Mobile ticketing platform Atom Tickets is partnering with cinema chain Regal Entertainment to test demand-based pricing for film tickets in several markets in the new year.
Atom Tickets believes the pricing adjustment could make blockbuster films considerably more expensive than unsuccessful releases.
Regal told website Variety that it wants the test to drive both attendance and revenue.
“We expect to conduct a ticket pricing test in several markets in early 2018,” Amy Miles, chief executive officer of Regal Entertainment, said. “If an alternative pricing model is going to be successful we believe that one, it must provide a clear economic benefit to both exhibitors and our studio partners, and two, it should provide a compelling value proposition for our consumers.
“This test could be the first step towards a pricing model that drive incremental revenue in peak periods and incremental attendance in non-peak periods.
“Changes to the historical pricing structure have often been discussed but rarely tested in our industry and we’re excited to learn even more about how pricing changes impact customer behaviour.”
Tuna Amobi, an equity analyst at CFRA Research, told Variety magazine: “It’s a question of when, not if. Dynamic pricing has been proven to work in the airline, hotel, and live entertainment businesses so this is a positive. Movie chains can definitely be much more effective in how they price because the underlying technology has gotten a lot better.”
Regal is the second-largest chain in the US, though attendance fell 14 per cent to 44.69 million customers in the third quarter. It reported a revenue drop of 12 per cent to $716m, which Regal pinned on a poor choice of films.
“In a challenging third-quarter box office environment, we were pleased that our ongoing focus on customer amenities had a positive impact on our market share and operating metrics,” Miles said.
Atom Tickets allows users in North America to pre-order movie tickets and concessions, while the platform also provides moviegoers the option to watch trailers, read reviews and coordinate movie outings with friends while allowing each person to pay separately.
Through Atom’s social invite feature, users can purchase their ticket and also invite friends to go to the movie without paying for them. This process allows groups to easily reserve seats together – a crucial benefit for highly anticipated box office releases.