Essay On Cinema Industry

It is a good entertainment experience to watch film or concerts on causal occasion. However, I am always confused as to why all seating prices are the same for a film in a cinema. Why don’t cinema promoters set different ticket prices for different seats from the first row to the last row in a room that is available to hold almost 200 audiences? While different seating prices vary greatly for concerts, the highest prices at concerts are over hundreds of dollars more than cinema prices. So, why does the cinema industry and concerts industry set different seating price strategy? After combining my experience and researching information, I think that there are four possible reasons to explain the pricing strategy for cinemas and concerts. The

Moreover, because of high demands for concerts, consumers are willing to pay higher prices to enjoy a better experience. Due to the difference in consumer purchasing power, in order to maximize profits, concerts industry will set different pricing for different classes, hence resulting in different seating prices for concerts. Transaction costs contains search and information cost, bargaining costs and enforcement costs.

Search and information costs: Comparing cinema industry and concerts industry, search and information costs for cinemas are less than concerts industry. The main search and information cost for cinema industry is that they are paying fees to have property rights to show the movies. These costs are enormous, but as I indicated in the second paragraph, the cinema industry will show one movies for several times per day for few weeks. Although its fixed costs are high, there are no extensive cost for the future and the number of consumers do not differ significantly. While concerts not only just contain fixed cost, they also have huge variable costs including costs from

If I must test this puzzle, keeping all other variables constant, considering transaction costs, for instance, enforcement costs and searching costs. Concerts industry account for a larger amount of enforcement costs and searching costs than cinema industry and thus it is a sensible way for concert industry to separate seating price which will make concert industry maximize profits. On the other hands, if there is no enforcement costs and searching costs exist in both industry, the production costs for concerts are also much higher than cinema industry. Thus, whatever transaction costs and production costs, the costs for concerts are higher than cinema industry, it is sensible way for concerts to set different seating price while the enforcement costs for setting different seating price is too expensive in cinema industry, thus cinema ought to unified seating