Recently AMC Entertainment decided to try a new way of pricing for seats in their cinemas based on the row of moviegoers’ seats. This new sightline ticket pricing is being tested in New York, Chicago, and Kansas City. The measure has been unpopular, and the company’s CEO, Adam Aron, defended it this Wednesday.
According to him, the new pricing regime will prevent price hikes and may increment spectators going to the cinema. He stated:
“We are in inflationary times, and inflationary times cause costs to rise… Under the pre-Sightline structure of the industry, if we wanted to raise the price in a theater, the only choice we had was to raise the price on all the seats…if we felt the need to raise prices, we might only do it in the most popular seats in an auditorium and actually hold the line and not raise prices on other seats. So, it is a way of increasing the price now, but preventing a price increase later on.”
“I am looking at ‘heat maps’ [meaning] what seats are booked for a particular movie, and nobody sits in row one. It could be opening night for Star Wars, rows three to 18 are booked solid, row one is empty. There is a possibility here that by discounting the price up-front, we may be able to expand the moviegoing market to more price-sensitive consumers”
Aron mentioned that the strategy is similar to how other events establish prices, such as concerts and sports events. Also, the company uses this same strategy in Europe. He also recognized that this is a substantial change for audiences in the U.S., so they are testing some markets first and will be seeing very closely how the market behaves.
The company would benefit from the measure; among the highlights for AMC would be the chance to get more A-list members in their loyalty program. Charge more for the best seats and fill theaters more in the less wanted ones.
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