Cinema chains get creative to fill seats

NEW YORK • Charge less for the first-row seats closest to the screen to bump up attendance at a cinema? With the movie business in the doldrums, operators are looking for new ways to make money.

Cinemas in the United States have been stuck at about 1.3 billion tickets sold a year since 2010, leading to higher prices to get sales growth. That method has faltered this year, a dismal period for the North American box office with bombs ranging from King Arthur: Legend Of The Sword to Baywatch.

Revenue in the US and Canada is down 4.9 per cent so far this year, with the worst summer in decades and the bleakest October since 1996.

Hence, movie-theatre chains are getting creative. AMC Entertainment Holdings, the biggest chain in the US, plans to sell movie-related merchandise in 35 theatres next year.

AMC also plans to start selling online rentals of older movies through its website, working with partners who already provide films on the Internet.

Such an idea would have once been considered anathema - a movie-theatre chain giving film buffs a reason not to leave home.

Cinemark Holdings is testing Cinemark Movie Club, a subscription service that would compete with MoviePass, which lets customers watch one film a day at a cinema for US$10 (S$13.60) a month.

Regal Entertainment Group is testing demand-based pricing, which might let moviegoers pay lower prices for box-office flops and higher amounts for top hits.

AMC is also experimenting with demand-based pricing.

The new initiatives represent "an evolution of theatres trying to cater to what consumers are moving towards," Mr Eric Wold, an analyst at B Riley FBR, said.

He noted that the theatre chains have already boosted revenue from moviegoers by improving their food selections as well as serving beer and wine in some locations.

If Cinemark can get movie fans to turn out "more often and spend more dollars on this enhanced food and beverage programme they have rolled out, the cost to get them in there on a subscription plan is relatively low", he said.

Still, investors remain sceptical that the theatre chains have a solution for their woes.

AMC shares have fallen 67 per cent this year and the others have also slumped.

Netflix and Amazon.com are investing heavily in their own features, giving film fans more reasons to stay at home.

And studios, historically allies of theatres, are pushing to be able to sell downloads just a few weeks after their films appear on the big screen, which cinema chains worry may give viewers less incentive to go to the movies.

MoviePass, which got a surge in interest after cutting its prices this year, has also added pressure.

That is why moviegoers should pay attention to ticket prices in the coming months.

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A version of this article appeared in the print edition of The Straits Times on November 15, 2017, with the headline 'Cinema chains get creative to fill seats'. Print Edition | Subscribe