Drop in movie ticket costs temporary, firms say

If so, it will be the 17th consecutive annual increase in a business whose prices have outpaced the effect of general inflation by more than half since 1999. Attendance has fallen about 10 percent in that time, or even more when measured as a share of the growing population.

Executives from Hollywood’s major studios are generally reluctant to discuss prices. But with domestic box office down 5.55 percent - to $6.42 billion from $6.80 billion - from last year at this time, according to Hollywood.com, even some of the best-compensated players are beginning to wonder if exhibitors and studios are pushing their luck with consumers.

Historically, the big theater chains like Regal, AMC Entertainment, Cinemark Theatres, and Carmike or their predecessors have been reluctant to raise ticket prices because profit margins were higher on the sale of popcorn and other concessions than from tickets. Thus, they had an interest in raising the number of attendees rather than maximizing film revenue that would be shared with studios. (Studios and exhibitors typically split the proceeds from each ticket sale, but the exhibitors alone set the price to consumers.)

More recently, though, theater chains turned to price increases, and especially to premium prices for 3-D and big-screen formats like IMAX, for added cash that sometimes has been used to pay large dividends to shareholders or to pay down debt.

Speaking privately to avoid conflict with their business partners, some studio executives contend that such payouts are draining the chains of money that could be used to upgrade or replace theaters that are charging higher prices but offering a less-than-premium experience.

Theater owners say otherwise. “The dividend payments were not at the expense of reinvestment,’’ said Amy E. Miles, Regal’s chief executive.

The industrywide average ticket price - which factors in low-price small-town theaters, second-run houses, and discount sales through outlets like Costco - can appear impossibly low to urban dwellers.