Movie theaters get thumbs-up from low-budget consumers

The cost of going to the movies is lower than it was in 2019 and budget-conscious consumers have found the local AMC Theater a cheaper Saturday night out than Dave & Busters.

In a new white paper, cell tower traffic-tracker Placer.ai notes that trade area analysis of three of the biggest theater chains (AMC, Cinemark, and Regal Cinemas) finds that the median household incomes of seat-holders has decreased since 2019.

The HHIs of AMC Theater viewers fell from $63,400 to $61,600 from 2019 to 2022, and Regal’s audiences dropped from $67,200 to $65,200.  Cinema chains lost a billion customers in 2020--when just 215 million tickets were sol--compared to 1.2 billion in 2019, according to the Motion Picture Association of America. Ticket sales topped 800 million last year, and Placer.ai posits that Gen Z may be responsible for much of the rebound.

In 2022, AMC, Cinemark, and Regal all saw distinct increases in Gen Z ticket-holders who have yet to reach their peak earning years. Theater chains’ recent investments in sound and picture quality likely appeals to Gen Zers, as well as the lower cost for a night out.

“Chains that earn Gen Z’s loyalty with a quality movie experience can capitalize on the many years of movie-going this young crowd has ahead of it,” said Placer.ai analyst Ezra Carmel.

While average movie ticket prices rose from $9.16 in 2019 to $10.53 last year, the cost of going to the movies is actually lower now than it was in 2019 when adjusted for inflation. Most cinemas now collect their profits from bars and restaurant menus that deliver food and drink to patrons in reclining equipped with fold-out tabletops.

That’s put average per-customer spending at cinemas on the rise, according to Placer.ai, which predicts that theater traffic will continue to grow throughout the rest of the year.