Discovering half-empty cinema screens at Village Cinemas’ Jam Factory in Prahran, Melbourne, on a Wednesday afternoon, entrepreneurs Shane Thatcher and Sonya Stephen spotted an opportunity.
“The answer is introducing a more demand-related approach to pricing,” Mr Thatcher said. “Economics tells us this will drive up attendance and overall cinema revenue.”
Working with an Uber-like model, they created the Choovie app.
Launching soon, it will offer dynamic pricing, which means prices for empty screenings in participating cinemas will drop accordingly, conversely costing more when movies are in high demand. Cinemas set the minimum and maximum prices.
Dendy Cinemas are on board, after a test run at Hawthorn’s Lido Cinema, but several majors, including Village Cinemas, who declined to comment, are yet to sign up.
A spokesperson for Palace Cinemas said that while they had been looking at dynamic pricing, they had decided that their movie club’s discounts were the best option for cheaper tickets at every session.
But a veteran industry figure from another key exhibitor, who wished to remain anonymous, said the lack of success of similar models, such as Ticket Bounty, meant Choovie was unlikely to make much of an impact.
“With major cinema chains already offering well-established movie club and discount days, communicating the Choovie concept and offering it through a handful of independent theatres will make it difficult for dynamic pricing to gain a following outside of a niche crowd,” the source told The New Daily.
Pointing to expensive overheads for cinemas, including rental costs and staffing levels, they said Choovie was unlikely to appeal to many industry players, noting most cinemagoers favour the convenience of their local cinema, rather than driving across town for a slightly cheaper ticket.
“The desire to reduce ticket prices and, therefore, grosses will hold little appeal for already successful businesses or those in single venue markets,” the source said.
“Dynamic pricing may hold appeal for less successful venues seeking to draw consumers from another during non-peak times, but breaking a consumer’s habit of attending specific venues would likely require both considerable discounting and promotion of the offer.”
Former Melbourne and Brisbane International Film Festivals director Richard Moore, who also previously worked as Umbrella Entertainment’s theatrical distribution manager, said he admired the ingenuity behind Choovie.
“I’m an avid consumer of cinema, so I’d be using Choovie all the time. The price of a full ticket during the day is far too high,” Mr Moore said.
Questioning Choovie’s assertion that 16 per cent of cinema seats are left empty, nevertheless Mr Moore argued it makes sense to maximise patronage.
“It’s all about volume. You want more people coming through, because you get all the add-ons, the lollies and the drinks.”
He’s not surprised there’s some industry resistance. “Admissions haven’t gone down. People still want to go out to the movies and are prepared to pay a premium price, so why would exhibitors change their mind?”
Responding to concerns of an unsustainable death spiral in price drops, Mr Thatcher added, “The entire Choovie model is premised on getting more people to go to the cinema, more often, growing the revenue pie.”