Ticket Buyers Don’t Care What You Spend on Your Show
A couple weeks ago, the BBC website reported on the comments made by the head of a UK movie studio that suggested movie tickets should be priced based on the costs incurred in making the movie.
So, for example, the article said, “An independent British film should cost 4 pounds, and a Hollywood blockbuster 10 [pounds].”
This led to a discussion in the live entertainment and arts world whether the same thing might be true for live entertainment tickets, and a lively one it’s been. But I just have to say, we’ve covered this territory before, and the answer is quite simple. No, prices shouldn’t be based on your costs.
Why? Because buyers don’t care what you spent. All they care about is what value they place on the show and the ticket.
Costs, in other words, are YOUR PROBLEM, not theirs.
The BBC article’s example of “an independent British film” and a “Hollywood blockbuster” are a great way for me to explain this. Waterworld was a Hollywood blockbuster. So was The Lone Ranger and R.I.P.D. Should people have paid more for those because they cost more? Hell no! If anything, they should have started discounting as soon as the initial numbers came in.
By the same token, Four Weddings and a Funeral, The Full Monty and Lock, Stock and Two Smoking Barrels were all independent British films that people liked and bought. Should they have been cheaper? Why in the world would a producer drop the price on something that people are gobbling up?
Maybe small films should be priced lower, but if so, it’s because of demand and interest levels, not because of costs.
And as to whether live entertainment prices should be based on costs, the exact same principle applies: Hell no, they shouldn’t. If your small theater show is a big hit, don’t cut the price! And if your major league professional sports team is laying an egg at the box office, you better think about dropping the price.
This is a mindset that has to be eliminated. Prices are about the value people place on something, not the money you spent to make it. If you can’t get over that hurdle, you’ll probably never really understand pricing.
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