How High Will Movie Ticket Prices Go?

NEW YORK (MainStreet) — Contrary to what your parents or grandparents may have you believe, there was never really a prolonged era when a typical ticket to the movies cost a nickel. No, it used to cost a nickel and a couple pennies.

The average price of admission was a blissfully low seven cents back in 1910, just five years after America’s first movie theater opened its doors in downtown Pittsburgh, according to the oldest data on record from the Motion Picture Association of America. The golden era of seeing a feature film for less than a dime didn’t last too long either: By 1924, the average price had shot up to 25 cents, and with few exceptions, that amount has only continued to increase.

Consumers paid an average of $7.89 for a movie ticket in 2010, a 5% increase from the previous year and the highest amount yet recorded. If ticket costs continue increasing at this rate, average movie prices will break the $8 milestone this year. That’s certainly a long way from the days of seven-cent movies, but it may not be quite as much of a price increase as some believe.

“People are always nostalgic and lock in whatever prices they remember paying when they were much younger,” said Patrick Corcoran, director of media and research for the National Association of Theater Owners, an industry trade group. “In real numbers, prices are more expensive today, but if you adjust for inflation, we have managed to hold the price down over time.”

During the past 35 years, ticket prices nearly quadrupled – from $2.05 in 1975 to their current rate – but as Corcoran rightly noted, inflation increased even more quickly. According to the Bureau of Labor Statistics, if movie prices had increased at the rate of inflation starting in 1975, a ticket would have cost $8.35 in 2010, or nearly 50 cents more than it actually did. So in the long term, ticket prices have remained as good a value as ever, given the standard price increases in other consumer goods over time.

But this point does not hold true if you focus on price increases just for the past decade. In 2000 the average movie ticket cost $5.39, and had it risen on par with inflation, that would amount to $6.86 today, about two bucks less than current averages. This is why it may feel like you’ve been forced to shell out significantly more money to see movies in recent years.