy Miles, chief executive officer of Regal Entertainment, made the announcement during an earnings call Tuesday with analysts.
“We expect to conduct a ticket pricing test in several markets in early 2018,” she said. “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 drive incremental revenue in peak periods and incremental attendance in non-peak periods.”
Miles did not identify the specific markets for the test. “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,” she added.
“In a challenging third-quarter box office environment, we were pleased that our ongoing focus on customer amenities had a positive impact on our market share and operating metrics,” Miles said.
Tuna Amobi, an equity analyst at CFRA Research, told Variety that he was not surprised by the announcement about dynamic pricing.
“It’s a question of when, not if,” he added. “Dynamic pricing has been proven to work in the airline, hotel, and live entertainment businesses so this is a positive. Movie chains can definitely be much more effective in how they price because the underlying technology has gotten a lot better.”
