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Smart pricing experts say cinema sector missed out on $124m

Smart pricing experts believe the cinema sector has missed out on $124m (£94.4m/€110.5m) for Avengers: Endgame by not using a demand-based pricing strategy.

Smart Pricer, the pricing firm that provides ticket sellers with the tools to increase revenues, online sales, and off-peak attendance, said advanced prediction models can calculate the number of people that will attend the movie show at each time, giving exhibitors the option to price accordingly to the demand.

The Marvel blockbuster grossed $1.2bn worldwide in its opening weekend and, as of this week, has reached $2.48bn.

Smart Pricer said: “Despite the enormous success of the movie, exhibitors missed on potential revenue. By using advanced demand prediction models and an intelligent pricing strategy, additional revenues of about $124m would have been possible.”

The pricing firm added that by using data, it can already predict the attendance in theatres accurately, based on hundreds of factors that drive demand, like movie life cycle, movie popularity, theatre location, weather, and several others.

For a movie release such as Avengers: Endgame, Smart Pricer suggests exhibitors sell tickets on three price levels, which are Super-Saver, Saver, and Regular, based on the expected demand. Regular tickets are sold for a slightly higher price than the original, while the Saver and Super-Saver tickets offer discounts.

Smart Pricer explains: “The algorithm automatically predicts that demand for Avengers: Endgame will skyrocket in the first 2-3 weeks after release, due to the huge popularity of the Marvel’s narrative. As a result, the exhibitor offers mainly Regular tickets and utilises on what visitors are willing to pay.

“During the following weeks the demand prediction would decrease and the algorithm automatically adjust the starting price to the Saver categories, where pre-bookings are rewarded and at the box purchases are still at higher prices.

“At the end of the movie life cycle, more tickets are being offered at the Super-Saver category to attract more people into the cinema that are price-sensitive and would either see the movie one more time on the big screen or are not the fans who necessarily go to the movies in the first weeks after release.”

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