By David Poland firstname.lastname@example.org
Ticket Prices & The 3D Merry-Go-Round
NATO (The Movie Version) announced today that the Q2 avg movie ticket price was up 20¢ from Q1 this year, hitting $8.06.
What does this mean?
Well, I have a couple of takes. First, I would normally expect Q2 ticket prices to rise by a small amount every year, as the summer launch is usually when theaters raise prices, usually by 25¢ or 50¢. Second, Q1 saw less than $150m in total domestic grosses from 3D movies or about 10% of the overall domestic theatrical gross. Q2 had over $1.3 billion in domestic grosses from 3D films.
Ah. Suddenly, a 20¢ rise in the quarter seems a little meager.
If 1/3 of the 3D films’ tickets were sold for 3D showing, that’s still 7.4% of all tickets sold carrying a 3D premium, representing about $450m including a 3D bump.
Very rough math: There were about 396 million movie tickets sold in Q2. Of those, a estimated (by me) minimum of 30 million were 3D tickets, sold at $11 each with $3 of that for the 3D bump. So let’s say the 3D bump added $90m to the domestic theatrical gross of Q2. That 2.8% of the overall gross.
20¢ is a 2.5% increase over the Q1 ticket price.
Obviously, there is some jiggle room in these numbers. Some theaters may have raised ticket prices modestly. 3D may be a little stronger or a little weaker than my estimate. Likewise, the 3D bump may be lower in some places and higher in others.
But essentially, the 20¢ rise in ticket prices this quarter seems pretty much in line with the increase in 3D tickets sold this quarter vs last.
Looking farther back, the high for average ticket pricing before Q3 2010 was 2010 Q1, aka The Avatar Quarter. Q2 dropped 7¢, Q3 dropped another 17¢ to $7.71.
Then it was a 30¢ leap in Q4 2010 , when six of the top 12 movies were in 3D, representing more than $950m or a third of the domestic gross in the quarter.
There was a 15¢ drop in Q1 2011, when, as noted earlier, there was not a lot of successful 3D product.
As you’ll notice, if you go back to look at Q4 2010, this 20¢ increase from last quarter is less than a 1% increase from then, suggesting that Q1 2011 was an anomaly (it may represent “off-season” numbers, but it was also heavily affected by the lack of a 3D animated film) and that 3D is doing a little less well at a percentage of tickets sold for 3D-available films.
$75m – $125m of 3D bump revenue in a quarter may seem like a lot. And it is a lot of money. But when an overall gross in the quarter of almost $3.2 billion, and the average cost of marketing rivaling the overall added 3D take, the issue of opportunity costs must be becoming part of the conversation at studios. Also, there is the question, even though the majority of actual screenings – as opposed to the venue count they keep offering up each week – is 50% 3D or less for most 3D movies, whether the all-3D marketing is leaving audiences who have had enough – of the form and/or the price bump – skipping titles all together.
(Now, I wait for the first comment correcting some math error I made. Hopefully, not.)