Why Do All Movie Tickets Cost the Same?

gambit3 sends this quote from The Atlantic: "Like tens of millions of Americans, I have paid money to see Mission: Impossible, which made $130 million in the last two weeks, and I have not paid any money to see Young Adult, which has made less than $10 million over the same span. Nobody is surprised or impressed by the discrepancy. The real question is: If demand is supposed to move prices, why isn't seeing Young Adult much cheaper than seeing Mission: Impossible?"

Comments

It's the studios' fault

[PCM2]

Yes, but why not? For any given movie, at a given cinema, at a given time, there's an optimal price that maximizes profit: charge a little more, and you discourage enough people that you end up with less profit; charge a little less, and while you may get more customers, you still end up with less profit.

If it were practical to determine this optimal price, any rational cinema would charge it.

You've hit the nail on the head. A rational cinema might charge that price, true. But the cinema business is not strictly rational, any more than any other media business is (think: "agency model" pricing for ebooks).

Some in the UK may remember when the founder of EasyJet proposed to do just what is suggested. He wanted to create a chain of theaters that priced seats based on demand, in much the same way that EasyJet prices airline seats. Theoretically, you'd be able to see a first-run movie for as little as £0.20, depending on time, date, and how well the screening was showing. He couldn't do it, however, because he couldn't reach agreement with the film studios over a flat-rate pricing scheme that would allow him to set his own prices for seats.