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TOPIC: "Event" Pricing

"Event" Pricing 20 Dec 2009 16:41 #33021

  • muviebuf
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Well the multiplexes in my area have now taken to calling the $3.00 per ticket upcharge for digital 3D ....."Event Pricing". That makes the average ticket price in my area for 3D at $12.00 a head (children and adults alike). All 3D are now "events". (Somehow I have trouble calling My Bloody Valentine in 3D an event). And of course if everything is an event then soon that designation will cease to have any special meaning.

My family has been in this business ever since projectors had cranks and there is one thing that is a universal truth..... Every time you raise the admission prices ..... while you do get a short term bump .... in the long term you just end up with the same dollars over less people.

But exhibitors never seem to learn.
Last Edit: 20 Dec 2009 16:46 by muviebuf.
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Re:"Event" Pricing 21 Dec 2009 12:16 #33026

  • leeler
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my 3D charge is exactly half of that. I don't call it an event charge either
"What a crazy business"
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Re:"Event" Pricing 21 Dec 2009 16:48 #33028

  • Mike
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I'd call it 3-D fee and let it go. 75 K has to come from somewhere.
Michael Hurley
Impresario
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Re:"Event" Pricing 21 Dec 2009 20:13 #33030

  • BWT
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Well, running the numbers year-to-date from BoxOfficeMojo, it looks like box office revenues are up ~8% of so through the 51st week of the year.

If we do some back of the envelope math, i'd say that:

2008 NATO Avg Ticket Price: $7.18
My Estimate, Avg 3-D Surcharge: $2.50

Avg 3-D increase to ticket price: +34.8%

I know the following is some pretty simplistic math, but given that the 3-D surcharge is driving ~35% of the y/y increase in box office revenues, that means that the remainder is going to be attendance.

Backing out the 3-D surcharge increase, looks like attendance is up probably 4% or so versus 2008 through this week.

I'm not sure if the argument that the increase in 3-D price is taking 'more money from less attendance' holds much water given the stats so far this year.

This is just my opinion, but my guess is that 3-D films are 'events' that help drive and/or bring back people to see movies that they may not have in the past. I know that the data so far isn't conclusive since there were only ~10 or so 3-D films this year, but as the release slate grows in 2010 and beyond, the data should hopefully become a bit more indicative of whether or not 3-D is helping drive incremental attendance, or simply dollars on less tickets.
Last Edit: 21 Dec 2009 20:15 by BWT.
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Re:"Event" Pricing 21 Dec 2009 21:01 #33031

  • muviebuf
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BWT - there is a fallacy in your basic assumptions. Your calculations are being based on the fact that non 3D ticket prices have somehow remained static from 2008 to 2009. I think when the data for 2009 is released you will find that the average (non 3D) ticket prices have increased at least 4% and that total attendance (tickets sold) in 2009 are essentially static compared to 2008. That is what has happened for the last several years.
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Re:"Event" Pricing 21 Dec 2009 21:29 #33032

  • slapintheface
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attendance for 2009 is up slight .....
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Re:"Event" Pricing 22 Dec 2009 01:43 #33033

  • BWT
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@muviebuf

(I'll caveat all of the following with a reiteration of the fact that this is solely my guesstimate...real stats from NATO for '09 could prove me completely wrong!)

You are exactly right in that my math is based on the assumption that non 3-D ticket prices are effectively flat in 2009 as compared to 2008. The reason I'm making that assumption is because over the past ~30 years, the compound average growth rate for ticket prices has been only ~10-15 basis points ahead of inflation over the period of 1980-2008, according to NATO and MPAA box office data.

Comparatively, actual ticket sales have grown at a CAGR of roughly +1% per year over that same period (1980-2008), which is basically in-line with population growth.

Also, if you look at the historical average attendance figures from the MPAA/NATO for the past 4 decades, the the population of movie patrons is generally increasing over time, not decreasing:

Avg Annual Attendance by Decade (in millions)
1970-1979: 985.3
1980-1989: 1,117.0
1990-1999: 1,261.3
2000-2008: 1,440.0

Now the 2000 decade average is probably skewed a bit too high given that admissions peaked at 1.6 billion (highest ever in my 1970-2008 data set), but the general trend even if the 2002 and 2003 admissions were normalized to a certain extent is still upward for ticket growth to a greater extent than ticket pricing excluding inflation.

Over time, especially with a gradual growth of the 3-D film release slates in 2010+, I hope that we're going to see an uptick in attendance at the same time as an temporary increase (my guess 3-5 years duration) in pricing power for the theater owner.
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Re:"Event" Pricing 04 Jan 2010 11:22 #33070

  • muviebuf
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The average ticket price that I have seen quoted for 2009 is $7.46 up from the $7.18 in 2008.
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Re:"Event" Pricing 04 Jan 2010 15:01 #33073

  • RoxyVaudeville
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The subject originally being discussed here was EVENT PRICING. Higher prices for 3D presentations being justified because they are special events, and what it does for actual attendence.

Yes, attendence was up in 2009. A large portion of that does seem to have come from 3D sales. This helps to make 3D look like a major benefit for the industry. But will it for the long term? Currently an event picture can be used as an excuse for the higher price. Some here have suggested that as more and more 3D films are released on a regular basis, more people will be attracted to come to the movies, and due to the higher ticket prices, a more lucrative profit margin will become available for theatre owners.

Let us not forget, that when 3D films come out on a regular basis, they will no longer be events, and justifying a higher ticket price will become more difficult to do.

I hear a lot of rumblings now from people throughout the community about how expensive it is to take a family to the movies at the first run theatres. It has reached close to the $100.00 mark, depending of course on the size of the family. If the industry thinks that converting to a 3D format with higher admission prices as the norm, will bring more people in on a regular basis, I think they are mistaken. Yes, there will be that bump for a while, but then the attendence figures will fall again.

There are many who will say: So who cares... as long as the grosses are up, and profits as well.

I'm not complaining, as this is a great thing for me. The higher the first run prices, the more people they send to me. With a $3.00 ticket price and a $3.00 maximun concession price, I'm the biggest bargain around. BUT... low prices don't guarantee success. Most in the industry say that 2nd run is dead. The problem is that most 2nd runs are operated at 2nd rate theatres, or even worse... as real dumps. If you operate a 2nd run as a 1st class, or even better then the 1st run competition, thay will come... and they do. :)
Last Edit: 04 Jan 2010 20:50 by RoxyVaudeville.
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Re:"Event" Pricing 04 Jan 2010 16:34 #33074

  • SMMORRIS
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I am sure I should already know the answer to this question, but when you charge $7.00 for admission plus a $3.00 upcharge for 3D or as called here "event pricing" do you pay your film rental on the $7.00? or on $10.00?
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Re:"Event" Pricing 04 Jan 2010 22:05 #33075

  • Keweler
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$10.00
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Re:"Event" Pricing 04 Jan 2010 22:33 #33076

  • rufusjack
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And if you use Real3d you cannot deduct thier fee before calculating film rental right?
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Re:"Event" Pricing 05 Jan 2010 09:34 #33077

  • sevstar
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Based on current distributor contracts. The amount you charge the customer. Is the amount you pay film rent on.
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Re:"Event" Pricing 05 Jan 2010 12:24 #33078

  • rodeojack
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That's not entirely correct.

If your business pays state or local income and/or admissions taxes, that part of the admission can be deducted from your gross. That is in all studio contracts.
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Re:"Event" Pricing 05 Jan 2010 13:06 #33079

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Agreed about any added taxes not being counted towards total gross to distributors. IE: If your charging the customer $7.00 a ticket and then have a 5% sales tax of .35 total paid by customer is $7.35 the gross amount of the sale provided to the distributor would be $7.00 not $7.35
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