Ticket Prices
It's easy for us to think that the price of the ticket has only increased in our lifetimes, but the reality is that ticket rates have been increasing for a full century! Indeed, since the time that movies became a hot commodity in the early 1900s, as inflation has occurred within our economy, a similar kind of ticket price inflation has occurred as well. Since the days of nickelodeon theaters in 1905, when tickets were sold for just five cents, to the days of IMAX theaters in 2009, when tickets can sell for twenty dollars, ticket costs have certainly skyrocketed. Using the table to the right, you can see the average ticket price (via the MPAA) at the movies since way back in 1910. Some data is missing because, sadly, records weren't always kept, but it's not difficult to guess the ticket rates in the missing years. As you can see, ticket fees have gone up rather quickly, but that's just due to regular price inflation, right? Wrong! Take a look at this little equation, made using InflationData.com's calculator: Ticket Price Inflation (1924-2009) - 2,872% According to this data, while general prices in the United States have multiplied by about 11 in the last 75 years, the average price of a movie ticket has multiplied by about 27! There a couple of reasons for this huge increase. Let's briefly go over them. 1. While the hike in ticket price isn't only due to economic inflation, it is a big factor. 2. A lot more people used to go to the movies than do today. Inflated tickets price keep revenue up, even though attendance is lower. 3. Studios used to own the theaters in which they would distribute their films, so prices were kept low since there was no third party involved. In 1949, due to a Supreme Court ruling, this all changed and suddenly the only method of distribution was through privately owned theaters. This shift caused studios and theaters to work out a revenue-sharing system, and in order for both the theaters and the studios to keep earning the sort of profits they wanted, prices were (and continue to be) raised. The bottom line is that, even with all the ticket price increases, people are still going to the movies. In 2008, there were 1.364 billion admissions in United States theaters, which generated $9.791 billion in ticket sales, a record revenue. Of course we must remember that back in the 1940s, each year would see upwards of 2 trillion admissions! Thus, while theater attendance has certainly declined, elevated prices for tickets have kept the box office alive, and until people stop going to the theaters, expect their cost to keep going up, up, up. It should be said though, that modern movie theaters really receive much less revenue from ticket sales than one might think. I'll explain more about that in a bit.
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