Seniors at the Movies

(Photo: David Thompson)

Our local movie house in suburban London charges £11.90 for a regular ticket, and even seniors pay £8.90 (over $13).  But there is a special for seniors (ages 60+):  Every Tuesday they show a recent movie (e.g., Lincoln is showing on May 21) and charge only £3 ($4.60).  Moreover, you get “free tea, coffee and biscuits!” Such a deal—so how can they make money off this, or is it just altruism by the theater owners toward us old folks?

The movie costs no extra rental, and the only variable costs are the wages of the one or two workers who sell the tickets and make the eats.  The fixed costs—of the movie rental, the theater and heating/electricity, are irrelevant for the owner’s decision.  I should think that, if they can sell even 20 tickets, they will increase their profits.

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COMMENTS: 21


  1. Eric says:

    It’s not as if they’d close on Tuesdays, even though it’s probably their slowest day of the week — so at least they derive some economic benefit from having a few extra people in the seats, even if they only paid a fourth of the normal price for other days.

    My first thought is that it’s probably better to persuade seniors to go on a slow day like Tuesdays so the cinema owner has more full-price tickets to sell on busier nights, and doing so may help protect the idea that the film is “cool” to a younger crowd that comes on the weekends — a notion that might suffer if the kids arrived to find a group of seniors ahead of them in line.

    But I would guess that in addition to that, there are probably other intangible benefits: maybe some seniors come with their children or grandchildren who pay full price, for example, or perhaps the gesture is seen as building good will in the community. It might even possible they can write off part of the £8.90 “gift” they give the seniors (the difference between the discounted tickets and a full-price ticket) in some way.

    It does seem like a nice thing to do, but one thing seems sure: I doubt there’s much altruism behind the decision.

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    • greg says:

      I think it is more getting them in at all and selling them something they otherwise wouldn’t buy at no extra cost while using otherwise under utilised capacity. It’s a very good form of price discrimination.

      Pensioners are often very price sensitive and not great film goers. I’m not sure if it is different in the US but unless it is something oscar nominated or that has become a cultural phenomenon seeing a pensioner in the cinema is a pretty rare event and I’m a huge cinema goer and when I worked shifts and was unemployed I’d always go in the day as it was much cheaper and now I work office hours and go in peak times in both I never saw pensioners in any numbers or regularity. I would bet good money the average number of normal cinema visits by pensioners is probably 1 or fewer a year.

      Also the pensioner films are often films going out of the cinema not just in. I still think they want to give them a chance to pay full price.

      I’m with DH.

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  2. Thisson says:

    Also consider that they may be shifting the seniors to less-busy showtimes and freeing up capacity at peak times so they can charge peak rates!

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  3. Will says:

    There is a second-run movie theater near me that charges only $1 for Tuesday showings. They have a self-service ticket machine, but curiously have had no ticket-checker at the theater entrance to ensure purchase.

    I presumed that the cost to pay an employee to verify the ticket purchase must be higher than potential lost revenue, but that seems hard to believe. Or perhaps they are relying on the honor system of their patrons – after all, who can’t afford $1? – and saving cost by not paying another wage.

    Personally, the $1 ticket usually leads me to buy $5+ worth of concessions – which is where the theater’s true profit must come from – but why not ensure the $1 price is paid, even if it’s so small?

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    • pawnman says:

      As you said, it’s not exactly the profit center for the theater, and it costs money to have someone check the tickets. Sort of like why dollar stores seldom have the same level of security as, say, Best Buy.

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  4. Rafael says:

    Exactly. They are increasing Throughput with minimal increase to Operating Expenses and no change to Inventory. Throughput accounting FTW!

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  5. Andrew says:

    It is also important that they are not showing movies that are just out. Theaters have to pay more to studios for the first 2 weekends of a release than they do a few months later. I’m sure it’s an even better deal for Lincoln, a movie which has had its theatrical run and is even out on DVD/Blu-Ray

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  6. Matt says:

    You’re ignoring substitution effects–every senior who would be willing to see a movie at the regular senior price but sees it for one-third the price represents lost revenue for the owner. You also seem to think that they leave the heat turned up and all the lights on even when no one is there.

    That said, the costs are probably still low enough to make it profitable for them.

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    • greg says:

      Have you not been to a cinema in the day. Even multiplexes do not close screens (and this may well be an indie cinema with only 1 or a few screens) while they are open at all and all screens are are always playing something or in change over and about to.

      Pensioners barely ever go to the cinema, they watch films on tv if they watch films. The substation effect will be at most minimal. Also you wouldn’t know what the film would be so couldn’t rely on it being there.

      They play the scheduled film even if no one has bought a ticket (particularly now they are all DCPs so it’s automatic), the screens are always lighted/heated etc. I also doubt they have extra staff on. Yet here instead of 2 or 3 people paying probably about £6-7 (grosss not net) for a daytime ticket the cinema will, they make it an event and get probably at least 50, maybe considerably more and likely more money per ticket sold even if they sell less at the concessions stand per person.

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  7. HMT says:

    If it works like it does in the USA…

    The movie theater gets very little from each ticket sale in the early weeks of a movie release. Most of the ticket price goes to the releasing studio/distributor. That split gets better for the theater as the release date moves into the past. This is why theaters like movies that stay popular over a long period of time vs movies that have a huge release then fall off quickly.

    The strategy outlined in the article would be a way to take a movie that is long past it’s release date (so heavy on theater split for the ticket price) and bring it back. The question is, how do you find an audience for a stale movie? What if your demographic research shows that older people don’t go to your theater for new releases? You try and lure them in with a discount price and find out that there’s a demand for movies that cost less. Sweeten the deal by adding in some coffee and cakes and the demand goes up even more.

    It’s also quite possible that the older theater goers are turned off by the younger crowd who (in my experience) are used to chatting, checking phones etc during a movie… I don’t think this is an innate rudeness I think it’s because they watch a lot of movies at home where this behavior isn’t a big deal. Older viewers watching with others who share a more traditional view of theater behavior may also be attractive.

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    • greg says:

      I think you are spot on.

      Although in my limited dealings with pensioners in the cinema (usually around oscar time, The Artist and Zero Dark Thirty are two I particularly remember this happening in) because they don’t go often a whole group seem to treat the cinema like it is their living room and are far far worse and ruder than your average 15-30 year old who I never really have a problem with (just don’t go on friday night and you are usually fine). I tell people to be quiet in cinemas and it’s people over 50 that are the ones I predominantly have to tell to shut up. Although I do have to tell more young people to turn their phone off, but it’s not the huge problem some people make out. But then I always avoid big or at least new films on friday and saturday nights.

      Also by all accounts I’ve heard from my cinema manager friend if you want the ‘classic’ quiet cinema visit pensioner screening are second only to parent and child and autistic screenings in terms of talking, noise and generally not following the code.

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  8. Carl says:

    The risk is that they will cannibalize demand for regular-priced tickets from seniors willing to wait for that cheaper second run. If they are already selling out their first run or mainly attracting incremental business then it will increase their profits. Otherwise, not necessarily.

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  9. Jerome Solanum says:

    Because then seniors get used to coming to the theater and have positive associations with it. So, they’ll want to come even when the deal isn’t going on, and also possibly even bring along non-seniors (who pay more).

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  10. greg says:

    One aspect that I did not see mentioned is labor costs. Even if the theater does not make a profit, they are giving their employees a chance to work more hours. Getting more hours of work per week may prevent good employees from leaving and seeking better opportunities at another place of employment. Retaining good employees saves employers money by reducing training costs and maintaining efficiency.

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  11. Joe says:

    Seniors can have some ‘different’ ideas about what things should cost. For example, a fair restaurant tip is $0.25, air for tires at the service station shouldn’t cost $0.25 – way too much.

    Some of them just don’t seem to adjust for inflation – ever – and they’ve seen a bit of compounding.

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  12. Graeme McRae says:

    Besides the ways you mentioned, here’s how the theater makes a profit:
    1. Theaters keep less than half of ticket revenue for first-run movies, but quite a bit more than half for older movies. They share the rest with the studio that produced the movie.
    2. Theaters keep all of the concession revenue. They’re banking on the geezers spending some of their savings on popcorn.

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  13. Tim Almond says:

    Exactly. Cinemas, like hotels are very much about large fixed costs. You already have staff in doing background tasks for the rest of the day like restocking confectionary and selling tickets, you might as well open up some screens. If you have a small number of people for a showing, staff can do multiple roles.

    And for most major films, cinemas pay out a large percentage of the box office to the distributor. This doesn’t happen with say Life of Pi which is showing as my “Empire Seniors”. They’ll pay for the showing and very little, if anything of the box office.

    On top of that, you’re going to sell a bit of overpriced sweets/food to people (which is why cinemas have £1 saturday morning shows). If you’re not aware, cinemas showing blockbusters don’t make money from tickets in the first few weeks, but from popcorn and Pepsi.

    As a side note – a lot of this innovation is because of digital projection. My cinema won’t be having to get Life of Pi delivered and a projectionist putting it on a reel. This is allowing cinemas to use the same screen for showing many different films. They can put on an 11am senior show of a slightly older film (or even a classic), then 2pm and 5pm they can put on a Pixar animation, then put a horror film on at 8pm.

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  14. Enter your name... says:

    I understand that there is a per-person charge for showing films commercially, beyond the rental for mere possession of the film. Also, the tea, coffee, cookies, coffee cups, etc., themselves are not free. The list of variable costs needs to include more than just employee wages.

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  15. RGJ says:

    Tad scary that this is a mystery to the author. Loss leader at worst.

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  16. JJ says:

    I am familiar with this chain, Vue Cinemas. They regularly have over 50 guests in watching the films which are generally second run. They will pay £50 fixed rental on the film and they are showing the film whilst they are already open. It is a great way to get lapsed cinema goers into watching films again. It gets the, excited about coming features and they are just as likely to make a second trip to watch a new film in the same week

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  17. Clint says:

    The price of the ticket means almost nothing to the theater owner, since they recieve almost no revenue from it.
    Here is an extreme example. The drive-in movie theater (yes they still exist down south) in my city it costs 5$ per person to see a brand new movie. Although buying a beer (yes they sell beer at the drive in) costs 6$ per bottle. My tab for seeing Iron Man 3 was 36$ in beer but 10$ in ticket sales. If you do the math, the owner would break even if they gave away the ticket for free but made the requirement that you had to buy 2 beers while watching a movie.

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