Cinemas reduce ticket prices to stimulate flat admissions

22 August, 2018 by Don Groves

Going to the cinema is getting cheaper, at least for members of the movie clubs run by two of the major chains and Palace Cinemas.

The main motivation seems to be that many exhibitors recognise that paying $21 or more is beyond the reach of price-sensitive consumers.

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Another factor: Exhibitors realise they need to give people compelling and affordable reasons to leave their homes and Netflix, Stan and other streaming services, allied of course to the commercial appeal of the films they screen.

Last year nationwide ticket sales totaled 85 million, down from 91.3 million in 2016 and 90.2 million in 2015, according to Screen Australia.

Hoyts cut its regular prices and those for its Rewards members a couple of months ago. Village Cinemas followed a few weeks ago and, starting on Thursday, Palace Cinemas is reducing the prices for its Movie Club members.

Hoyts is offering members ‘super saver’ prices of $12 and ‘savers’ for $15 on some titles; the top price is $19 on Thursday to Sunday after 2 pm, plus a premium for Lux and Extreme Screen cinemas.

“We simplified the pricing, recognizing there are many entertainment options and that some moviegoers are price-sensitive,” CEO Damian Keogh tells IF. “We know Netflix has a huge following and we needed to respond.”

Unsurprisingly, Village responded by reducing the prices for its Vrewards members to $15 and $18 for VMax. The top prices are $22 and $25 for VMax.

Palace is cutting tickets for movie club members in Sydney and Melbourne from $16.50 to $15.50. That followed the gambit of charging $5 for all movies, all sessions at most locations for a week earlier this month.

CEO Benjamin Zeccola tells IF the aim of the $5 initiative was to stimulate ticket sales in a quiet week and to increase the exposure for the trailers for Ladies in Black (which Sony is launching on September 20), A Star is Born (Warner Bros/Roadshow, October 18) and Bohemian Rhapsody (Fox, November 1).

“That seeds future visits,” says Zeccola, who acknowledges $5 was “too cheap” but was pleased with the uplift in admissions that week.

Zeccola is not worried about competition from Netflix, reasoning: “People still want to go out and have a great time at the movies. Our cinemas are the best in the world for comfort, the quality of our screens and the proximity of release dates to the US.”

Event Cinemas is charging CineBuzz members $19 and the regular price is $21. A spokesman tells IF: “Event Cinemas encourages more people to join our free Cinebuzz loyalty club which ensures customers receive access to the best ticket prices every day. We are committed to offering our customers the most choice to suit every taste, and we believe we’re getting smarter at making the offer right for people to come to the cinema when it suits them.”

Cinema Nova general manager Kristian Connelly says his venue has long offered the cheapest tickets in Melbourne with its popular Monday discount which appeals to audiences who might otherwise be priced out of moviegoing.

The Monday price is $7 before 4 pm and $10 after that. The Privilege Member rate is $17 and $14 for concessions, a saving of $3.50/$4 respectively.

“There have been a number of shifts in ticket prices over the past few months, but we feel that between our Monday discount, Privilege Membership rate, specialized events and a film selection unlike anywhere else in Melbourne, audiences will continue to support Cinema Nova and our dedication to screening independent, Australian and quality feature films,” Connelly says.

“Price reduction is a tempting way to try to combat audience erosion but it is my firm belief that the key driver for cinema attendance is appealing content and the coming months show lots of promise. Once the discounting option has been taken by any business in any industry, it reduces one’s future options markedly.”

Majestic Cinemas CEO Kieren Dell has not changed the pricing structure at his seven sites in regional NSW and Queensland and has no plans to. Its Movie Club prices range from $6.50 to $9.50, with full adult prices at $15-$17 and concessions at $11-$13.

“We have always been aware of the need to make moviegoing affordable, particularly in the regional areas we primarily operate in,” Dell says.

“We remain of the view that targeted discounts to our Movie Club members, via Choovie and a movie-of-the week are preferable to a flat discount strategy. It seems the majors have cottoned on to some of these ideas we have been doing for some time.

“I don’t think it is in response to Netflix specifically, just an understanding that different people have different price points at which they will come to the movies (which is the point behind Choovie, for example). So dynamic pricing makes sense to maximise bums on seats by targeting different pricing to different market segments.”

 

 

 

 

 

 

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