Film Buffers - movie theaters must find ways to increase revenues without increasing costs of services - Brief Article - Statistical Data Included

American Demographics, Sept 1, 2001

With ticket prices breaking the $10 barrier in New York City and flying through the roof nationally - rising an average of 6 percent over the past two years - cinema operators may have pushed American moviegoers to their limits. In fact, 60 percent of Americans say they think movie tickets are not reasonably priced, and almost half (44 percent) say they usually go to discount theaters or movies offering discount tickets, according to a recent study from London-based market research publisher, Mintel.

"There's not much room to push prices higher, unless theaters can explain why consumers should pay more," says Bill Patterson, Mintel's U.S. research director. The "Mintel Consumer Intelligence's Cinema & Movie Theater Market" report was designed to help theater owners explore ways to increase revenue - either by getting more people in the door or finding ways to encourage the ones already inside to spend more money on refreshments and other amenities. The study, commissioned by Mintel, was conducted in January 2001 by International Communications Research (ICR) and released in June. It is based on a nationally representative telephone survey of 1,006 adults.

One way for movie theaters to increase revenue is to attract the consumers who aren't already movie-bound - such as women and seniors, Patterson says. The study found that 31 percent of the adult female population and 52 percent of adults 65 and older are unwilling to plunk down money at the local Cineplex. A fair chunk of today's 78 million Baby Boomers, next in line for retirement, aren't terribly motivated either: 24 percent of 35- to 44-year-olds and 27 percent of 45- to 54-year-olds don't go to the movies. Patterson recommends that theater operators offer more tiered pricing or discounts to reach out to retirees on fixed incomes and the 57 percent of non-moviegoers with incomes below $15,000.

Besides raising ticket prices, how can theaters squeeze more money from the 74 percent of Americans who go to the movies at least once a year? The study suggests offering enhanced services. For example, one-third (36 percent) of moviegoers say they would be willing to pony up more money for stadium seating or better quality sound. And 61 percent of movie patrons would prefer more healthful food options. However, cost continues to be a concern: 74 percent of cinephiles, said they would stop buying refreshments if the prices rise. Considering that 89 percent of moviegoers head for the concession stand, theater owners may want to pay attention to the changing palates of their patrons.

The biggest spenders at the cinema are young singles; 55 percent of this group dishes out $12 to $30 twice a month in theater tickets and refreshments, compared with 43 percent of young married couples. To encourage moviegoers to dip even deeper into their pockets, Patterson suggests that multiplexes set aside one theater to house a cocktail bar or offer food served cafeteria style on trays. It would be one way to turn just another night at the movies, into An Affair to Remember. For more information about the study, contact Mintel's Alissa Ostrowski at (312) 932-0400 ext. 255.

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