Why aren’t Barbie tickets more expensive?

That is the theme of my latest Bloomberg column, as for mamny showings there is excess demand and long waits to see the movies.  Here are some of the reasons why markets are not clearing:

A more relevant factor behind the static pricing has to do with social networks. Both the movie theater and the studio want to attract customers who will talk about the movie afterwards, whether directly to their friends or on social media. They also want customers who will want to see the movie multiple times, and generate a kind of cult following.

For the most part, younger audiences better serve these functions than do older audiences. Younger people have on average more friends and see them on a more regular basis, and are more likely to text friends or post on TikTok. They generally have greater enthusiasms. Older people are more likely to have more limited social networks, filled with other older people, and if they have children at home, less likely to go out.

In other words, in terms of publicity at least, a younger moviegoer is more valuable than an older moviegoer. (It is a painful admission for an older moviegoer like myself.) So if theaters raised their prices, the audience would skew older and wealthier. It would be harder for the movie to generate much buzz, and what buzz it did generate would have less impact.

Keeping the price low, on the other hand, favors those willing to scour the internet for tickets, or those who can commit to a scheduled movie date and time in advance. This is typically a younger group.

A second reason for keeping prices low is that moviegoers might feel ripped off if they had to pay a higher price for every movie they really wanted to see. In the short run, the theater would pull in more money, but over time moviegoing could become less popular. Customer goodwill matters.

A third reason that the price does not rise is concession income. A movie theater earns much of its income — it can be almost one-third of revenue for some chains — from selling soda, popcorn and other items, and typically it does not share that money with the studios. That makes revenue from ticket sales a smaller share of the overall profit.

I am looking forward to the rest of this year in movies.