Mindful Marketing
  • Home
  • About
    • Mission
    • Mindful Meter & Matrix
    • Leadership
  • Mindful Matters Blog
  • Engage Your Mind
    • Mindful Ads? Vote Your Mind!
  • Expand Your Mind
  • Contact

Movie Ticket Madness:  Should Choice Seats Cost More?

3/12/2023

0 Comments

 
Picture

by David Hagenbuch - professor of marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 

When you need to get away from others for a little alone time, there’s a place you can go:  the first few rows of a movie theater.  Soon, however, those neck-wrenching seats may be occupied as the nation’s largest movie theater chain implements premium pricing for its cinemas’ more coveted seating.  But, is it right to suddenly charge extra for something that’s been free to audiences since Garbo and Gable graced the silver screen?  
 
Many moviegoers are likely giving a two-thumbs-down rating to AMC Entertainment, the world’s largest cinema chain, for its recent announcement that it will charge higher prices for more sought-after middle-of-theater seats.
 
It’s natural for anyone who pays their own hard-earned money for things to dislike price increases, especially when there seems to be no reason beyond a business’s realization, “We can charge for that.”
 
Movie theaters, however, have endured very hard times over the past decade.  First, streaming services and home entertainment centers lured away from theaters many who realized they could enjoy a cinematic experience in the comfort of their own homes.  The pandemic’s quarantines and social distancing exasperated that trend.  Most recently, inflation has caused many consumers to monitor more carefully their discretionary spending.
 
To call these events “challenges” is like calling Tom Hanks “some actor.”  Rather, they’ve been existential threats, as Cineworld unfortunately knows.  Last September, the world’s second largest movie theater chain and owner of Regal Cinemas, filed for Chapter 11 bankruptcy.
 
Maybe premium-priced seating is something movie theaters must do to stay solvent.  In many other industries, such variable pricing is a staple of their revenue streams:
  • Live theatre, concerts, and sporting events have long charged more for better seats.
  • All kinds of service providers, from car washes to hair salons, demand more for higher levels of service.
  • Many goods producers charge more for their premium products and more sought-after brands, for instance, automakers are well-known for various trim levels (DX, LX, ELX, etc.) and some, like Toyota, offer higher-end vehicles under a different brand, e.g., Lexus.
 
Ultimately, most product pricing decisions come down to supply and demand.  Whether they’re from Gap or Gucci, products that are in greater demand tend to cost more.  As price rises, quantity demanded decreases, helping ensure that supply can keep pace.
 
In free markets, businesses decide what they want to sell, and consumers choose what they want to purchase.  No one has to go to a movie theater or when there, purchase a premium seat.  It’s their choice to do those things, which makes it hard to argue that AMC is in any way acting unfairly.
 

Picture
 
So, charging more for certain cinema seats probably isn’t unethical, but is it really an effective business strategy?
 
A main problem with the premium approach is likely consumers’ perceptions ingrained from years of cinematic experience.  For more than a century, moviegoers have freely chosen their theater seats, including those in the center.  It’s hard to suddenly start charging for something that people have been getting for free, especially when an upcharge seems unwarranted.
 
In contrast, the seats in the very front of the theater seem like they should cost less.  In fact, why do theaters even have those close-up seats that few people choose and that have been mocked in sitcoms like Seinfeld.  Of course, theaters need to cover substantial retail space leases and other expenses, which means fitting in as many paying patrons as possible.  However, to demand the same admission price for such suboptimal seating is a big ask.
 
Here’s what movie theaters should consider instead:
  • Raise ticket prices slightly, across the board:  Again, no one likes price increases, but people who want a true cinema experience can tolerate a modest increase.  Moreover, they can understand the need to do so, given the unique pressures theaters have been under, outlined above, and because they see many other organizations doing the same.
  • Discount the close-up seats:  As just mentioned, these seats are significantly less valuable than any others in the theater.  Other events often offer discounts on seats with obstructed views, etc.  Movie theaters could do the same, or they could get creative and give patrons who sit in those seats something extra like a coupon for a free small soft drink or a popcorn-size upgrade.  Consumers may even perceive such incentives as more valuable than a small ticket price discount, and the freebies could be less costly to the theater companies.
 
In a free market, it’s not inherently unethical for AMC or other movie theater chains to charge more for choice seating, but such a strategy probably won’t sit well with consumers, who have chosen those middle seats for free for so long.  For that reason, the ending of this cinematic story will likely be “Simple-Minded Marketing.”
​

Picture
Subscribe to Mindful Matters blog.
Learn more about the Mindful Matrix.
Check out Mindful Marketing Ads
 and Vote your Mind!
0 Comments



Leave a Reply.

    Subscribe to receive this blog by email

    Editor

    David Hagenbuch,
    founder of
    Mindful Marketing    & author of Honorable Influence

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014

    Categories

    All
    + Decency
    + Fairness
    Honesty7883a9b09e
    * Mindful
    Mindless33703c5669
    > Place
    Price5d70aa2269
    > Product
    Promotion37eb4ea826
    Respect170bbeec51
    Simple Minded
    Single Minded2c3169a786
    + Stewardship

    RSS Feed

    Share this blog:

    Subscribe to
    Mindful Matters
    blog by email


    Illuminating
    ​Marketing Ethics ​

    Encouraging
    ​Ethical Marketing  ​


    Copyright 2020
    David Hagenbuch

Proudly powered by Weebly