AMC Theatres, the largest movie theater chain in the United States, has been exploring different pricing models as moviegoing habits change. One option they have considered is charging variable ticket prices based on seat location within the auditorium.
What is AMC’s current pricing model?
Currently, AMC offers several different ticket tiers:
- Standard admission
- Matinee (shows before noon)
- Senior admission (ages 60+)
- Child admission (ages 3-12)
However, all seats within an auditorium are the same price regardless of location. The only exceptions are for specialty seating like IMAX or 3D movies, which carry a surcharge.
Why is AMC considering variable pricing by seat location?
There are a few key reasons why AMC is exploring pricing based on seat location:
- Certain seats are more desirable – People may be willing to pay more for seats in the middle of the theater away from the aisles.
- It allows capturing more consumer surplus – Currently, all moviegoers pay the same price regardless of how much they are willing to pay. Variable pricing allows capturing more value from people willing to pay more.
- Increased revenue opportunities – By segmenting their inventory, AMC can potentially generate more revenue for premium seats during peak periods.
- Aligns with how other industries price – Airlines, concerts, and sports all price tickets based on seat location. Movie theaters could adopt a similar model.
What are some concerns around variable pricing by seat?
While variable pricing could have benefits, there are some potential drawbacks and concerns to consider:
- Customer confusion/frustration – The pricing system may be seen as overly complex or frustrating. Customers are used to set prices within a theater.
- Perception of unfairness – Charging more for certain seats could be seen as unfair nickel-and-diming if prices are pushed too high.
- Logistical challenges – The variable pricing may require upgrades to ticketing systems and staff training to implement effectively.
- Impact on concessions – If guests spend more on tickets, they may cut back on high-margin concessions which are a key revenue driver.
How could variable pricing work at AMC theaters?
If AMC did shift to variable ticket pricing by seat, here are some possibilities for how it could work:
- Price zones – The theater could be divided into pricing zones. For example, Zone A for front and center seats, Zone B for middle seats, and Zone C for seats in the back or far sides.
- Dynamic/surge pricing – Prices could fluctuate based on time of day, film popularity, or other factors to better align supply and demand.
- Reserving specific seats – Customers pick actual seat locations at time of purchase for an assigned price.
- Bundled packages – AMC could offer seat selection as an add-on or bundled package.
Are there any precedents for variable ticket pricing in theaters?
While not yet common in movie theaters, variable pricing is starting to emerge in some live theater venues:
- Broadway theaters – Some Broadway shows use premium pricing for front orchestra seats versus rear mezzanine seats.
- Sporting events – Stadiums and arenas frequently charge more for lower bowl or closer seats versus upper deck or end zone seats.
- Concerts – Front row or VIP seating sections often come at a premium price point compared to general admission seats.
The success of variable pricing in these live event formats suggests there may be an opportunity to replicate it for movie theaters. However, the norms are still firmly set around consistent pricing within a movie auditorium which could make adoption slower.
What are other movie theaters doing?
Currently, AMC is one of the only major movie chains seriously looking at variable ticket pricing. Some of their competitors’ approaches include:
Theater Chain | Pricing Approach |
---|---|
Regal Cinemas | Standard tiered pricing by age and time of day. No pricing differences within auditoriums. |
Cinemark | Tested demand-based pricing in 2018 but hasn’t rolled out broadly. Currently uses standard tiered pricing. |
Alamo Drafthouse | Higher pricing for seats in the center section in some locations. All other seats are general admission price. |
Among major chains, variable pricing is still extremely limited. Independent theaters have more flexibility to experiment with creative pricing models.
What are the implications for moviegoers?
If variable ticket pricing becomes an industry norm, there are several implications for moviegoing customers to be aware of:
- Higher prices for premium seats – Expect to pay more for seats in the middle of the theater on Friday/Saturday nights.
- Strategic ticket buying – Customers may hold out for discount showtimes or seats to get deals.
- Less casual ticket buying – Spontaneous moviegoing may decline if prices fluctuate and seats sell out faster.
- Higher incentive to join loyalty programs – Programs like AMC Stubs A-List could offset higher peak pricing.
While the days of one price fits all may go away, value-conscious consumers should still be able to find affordable tickets by being flexible on showtime and seat location.
Conclusion
AMC is considering variable pricing by seat location as an evolution of the traditional movie ticketing model. While not implemented yet, it could provide guests with more seating choices and AMC with more revenue management options. However, it risks confusing or frustrating customers accustomed to set ticket prices within auditoriums. As movie theaters look to better align demand with supply post-pandemic, expect ongoing pricing innovations in the years ahead.