”Any consumer that hears or reads that is going to feel that they’re being gouged,“ one industry exec says
Hollywood movie studios are fuming over AMC CEO Adam Arons’ public reveal this week that his theater chain charged extra for opening week tickets to “The Batman” and would continue to pursue surge pricing, calling the move unhelpful, confusing and “incredibly greedy.”
“It’s just confusing and frustrating to me why you would openly boast about bumping up prices for the biggest films,” one industry executive told WrapPRO about Aron’s surprise announcement during AMC’s earnings call earlier this week. “It sounds incredibly greedy.”
The exec continued, “Any consumer that hears or reads that is going to feel that they’re being gouged, and right now with everything getting more expensive with inflation, are headlines about surge pricing what we need right now when so many auditoriums are nearly empty unless it’s an opening weekend for a tentpole?”
Representatives for AMC didn’t respond to requests for comment.
Execs and insiders at several Hollywood studios told us that there’s been quiet fuming towards Aron over how he handled the move, including from “The Batman” distributor Warner Bros.
A studio insider said Warner had no idea that the topic of differential ticket pricing would be brought up publicly after AMC competitors Regal and Cinemark had raised prices for the opening week of Sony’s “Spider-Man: No Way Home” much more quietly back in December.
While there’s an understanding that bringing in the surge pricing model from AMC’s overseas locations is important to capitalize on overwhelming demand for the few blockbusters getting a foothold in this post-COVID market, studios preferred Regal and Cinemark’s more discreet approach and said that Aron’s comments are counterproductive at a time when the industry is trying to bring people back to theaters.
“Dynamic pricing, surge pricing, whatever you want to call it, has been done and will continue to be done. Doing it for specific titles is the new difference,” said one distribution head. “But when it was done with ‘No Way Home,’ at least other companies were smart enough not to brag about it in an earnings call.”
Even with the boost provided by “The Batman,” which has grossed $172.5 million domestically in its opening week, annual overall grosses are still short of $1 billion at $974 million. That’s down 45% from the $1.79 billion grossed to this point in 2019. For AMC, the meteoric stock price surge the company saw last year when it achieved meme status has largely worn off, currently trading at $14.75/share after spiking to an all-time high of $62/share last June.
Aron said last week that he sees “considerable upside opportunity ahead if we continue to be imaginative” in how AMC prices tickets for its films, though he didn’t go into further detail. A look at AMC’s ticketing site shows that opening week tickets for “The Batman” in standard formats were up to $1 higher than for other films depending on location.
Box office analysts told WrapPRO earlier this week that tacking on an extra dollar or two for the first screenings of the biggest superhero films could be the start of a larger trend where ticket prices could be much more variable, potentially expanding discount opportunities for moviegoers beyond the usual midweek “bargain days” to see blockbusters that have been in theaters for weeks or films aimed at older audiences that have largely struggled since cinemas reopened.
One major studio exec suggested that theaters should consider adopting a pricing model similar to digital rentals, with tickets being sold at premium levels on opening weekend but at cheaper prices after several weekends in theaters. It’s a model the exec says they have discussed with various theater owners and industry leaders, including Aron.
The exec also thinks that offering family packs of tickets at a bundle rate might be another way to win over parents who currently seem reluctant to take their kids to theaters — not over COVID concerns, but because inflation and pandemic financial struggles have them watching their wallets.
While Disney’s “Encanto” and Universal’s “Sing 2” performed decently during their theatrical runs amid the Omicron variant surge, they still underperformed compared to pre-pandemic animated films, and theaters haven’t seen a release of another family film since then and won’t until Paramount’s “Sonic the Hedgehog 2” arrives next month.
In the meantime, the execs agreed that with surge pricing now in the public consciousness of moviegoers, theaters should accelerate whatever pricing experiments they have brewing to show the public that they have plans beyond just trying to get an extra buck out of their customers however they can.
“Right now, it’s all take and no give,” one said. “It doesn’t have to be that way, and I’d like to think that it won’t for long. If AMC and all the other theaters can show that they’re going to make new ways to provide value, then everyone will come out to see more films.”
Box Office Reporter • firstname.lastname@example.org • Twitter: @jeremyfuster