Cinema tickets for ‘The Batman’ take flight

when The Batman opened to packed audiences around the world last weekend, it was a significant moment. Not only is the return of the superhero franchise a boost to cinemas that have suffered badly during the pandemic, but many US film-goers had to pay more to watch the film than other titles.

Tickets for The Batman at cinemas operated by AMC, the largest US chain, cost only a dollar or two more but, together with higher-priced showings of Spider Man: No Way Home at other chains last December, film history was being made. Since the opening of The Godfather50 years ago this month, US cinemas have treated all films equally.

That’s mysterious. Not only are we used to airlines charging different fares for flights, and varying prices heavily according to demand, but theaters do the same for live shows. When there is a hit on Broadway or in the West End, box office prices spiral: I thought of catching Cabaretstarring Jessie Buckley and Eddie Redmayne, but two tickets cost £650 by the time I tried to book.

This makes paying up to $20 a ticket for The Batman in Los Angeles seem almost a bargain, even with expensive popcorn and soft drinks. It costs $200mn to produce, lasts for three hours and has the brand equity of a popular franchise, including The Dark Knight Rises a decade ago. It must be worth a few dollars more for a date night at the movies, surely?

To judge by the $258mn taken by The Batman globally on its opening weekend, the answer is yes. A superhero surcharge will not be the end of it. Cinemark, the third-largest US cinema chain, said this week that it may introduce dynamic pricing — raising and lowering prices for various films and showings to maximise audiences.

Given that US cinemas are largely empty a lot of the time — Cinemark’s were 19 per cent occupied in the last quarter of 2021 and they only reached 25 to 30 per cent before the pandemic — it is strange that they have not done so sooner. Prices already vary in Europe, with tickets costing more for better seats, or for popular films.

This also used to be common in the US — prices in the early 20th century varied according to the stars, directors and popularity of the films, but the diversity faded as smaller chains consolidated, and was eliminated entirely for Paramount’s The Godfather† Studios were barred from setting cinema prices by a 1948 law, but perhaps Paramount made them an offer they could not refuse.

Family-owned chains in red state America were never hotbeds of innovation, but an airline that filled only a quarter of its seats would be in trouble. Airlines and cinemas both face high fixed costs and perishable inventory: flights take off and films get shown, no matter how many seats are filled.

Call it the popcorn strategy. Cinemas keep only about half the ticket price, with the rest going to the studios, but make a much bigger profit on the popcorn they can make and sell to filmgoers at a huge mark-up. Cinemark’s gross profit margin on the $6.66 paid by its average US customer for drinks and snacks last quarter was a mouthwatering 83 per cent.

So, cinemas have traditionally focused not on filling seats but on selling as much popcorn as possible. The two are related, but one study found that higher average ticket prices also tend to raise snack sales because over-sixties and under-18s in concessionary seats eat less. The Batman is in a sweet spot because it attracts 18 to 34-year-old men who buy buckets of the stuff.

Yet cinemas cannot carry on simply raising all their ticket prices to gouge more out of extravagant popcorn munchers, leaving swaths of seats for their less popular films unfilled. Cinemark incurred a $1bn operating loss over two years from pandemic disruption and something must be done to persuade others to return.

Theaters and cinemas are not the only ones with pricing models — customers have their limits. “We all have thresholds in our minds where a ticket starts to feel like bad value and we won’t buy an ice cream or a programme,” says Robin Cantrill-Fenwick, chief executive of Baker Richards, a UK arts consultant.

West End theaters get away with pricing in-demand shows with limited runs as live performance luxuries — those tickets to Cabaret included champagne and a tasting menu at a stage-side table. But cinema is a mass-market service that now has to compete with home streaming; popcorn may be profitable but it often makes filmgoing feel like sitting in a fast-food restaurant.

The popcorn strategy has been exhausted and cinemas will have to adopt more inventive tactics. Hence the recent talk of dynamic pricing, which is a fancy way of saying that some ticket prices will fall. It is logical: films are not identical, either in quality or cost, and only a few are marketed as expensively as franchises such as The Batman or next quarters Top Gun: Maverick.

Change is overdue. Why should everyone have to pay superhero prices for quieter, gentler films in smaller venues? Cinemas have forgotten how to attract a variety of customers, but they must learn the skill again.

john.gapper@ft.com

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