IMAX CEO on variable seat pricing at theaters: 'I don't generally like it'
IMAX (IMAX) CEO Richard Gelfond is not a fan of variable ticket pricing.
"I don't generally like it," the executive told Yahoo Finance Live earlier this week. "It's saying one seat is better than the other seat...it's tough to enforce, and I don't think you make enough money to create the complexity."
"Suppose I bought a cheap seat and I move to another one. Do you get in a fight in the middle of the theater? I'm just not a big believer in it," he added.
Last month, theater chain AMC (AMC) announced it would be rolling out a variable pricing system, dubbed Sightline at AMC, which will charge consumers more money for desirable seating locations in the middle of the theater whereas less desirable options, like the front row, will be cheaper.
AMC said Sightline will be implemented at all U.S. locations by the end of the year. However, the pricing model will not apply to shows before 4pm or tickets sold during Discount Tuesdays, a promotional day for loyalty members where all tickets are discounted to $5 or $6.
Although novel to the U.S., variable pricing isn't necessarily "new" as AMC had already been implementing price variations across Europe. The company also experimented with raising prices for certain high-profile films last year.
The announcement comes as theater chains look for ways to boost revenue after the pandemic forced virtually all locations to shut down. On top of that, the subsequent lack of movie supply, triggered by COVID-19 production headwinds, created even more of a drag on the industry's recovery.
According to data from Comscore, domestic ticket sales totaled $7.5 billion in 2022, representing a roughly 70% year-over-year increase but still 30% below pre-pandemic levels when total North American ticket sales hit $11 billion.
Some industry watchers say elevated ticketing is a risky bet as inflation remains sticky with moviegoers already experiencing higher prices.
Yahoo Finance crunched the numbers for a night out at the theater to see the recently released "Creed III" at an AMC location in New York City. The verdict? About $83 for two tickets, a large popcorn, and two regular soft drinks.
"My argument is compared to other forms of entertainment, it's still relatively cheap," Gelfond said when asked how theaters can justify the price as at-home entertainment options skyrocket.
"If I asked you to crunch the numbers about going to the Yankee game and having two beers and some popcorn there, or going to the Billy Joel concert at Madison Square Garden, or going to a Broadway play, that's $150 to $200 a ticket," he said."[The movies] are still a bargain compared to other forms of entertainment."
Gelfond added the IMAX experience is especially differentiated as "it takes you to another place."
"When you see Avatar, you go into another world...it's more immersive than a lot of things," he said.
Hollywood 'lost its way' with the Oscars
Two of 2022's biggest box office hits, "Avatar: The Way of Water" and "Top Gun: Maverick," are nominated for best picture at this year's Academy Awards.
Historically, big budget blockbusters have not received recognition at the Oscars, which Gelfond sees as the Academy being out of touch with the public's tastes.
"I think [the nominations are] a really good thing," Gelfond said. "Over the last few years, obviously accelerated by the pandemic, Hollywood a little bit lost its way with the Oscars. It was a little too much inside baseball, and it was a little too much streaming movies. Guess what? The public likes going to theaters and movies exist in theaters."
"This year's [best picture nominations] are a lot more like old fashioned movies, big special effects, big stars, big cultural events, global events in the world," the executive aded. "If the Oscars want to remain relevant, they needed to move back to that direction."
The 95th Academy Awards airs this Sunday, March 12 on ABC.
Alexandra Canal is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at firstname.lastname@example.org
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