At What Price Entertainment?December 14, 2011
How much do you pay to see a movie?
At one time, "the cinema" was viewed as one of the most economical forms of entertainment. My grandfather told of times when he could get into a Saturday matinee double feature for a nickel. (Okay, so a nickel was worth a lot more back then, and those were silent films.) More recently, when I was a kid back in the late '70s and early '80s, I could buy a ticket to a 1 p.m. showing for $2 and spend the whole day there, watching the same movie over and over. One time, for Star Trek II, a friend and I saw the movie 3 1/2 times, starting in the early afternoon and finishing up in the evening. We got some strange looks from the ushers who came in to clean out the theater in between screenings, but no one said anything. Try doing that today...
Popcorn was $0.75 and a soda was about $1. Candy bars were hugely overpriced as they still are. I don't know anyone who bought candy from a theater concession stand; everyone brought their own. To take a family of four to the movies at an evening showing, it probably cost between $20 and $25. Admittedly, that's in 1982 dollars; a conversion to 2011 dollars would yield something in the range of $50 to $60. So is that what it costs today to pack up the wife and kids and spend an evening at the megaplex? Not quite.
Three factors have driven increases in movie prices. The first, and most obvious, is inflation. However, over the period from 1982 to 2011, annual inflation has averaged a tick under 3%. Prime-time movie tickets in 1982 cost between $3 and $5, depending on where you saw the film. A rural one-screen house was $3. An urban, state-of-the-art multiplex was $5. Boxofficemojo lists the average ticket price (which takes into account matinees) for 1982 as $2.94. We'll round that up to $3 for simplicity, keeping in mind that, for an evening show, that would be at the low end. Using a pure inflationary calculation, that $3 ticket should cost $7 today. Know any place where you can see a 7:00 p.m. movie for $7? I don't. The cheapest around here is $9.50. So other factors are at work.
Movies are seen differently today than they were in 1982, especially during the summer. In 1982, the concept of a yearly "blockbuster season" was relatively new, having only begun in the mid-1970s. (Common wisdom says that Jaws started it all in 1975, and Star Wars cemented it two years later.) Today, blockbusters are viewed as "destination movies," and are priced as such. Theater owners recognize they can charge elevated prices for big movies without depleting their potential audiences. Even in a down year, there are a certain number of films almost everyone wants to see, whether it's the next Batman or Harry Potter or James Bond. Theaters price to those titles and, because there isn't a multi-tier schedule of admission costs, it becomes a "one size fits all" pricing policy. So movie-goers pay the same elevated rate to see an anemic September movie as they do a big ticket May one.
Finally, there are surcharges. To see something in 3-D or IMAX will cost an extra $3 to $5 (depending on your locale). To see it in 3-D IMAX will be more. Some theaters offer reserve seating, and there's a surcharge ($1 or $2) for that. One wonders whether theaters will someday become creative and offer a surcharge to see a movie that starts on time with no pre-show commercials or trailers. (I know there are people who love trailers, but I would appreciate it if a movie being posted to start at 7:35 actually started at 7:35 instead of 7:52. If I want to see a trailer, I'll find it on-line.) Or a surcharge for a theater that blocks all cell signals. The possibilities are limitless; there's just a question of how much people will pay for them.
Concessions are no longer limited to popcorn, soda, and candy. Sitting in a packed theater can sometimes become an olfactory assault as the stench of fake butter mixes with the odors of fried foods, onions, and hot dogs. This kind of fare is okay in an open-air ballpark but it can be stomach turning in the confines of a motion picture auditorium. Nose plugs should be offered free with tickets. Theaters, however, want patrons to spend money on overpriced concessions because they don't have to share the proceeds with the studios. To that end, they now offer enough "variety" so un-health-conscious families can eat meals at the megaplex - no need to go to the fast food joint next door. You can get just as much fat and just as many calories without venturing out the door.
Technically, the average multiplex/megaplex policy is one ticket for one movie. So if you go to a theater and want to see three movies, you're supposed to buy three tickets. I am probably the only person who does this. That either makes me naively honest or incredibly stupid - probably both. It's not enforced for one simple reason: money. Someone who surfs theaters and spends the entire day moving from auditorium to auditorium is likely to spend a lot of money at the concession stand. The profits made from that trump what's lost in ticket sales. The studios don't like this but they're not on the front lines. Theaters will start policing multi-movie binging when the studios provide them with the manpower to do so.
Time to total up the cost of going to the movies for a family of four in 2011... I'll examine three scenarios. In the first, the family is cost-conscious. They go to a regular 2-D matinee showing in an older multiplex (8 screens or fewer). For their snacks, they rely on the standbys - popcorn (shared) and a soda (not shared). On this austerity plan, they should be able to get by for about $50. Not outrageous.
The second scenario has the family going to an average (2-D) movie on a Friday evening. In addition to popcorn and sodas, they get a couple of "specialty" snack items (nachos and chicken fingers). The total for this evening out runs close to $80. Borderline outrageous.
Finally, let's consider the big spenders. They go to the biggest, loudest megaplex in town (20 to 24 screens) to see a 3-D IMAX movie and buy deluxe snack "meals" for each member of the family. The price tag for this night out will come out north of $120. Outrageous.
To my way of thinking, the idea of paying $120 for Mom, Dad, and two kids to see a movie - any movie - is ridiculous. Even $50 sounds expensive in today's market. Wait a few months and own it on DVD for about 1/3 of that price. In fact, buy a couple of movies, pop some popcorn, get a bag of chips and a bottle of soda and you can replicate the theater experience at home without the sticky floors and annoying distractions. Plus there's a double feature and you get to keep the movies.
Perhaps the strangest thing I have recently noticed about movie ticket prices is that, as the economy has been sputtering, they have actually risen. Even without the surcharges, they have gone up as much as 20% in the last two years after being relatively stable for the better part of a decade. There are two AMC theaters within easy driving distance of my house. One, an 8-plex that opened in 1984 (or thereabouts), still charges the "old" prices, which have been in effect there since the early '00s. It's $5 for a morning movie, $7 for an afternoon matinee, and $9.50 for a night showing. They have two 3-D theaters and charge $12.50 for a 3-D movie. The other theater is a newer 24-plex (opened about ten years ago). They use the "new" prices, which were phased in over the last 24 months. It's $7.50 for morning shows, $9 for afternoon matinees, and $12 for nights. The 3-D surcharge is $3, the (fake) IMAX surcharge is $4, and the 3-D (fake) IMAX surcharge is $6. Bottom line: without traveling more than 10 miles, I can spend anywhere between $5 and $18 to see a movie at a theater.
During the 2008 recession, there was not a noticeable decline in attendance, leading Hollywood and the theaters to adopt the foolhardy belief that their product was recession-proof. So, in that case, why not be audacious and try raising prices? After all (the thinking went), if people were going to see movies regardless of the economy, why not squeeze out another dollar? But 2008 was a banner year for desirable titles, and the robust box office numbers created the illusion that the industry was in perfect health. The next few years would tell a different story. Attendance began falling in 2009 and the trend continued into 2010. This was probably not a result of increased prices but of a growing disenchantment with the movies themselves. So, in order to camouflage the problem, theaters again hiked ticket prices (by 50 cents to $1.50). Since news outlets generally report only box office gross (rather than tickets sold), this increase at least partially offset the drop in attendance. And that's where we are now, and why going to the movies costs more today in absolute terms than it did 30 or 50 or 80 years ago.
Is it worth it? That's really a topic for another column. There are those, however, who claim that the experience of seeing a film in a theater trumps all other concerns. To them, home viewing, even on a great system, is a pale replication of how it should be. On the other side are the home theater advocates who avoid multiplexes in almost all cases, arguing that watching something on Blu-Ray is preferable in every way. Each side has their points. Before I had a kid, I was very much in the "see it at home" camp. Now, I can understand the value of theater viewing. The different environment, despite the occasional unwelcome distraction, sharpens my concentration and allows me to focus in a way I might find difficult to do at home.
Even at $18 per ticket, movies are still inexpensive relative to other forms of out-of-the-house entertainment. The cheapest major league baseball ticket I can buy is $20 and most good seats are $30 and up. Football and hockey seats are higher than that. A Broadway play can easily cost >$100. Plus, neither Citizens Bank Park nor any playhouse is as close or convenient as a half-dozen theaters. So movies are a bargain, but there's a warning to be heeded. Customer dissatisfaction with the titles being offered is beginning to spike. The slide in attendance has been too consistent to be considered a blip. Unless the product is improved (anticipation is the key ingredient), there will be more empty seats. Viewers need a reason to be excited about going to the movies in a way that has not been evident in several years. Additional increases to ticket prices will not go unnoticed - we're probably close to the "tipping point" now. The entire movie industry should be working to avoid the multiplex doomsday scenario: What if viewers decide en masse that they're not getting good value for the price of a ticket? A careful analysis of the box office gross numbers reveals we may be getting close to finding out the answer to that question.
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