Cars have an intended function, transportation. They pretty much have all the same features; wheels, brakes, radio, engine, windshield, and all the standard features that meet federal and state guidelines for safety and legality, ie: mirrors, turn signals, seat belts, air bags, headlights, break-lights, etc. Yet a Ford Focus costs around $16,000, while a Ford Mustang costs over $23,000. A Lexus RX, $39,000. Why the huge gap in prices? Simple, the answer is quality. Better parts, better design and engineering, performance, and definitely more bells and whistles. But isn't that the same across all avenues of marketing? The higher the quality, better features, and more bells and whistles, the more expensive it is. A men's polo shirt at Wal-Mart is far cheaper than one sold at Macy's. Again, we're talking quality of material, stitching and craftsmanship, etc. All of this, of course, comes down to money. The more money companies invest in a product to up its quality, the more they will charge for it. If a Ford Focus and a Lexus RX cost the same, wouldn't everyone purchase the Lexus then? So why can't movie ticket prices do the same?
Movies have an intended function, to entertain. They pretty much have all the same features; actors, directors, editors, sets, props, as well as all the components that make for a feature length film, ie: runtime, a narrative, plot, conflict, resolution, etc. Like cars, movies vary in terms of quality. But movie tickets all cost the same.
Take a look at this early Summer for instance. The Dictator vs The Avengers. The Dictator had a production budget of $65million and a runtime of 1h 23m. The Avengers had a production budget of $220million with a runtime of 2h 22m. Avengers' budget shows with better actors, directing, performances, and a dump truck full of bells and whistles. So, when standing in line to purchase a $9 ticket, which is gonna give you more bang for your buck? Some could say that they prefer The Dictator over The Avengers because they want a good comedy, and just aren't into comic book films. That's a fair argument. But box office returns have clearly illustrated those people are in the minority.
In today's struggling economy, people have to make choices. How many times have we said to ourselves, "I want to see both movies. I guess I'll see (movie A) in theaters, I can wait for (movie B) to hit cable." Such was my attitude in deciding between The Dictator and The Avengers. Had The Dictator offered a matinee price of $3 and a regular price of $4, that certainly would have swayed my decision. Not that I would have forgone The Avengers, but I would have seen both films in their theatrical run. I'm sure theater owners wouldn't object, as they maintain they don't profit from ticket sales. Yet, keep me in the theater longer, and that's more opportunity that I'll fork over money for their overpriced concessions.
Studios may argue that such pricing could hamstring any profitability from lower budget films (it's sad to think 60 million is "low-budget"). That may be true, but studios who adopt that line of thinking don't consider the reverse, that bigger doesn't always mean better. Take a look at Battleship. Like The Avengers, it too had a budget of over $200million and a runtime well over two hours. Yet it sank. Didn't that hamstring the studio's profits too? In April 2012, a romantic-comedy, or rom-com, was released called Think Like A Man. It scored a hair under $90million domestically, with a production budget of merely $12million. A very profitable film. More so than The Avengers, in terms of investment vs return is concerned. Think Like A Man earned the studio a profit of 600%. The Avengers earned merely 165% profit. If we maintain the argument that ticket prices should reflect budget, than Think Like A Man would have made less money right? Perhaps. According to RottenTomatoes, critics seemed split (53%), but audiences gave it a thumb's up (88%). So split critics and good word of mouth made this movie $90million. Would shaving $3 off the price of the ticket have ham-stringed its profits? It still would have earned far more than what was invested, and I dare say the financial loss from a reduced ticket price would be softened by audiences who didn't go see this film because split critics and word of mouth wasn't enough to sway them. Now, many of them would go see it, because the bargain sold them on it.
Wait a minute. Don't studios already do this? Not in theatrical runs, but certainly in DVD sales? Like a theatrical run, they all cost $19.99 (more for blue-ray). But after a year or so, many end up in the bargain bin, while others still command a higher price-tag. Some films, studios feel, are so profitable, that they vault the films, releasing them to the public for a short time every so many years. In fact, statistics show that in the film industry, more money is to be had in DVD sales than theatrical sales. Indeed, home movie entertainment has moved from back-end profits to the front end.
Movie prices are indeed a huge factor in a consumers' purchasing decision. Stores like Buybacks are built on the business model of buying/selling used DVDs. Hey, if I save $9 on a movie because it's used, that's a good deal. It doesn't diminish the quality of the film or my enjoyment of it, plus it's under a limited 30-day warranty (in case the previous owners scratched it causing it to malfunction).
Would adjusting ticket prices to reflect budget and it's assumptive quality change the landscape of how films are made? Would studios be less willing to fork over $200million for fear that it would drive ticket prices up? Would Indy films be given their due? I'd say the biggest change would be in the overall quality of films. For example, no way would we see another Battleship, at least not at a +$200million budget. This film was directed by Peter Berg, who's directing credits include so-so films like Very Bad Things, The Rundown, and The Kingdom. Where as Avatar was directed by James Cameron, who's films include Terminator, Terminator 2, Aliens, Abyss and Titanic. In other words, James has a proven track record with making movies that are both quality and profitable films. Some might argue that this would hold younger talent down, while only the older guard will make the big bucks. Not true. Remember, long before the studios gave him the reigns of a $200million dollar project, Mr. Cameron had to cut his teeth on some low budget films, like Terminator and Pirannah 2: the Spawning, to prove he could tell a good story without relying on expensive props and effects. Directors like Spielberg will even be given a pass by audiences and studios should he turn out a clunker or two, because of his overall success in film making. The same will hold true for actors, writers, editors, FX departments, etc.
Hold on. Isn't that kind of how it works anyway? Surely Johnny Depp didn't command his current salary while filming A Nightmare on Elm St., or Private Resort. True, but when actors start commanding those high-end salaries, I think you'll start seeing them behaving more selectively, attaching themselves to better quality films. Johnny's latest films, Dark Shadows, Rango, The Tourist and Public Enemies all failed to turn a profit domestically. They keep his name in the public's ear, but too much could damage his bottom line. Look at Tom Cruise, he's just not as bankable as he used to be. Certainly Studios could of saved 12-15million on hiring a good, but somewhat undiscovered, actor for Vanilla Sky, The Last Samurai, and Valkyrie, selling America on the strength of its story rather than the name of its actor.