In Praise of Movie-Ticket Prices

Chatterbox loves to go to the movies. Mostly this is because he loves movies, but partly it’s because moviegoers enjoy one of the last great consumer bargains in America. This is not widely recognized. Especially in New York City (where prices for movie tickets, and most other things, are higher than they are elsewhere in the United States), politicians are constantly grandstanding about the high price of movie tickets. In March, New York City Council Speaker Peter Vallone issued a press release urging the Justice Department to intervene because Loew’s Cineplex had just raised ticket prices in Manhattan to $9.50. Vallone kicked up a similar fuss two years ago when Sony-Loew’s New York Lincoln Square Multiplex raised prices to $9. A decade earlier, then-Mayor Ed Koch actually urged a boycott when movie-ticket prices rose from $6 to $7. (Click here to read CNN’s coverage of the earlier controversies.) The boycott fizzled because … well, because, $7 wasn’t all that much to spend on an evening’s entertainment in Fun City.

Chatterbox lives in Washington, where a Saturday night visit to what is widely recognized as the area’s spiffiest movie theater, an Art Deco palace called the Uptown, costs $7.75 ($9 if you purchase an advance ticket by phone). That’s still “high” by national standards; according to the Motion Picture Association of America, the average movie-ticket price last year was a mere $4.69. Is that higher than it used to be?

Take a look at this chart, which Chatterbox found on a Web page about inflation that was forwarded to him and several other journalists by Jonathan Rauch, the economics columnist for National Journal. Observe that in constant dollars, movie-ticket prices more than doubled between 1935 (when they cost a quarter; that’s $2.93 in 1999 dollars) and 1970 (when they cost $1.55; $6.68 in 1999 dollars). Prices for movie tickets peaked, in constant dollars, during the 1970s. By 1980, movie-ticket prices had dropped to about $2.69–$5.46 in 1999 dollars, where they stayed until 1990. Constant-dollar movie prices dropped a bit more in the early 1990s, stabilizing during the middle 1990s at $4.70 to $4.80 (in 1999 dollars), where they remain.

It’s interesting to note that the 1970s, the decade when the price of going to movies reached an all-time high, was also the decade when Hollywood movies were better, in the aggregate, than they’ve ever been before or since. This was the decade of The Godfather, Chinatown, and more great films than Chatterbox can count by Martin Scorsese and Robert Altman. It’s tempting to conclude that if consumers paid more for movies, they would get better movies. But the 1980s, which produced movies that were worse in the aggregate than movies being made today (and much, much worse than the movies that were being made during the 1970s) would seem to disprove that hypothesis, because movie-ticket prices were higher then (in constant dollars) than they are now.

Perhaps the reason movies were so good during the 1970s had to do with the size of the audience. According to data (not available, alas, online) from the Motion Picture Association of America, weekly movie admissions dropped from 78 million in 1946 to an all-time low of 15.8 million in 1971. Weekly admissions stayed in the teens for most of the 1970s, rising to the low 20s during the 1980s. (Chatterbox assumes this has something to do with U.S. demographics.) Conceivably the shrinkage caused the moviegoing public to become more like shoppers in a boutique than shoppers in a supermarket–i.e., less interested in mass-produced items, and more interested in quirkier handcrafted products. But if that’s true, it cannot be extrapolated that movies continue to get worse as audiences continue to expand. If that were true, movies would be worse today (weekly admissions numbered 27 million in 1997, the last year for which data are available) than they were in 1985 (when weekly admissions numbered 20 million). But in fact, movies are better today (assuming you don’t count Eyes Wide Shut).