[ap99]

But aren't they pricing based on how much it costs to show the film?

Which in turn is how much the studios and distributors pay to make/market the film?

Which is in turn driven by costs...

Which are basically large bets on if a piece of art will have mass appeal.

[specproc]

I used to work at a VUE, my flatmate was a manager. I always complained about the awful, awful films we showed with no one watching them. Surely it'd be better to show some classics that would sell?

Apparently the deal back then was that theatres had to buy films in packages. If you wanted the latest blockbuster, you had to buy a bunch of terrible dross, and commit to showing it X times.

[ekimekim]

That practice is known as Block booking (https://en.wikipedia.org/wiki/Block_booking) and was supposedly ruled illegal in 1948. The more things change, I guess...

[specproc]

Ruled illegal in the United States.

[simiones]

It makes no sense from a classical economics perspective to keep the theater empty. Even if no one is buying at the break-even price, it can make sense to sell below cost just to recoup some of the investment - and adjust the investment in the future, of course.

Now, in reality there are second-hand effects, of course - like people getting adjusted to the below-cost ticket prices and being even less incentivized to buy at the normal price.

[Lerc]

I guess it depends on who gets paid for the movie being shown, and who gets paid when a ticket is sold.

If it is free to show the movie then there is no penalty to running extra sessions. If it isn't free, someone is being paid. If that is a different someone to where ticket money goes they care more about sessions than viewings.

[chrisss395]

Seems the same as a hotel - empty rooms benefit no one.

[philovivero]

I don't know about theatres, but I do know about hotel rooms.

If you lower the price too much, you get a different sort of clientele. The sort of person who wrecks the place and annoys all the other patrons nearby.

Then the cleanup costs a lot. Often more than the amount of revenue collected on the room.

It absolutely makes more sense to keep the hotel room empty than to lower the price to keep it fully occupied.

[gblargg]

They should price to get the most profit (or least loss). If people would buy tickets regardless of price, they could set them at $1 million each.