Regal Theaters Considering Demand-Based Movie Ticket Pricing

Regal Entertainment Group, the second-largest cinema chain in the U.S., is considering implementing demand-based pricing for movie tickets.

Early next year, the cinema chain, through its partnership with mobile ticketing app Atom Tickets LLC, will begin testing the model in several markets in the hopes of boosting revenue and audience size, Bloomberg reports.

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“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 behavior,” Amy Miles, chief executive officer of Regal Entertainment, said during a call with analysts on Tuesday.

The move could potentially lead to higher ticket prices for big-ticket, blockbuster movies and lower prices for unsuccessful and smaller films. Aside from 3D, IMAX, and other specialty films, movie tickets are generally one-price-fits-all. The new pricing model is designed to encourage increased audience size at smaller and less successful films by offering tickets at a lower price.

The news of the new pricing model comes after Regal Entertainment Group reported third quarter revenues that slumped 12 percent to $716 million and a 14 percent drop in attendance, which the company blamed on a “challenging box office environment.”

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“If we can get consumers to go one more time a year, that is transformative to the whole business,” said Matthew Bakal, co-founder and executive chairman of Atom.

Miles did not identify specific markets for the test, but she did state that Regal would not consider sharing revenue with MoviePass, a service that offers consumers once-a-day admission to theaters for less than $10 a month.