If you want to see Star Wars: The Rise Of Skywalker at Odeon, you’re paying up to £2.50 extra on top of regular ticket prices – and we’ve been looking into why.
Comfortably one of the biggest cinema chains in the UK is Odeon, and it’s a company that continues to invest in the industry. It’s opening up a cinema dining venue for instance (details on that here), and is slowly rolling out its luxurious Luxe sites as well.
Furthermore, it continues with its excellent Odeon Screen Unseen programme, and cheaper films on weekend mornings for anklebiters.
Yet for the past few years, Odeon has also been adding a premium to the price of big releases in their first week or two of release. When this was first noticed back in 2014, the chain called it its “dynamic pricing” initiative, whereby it confirmed it was applying flexible pricing across the range of films that it showed. Vue too was doing the same, although at the other end of the spectrum, that’s a company that’s found itself in conflict with movie studios over its desire to charge lower prices for tickets.
In the case of Odeon, after the initial furore, consumers seemed to accept – however unwillingly – the variable pricing structure. But it means a pound or two on the price of a ticket if you want to see a big film on its first weekend. Sometimes the premium lasts longer, sometimes it’s higher. But it seems to be working for Odeon. As this American Marketing Insider article noted, when Avengers: Endgame was released earlier this year, at its flagship Leicester Square venue it was charging “anywhere from $15 to $51.63 per ticket for the opening weekend” in one single screen.
Why, then, is Odeon doing this?
Outside of the obvious desire to make more profit, it’s also a reflection of how big movie studios treat cinemas. In the first week or two of a film’s release, a studio with a major release will negotiate a higher percentage of the film’s takings. That percentage will scale back the longer a film is shown, and thus – to give a loose example, around 60-65% of ticket sale income in the first week will go to the studio (for a huge release), and maybe 50-55% in the second week, and so on. There’s no fixed industry tariff, and thus cinemas negotiate with individual studios. It’s a very cloak and dagger operation.
Thus, you get distributors promoting their films to the nth degree, knowing that not only does a huge box office opening weekend give it great headlines for its film, but it also brings with it a higher split of the takings. For cinemas, a film such as The Greatest Showman or Bohemian Rhapsody is gold dust: neither was regarded as a huge top-end premium release, both played for a good month or two, bringing in good crowds consistently.
Back to Odeon, then.
That blockbuster premium/dynamic pricing/whatever catchy buzzphrase is passing on the extra slice it has to pay to the studios in the first week or two over to you. This past weekend, then, at my local, the premium applied to the two new studio releases, Last Christmas and Le Mans ’66. Neither are Marvel-size movies, and thus the premium was £1 on each. Yet at the other end of the scale, a £2.50 premium per seat is being added should I want to see Star Wars: The Rise Of Skywalker in its first week. That’s adding over 20% to the price of a seat, leading to many calling the practice ‘blockbuster tax’.
Disappointingly, £2 is being added to Frozen II ticket prices too, the kind of film that families will want to see together, and they might just find themselves with a bigger-than-expected bill as a consequence.
It’s wrong, certainly, to lay this entirely at Odeon’s door, but it’s notable that not every other chain has followed suit. What’s more, it’s a policy that’s well established now, and not going anywhere, with the AMC Odeon group rolling it out in different locations around the world too.
Again, it’s countered by off-peak screenings and other initiatives. On a film like Star Wars people are, we’d wager, more likely to swallow it, and there are signs that consumers have accepted this is the status quo too. But still: as a consumer, it leaves a slightly sour taste, at a time when efforts are being made to get us going to the cinema more.
Source: Film Stories