Here’s something that the National Association of Theater Owners doesn’t want to tell you: Ticket prices have increased at least 20 percent since 2019, for an average price of $11. (For details at how we arrived at this figure, read on.)
It didn’t used to be this way. NATO usually provides an annual average ticket price, usually in April. That stopped — understandably — in 2020, when theaters faced Covid closures. However, there’s been no NATO update from its now 3 1/2-year-old 2019 average of $9.16.
Why not? Per a NATO spokesperson, the changing market conditions related to the current release schedule include different levels of attendance by families and older audiences; that makes announcing an adjusted price difficult. Meaning: If there were more movies, more kids and more senior citizens would be in attendance and that would drive down the average price with their ticket discounts. The circumstantial comparisons between 2019 and today, the spokesperson said, were “apples and oranges.”
It’s true: The world is very different than it was pre-pandemic, and particularly for exhibition. Box office in 2022 currently stands at 66 percent of 2019, many films that would once go to theaters now debut on streamers, COVID hasn’t gone away, and theaters are still trying to claw back their audiences. However, in one way the market is utterly unchanged: Prices continue to rise.
Here’s how we arrived at a 20 percent increase: The best evidence comes from the last earnings call of AMC. The biggest exhibitor said ticket revenue rose 22 percent from second-quarter 2019 to second-quarter 2022. With many of their top theaters located in major cities, AMC does have higher-than-average prices — but that’s always been the case. (We docked the extra two percent because AMC also has a higher-than-average number of premium-priced screens.) Speaking with multiple studio sources, they also estimated a minimum increase of 20 percent.
It’s not a shocking jump. Per government figures, the Consumer Price Index between April 2o19 and August 2022 rose 16 percent. While 20 percent represents the greatest increase in any three-year period since 1980, ticket prices increased 15 percent or more in the 1980s and between 1998-2001. The rise of premium-format screening also contributes to the increase.
Higher prices mean higher grosses, of course, which influence studios’ release strategies. The box-office returns for quite a few films, led by “Spider-Man: No Way Home” and “Top Gun: Maverick,” buttressed exhibition’s argument for their preeminence in the platform food chain. In theory, films with the highest audience enthusiasm (i.e., those big-budget blockbusters) also face less resistance to ticket prices. Those films’ audiences skew toward younger men, who also are have the least resistance to returning to theaters. Year to date, 70 percent of the business has been done by franchise or remakes; in 2019, that number was closer to 60 percent.
While the general public may not be entirely aware of the increased cost of going to the movies, the same does not hold true for the financial analysts who advise investors. Like many analysts, we used the box-office gross comparison from 2019 as a recovery benchmark, which currently stands at 66 percent. However, if we use the higher ticket prices to calculate attendance, theaters this year have sold about 55 percent of 2019’s total.
©20thCentFox/Courtesy Everett Collection
It also highlights the persistent issue of dubious box-office comparisons. The $711 million domestic grossed by “Top: Gun: Maverick” in 2022 is not more than the $659 million grossed by “Titanic” nearly 30 years ago. It’s still an extraordinary performance for “Maverick” — but an average ticket in 1997 cost $4.59.
With a 2022 average ticket price of $11, audiences bought about 64.6 million tickets for “Maverick.” The same calculation for “Titanic”: 143.6 million. (Also: The domestic population of 2022 is 20 percent higher than 1997.)
Beyond annoying box-office reporters, that hidden difference in attendance reflects a (often massive) distortion in perception. When unadjusted figures are accepted as gospel, it also suggests that theaters are struggling only because studios aren’t supplying enough films.
Theaters continue to recover from the pandemic, better than many anticipated. They proved, again, that it’s the platform of platforms. However, all sectors of the entertainment industry and Wall Street know that it remains a work in progress. Attendance levels that stand at 55 percent of 2019 are not enough.