$6 movie tickets? There's now an app for that
AN AUSSIE app which uses Uber-style dynamic pricing to offer movie tickets for as cheap as $6.25 has attracted more than 10,000 subscribers in just a few months.
Choovie, a Melbourne-based start-up which launched in March after two-and-a-half years of development, has been trialling in 20 independent cinemas and will soon have 11 more on board.
The app integrates with existing ticketing systems to fill up largely empty cinemas, using pricing algorithms based on forecast demand to sell tickets that would otherwise go unsold.
According to co-founder Shane Thatcher, an economist by training, the idea came when he and his partner Sonya Stephen realised more than 80 per cent of cinema seats go unfilled.
"We are pretty common moviegoers, and we'd go to the movies and see fewer and fewer people in there," Mr Thatcher said.
"It would drive me nuts. It culminated in us dashing around a multiplex once to work out how many people were in there at quarter to six on a Wednesday. Out of 13 cinemas, there were 35 people."
To combat stagnating ticket sales - which have been falling on a per capita basis - cinema chains have been trying to maximise revenue per customer through higher standard ticket prices, 3D glasses, beverage and snack sales and premium services like gold class.
According to Screen Australia, while the average ticket price has risen just 33% in the past decade from $10.37 to $13.80, the top ticket price has risen by more than 61% from $15.50 to $25.
"Essentially the cinemas are saying, we're not getting as many people in, but we want to get more from them," Mr Thatcher said.
"Ticket prices have gone up, the offering is better, but it does go out of reach of the average person."
Choovie's goal in the next three years is to get 4-5% of the 90 million tickets sold every year in Australia.
"In the background of Choovie is an algorithm that estimates the capacity for every single movie time and combination," Mr Thatcher said.
"If it's an obscure French film on Tuesday at 2pm, it's unlikely to be very busy, but if it's Friday opening night for Rogue One it's probably chockers.
"That's pretty consistent, so you can estimate how those demand profiles will look. So rather than it being a last-minute thing, it's set up in advance."
He said while they had expected the younger tech-savvy 18- to 35-year-olds to be using the app, they were actually seeing an older demographic and a "a lot of families".
"If you're sitting at home on the school holidays with four kids and you want to go to the movies, it's a pretty expensive proposition," he said.
Choovie bills itself as a "win-win" for the cinemas.
It costs them nothing to integrate - the app charges a standard booking fee of $1.25 per ticket - and maximises profits.
"Now we've got the wheels rolling, the cinemas are starting to see more people coming in, and people who they wouldn't have seen before," Mr Thatcher said.
"We're about three months in now and we're really starting to see the behaviours we expected to see, which is when people are going to the movies with Choovie, they're going outside of peak times, so it's really spreading the revenue out to the cinemas.
"What we're also seeing is if you make it work for people, they'll go more often. We've had people go to the movies every single day for a week."
And while the seats sold on Choovie may be infill, Mr Thatcher said getting stuck down the front row was "a really low risk".
"I'd be very happy if that becomes a problem because it means a lot of people are using the app," he said.
"A lot of the seats we're selling, it's not like there's only 10, 20 seats left. They're more like 50 to 80 seats left (out of 100 to 200). Some of the cinemas we work with allocate seating and some don't."
The big hurdle, however, will be convincing the major chains to get on board.
According to market research firm IBISWorld, the three chains combined make up two thirds of the $1.7 billion cinema industry in Australia, with Event holding 28.7% market share, followed by Village Roadshow on 18.8% and Hoyts on 18.4%.
Mr Thatcher said he had been in discussions with all three.
"They said, 'Prove it works'," he said.
"We have to prove they can make more money, and also that essentially we're not cannibalising the market. For instance, if they're selling $20 tickets, that those don't just disappear and everyone's buying $10 tickets.
"People need to be going more often, and choosing to go at those other times."
The cinema chains have been contacted for comment.