Beginning today, the Wall Street Journal reports that many major movie chains, including Regal Entertainment Group, Cinemark Holdings Inc. and AMC Entertainment Inc., are raising prices for 3-D movie tickets. It reflects the steepest price increase in a decade. 3-D ticket prices are rising by as much as 26% in some areas, though the average increase will be closer to 8%. The average increase for IMAX screens is 10%. Some theaters in metropolitan areas will be charging nearly $20 for IMAX admissions.
The WSJ article, which is behind a subscription-wall, acknowledges that movie studios are wary the price increases could spark a consumer backlash:
Some movie-studio executives expressed concern that the price increases might be too much too soon. “The risk we run is that we will no longer be the value proposition that we as an industry have prided ourselves on,” said a distribution executive at one major studio, who added that he was worried movies would become “a luxury item.”
But studios also like the increases because they split box office proceeds with theater operators. Dan Fellman, who is president of domestic distribution at Warner Bros., a studio that can’t even be bothered to make true 3-D films, approved of the price increases. “The exhibitors are trying to push the needle on ticket prices and see where it ends up,” he said. “Sure, it’s a risky move, but so far charging a $3 or $4 premium has had no effect on consumers whatsoever, so I’m in favor of this experiment to raise prices even more. There may be additional revenue to earn here.” Warners will open Clash of the Titans, a regular film that has been retrofitted for 3-D screens, next week.
Related reading in today’s Wall Street Journal: a piece called Will This 3-D Fad Fizzle Too? In the piece, Peter Decherney, a professor at UPenn, drew a smart parallel to the first 3-D bust. He said that in the 1950s, “3-D died out when the studios realized that television was a boon for Hollywood, not competition.” He predicts the same will happen again. “As studios find ways to profit from Internet and mobile distribution, they will be less interested in competing with new technologies.”