Commentary

Movie Theatres' Future 'Surge' Pricing: Lessons For Premium Streamers?

Uber-ization is coming to a movie theater near you.

High-demand periods -- on the back of big movie-studio releases -- could mean higher, variable pricing in U.S. movie theaters, according to AMC Entertainment, the largest U.S. cinema owner, said Adam Aron, CEO, AMC Entertainment Holdings, during a recent earnings phone call.

AMC has started up what is “surge” pricing, in effect, for people in North America to see “The Batman”-- that is, charging more to moviegoers for a film based on demand for that movie.

How much? It came to $1 to $1.50 over a period of eight days, according to the Hollywood Reporter.

While this kind of "surge" pricing won't exactly be that of an Uber ride -- where the ride-share company could, at times, charge double the price for the same trip under its "surge" model -- it could be what movie customers may come to expect in the future.

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It's not just AMC -- Cinemark Theaters and Regal Cinemas are also experimenting with surge pricing.

All this comes at the movie theater business is finally finding some solid footing coming out of two years' worth of a pandemic.

One can't discount that two years' worth of major movie theater revenue declines of 70% or more are not also factoring into this equation.

Down the road, one has to believe movie studios may be looking at different structures when it comes to having their roughly 50-50 revenue-sharing deals with movie theaters in the future -- especially when factoring in that movie studios are already shifting many adult-skewing, low-special effect movies to run exclusively on their premium streaming platforms.

And if movie theaters focus on really big blockbuster movies in the future, what then happens to their theaters in lower-demand times? Even more empty seats?

Are there lessons that premium streamers -- sister companies to many big movie studios -- can learn here? Right now, the monthly-price consumer equation has not changed much. Anywhere from $5 to $16 a month for the top popular services.

But imagine if a new season of high-demand shows -- Hulu's “The Handmaid's Tale” or Netflix's “Squid Game” -- takes on a new financial formula in future years. Is there a supply-and-demand price factor that might work against or for consumers that might be considered?

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