Coming soon to a theater near you: Surge pricing for movies

The Marvel model for success
The Marvel model for success

Would you go see "Geostorm "or "The Snowman" -- two box office duds that were savaged by critics and have abysmal scores on Rotten Tomatoes -- if you didn't have to pay full price to watch them in an empty theater?

Regal Cinemas (RGC), one of the largest movie theater chains in the United States, is hoping you might.

The company will experiment with charging more for tickets during peak movie times and less at times when attendance tends to be lighter.

Think of it as Uber-style surge pricing, but for movies.

Regal, partnering with the online ticket service and app Atom Tickets, will try it in several markets next year.

Regal CEO Amy Miles didn't say how many theaters would try it, what the prices would be or whether Regal might use such a model to charge different prices for hits and duds.

But the new pricing plan, if successful, could be just what theater chains need. Shares of Regal, competitors AMC (AMC), Cinemark (CNK), and big screen operator IMAX (IMAX) have all fallen this year because of poor box office sales.

There's a big debate about whether the high cost of tickets -- not to mention popcorn, soda and other concession stand goodies -- are the industry's biggest problem.

Related: Box office slump hurting AMC theaters and its rivals

That might be part of it, and it's the reason another company has recently launched a service called MoviePass that lets people see as many movies as they want for a monthly subscription. In other words, Netflix for movie theaters.

The big chains are cautiously embracing it. Miles said in an earnings conference call with analysts Tuesday that Regal is happy to sell tickets to MoviePass at full price, and MoviePass can then offer those tickets to its customers at whatever price it wants.

But Miles ruled out any partnership that would give MoviePass access to lower-priced tickets.

"We will take a wait-and-see approach and we're going to continue to enjoy the benefits of the full priced movie tickets that we're receiving for all MoviePass customers," Miles said. "What we will not entertain is the discounted ticket arrangement or any participation in our concession sales as part of the arrangement."

Related: Can MoviePass save the multiplex?

Netflix (NFLX) itself is a problem for the movie theaters: Why go out and see a mediocre movie when you can sit on the couch and binge the second season of "Stranger Things" instead?

Netflix, along with Amazon (AMZN), Hulu and top cable networks have splurged on big budget shows with top actors and directors.

It's why many call this the golden age of television, or peak TV.

Still, there's hope for movie theaters. It's a simple formula: People will put down their phones and go the multiplex when there's something good to see. That was clearly the case with the recent horror movie smash hit "It."

The superhero movies "Justice League" and "Thor: Ragnarok" are coming out in November, and the eagerly awaited next installment in the Star Wars saga, "The Last Jedi," is due out just before Christmas.

So there's a good chance people will stop watching Netflix long enough to go spend two hours escaping reality in a movie theater.


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