Are On-Demand Movie Rentals Really Cheaper Than the Theater?

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Sunday night’s Oscars are supposed to be a celebration of Hollywood’s best and brightest, but they’re also a reminder of the cost and overall state of a night out at the movies.

Both the Academy Awards and Sundance Film Festival are designed to bring a little warmth into a cold winter, but the $8.97 average cost of a movie ticket in the United States has moviegoers a bit heated for other reasons. According to the National Association of Theater Owners, that price is nearly 25% higher than it was a decade ago. Meanwhile, the 1.23 billion tickets sold last year in the U.S. was the lowest head count at the movies since 1992.

While giant multiplexes have brought the total number of movie screens in the United States to an all-time high of nearly 40,400, the number of actual theaters sits at 5,750. That’s up from an all-time low of 5,683 in 2012, but still well below the 7,500 that existed two decades ago.

We realize that on-demand services have made it easier to rent movies at home (or on just about any device you please), and have reduced the price of movies for those willing to wait — but is it still the most cost-effective option?

We chose three common ways to see movies — first-run theaters, second-run theaters, and on-demand pay-per-view — to determine just how much the price of movies is changing American theatergoing habits, and if there isn’t a better way for moviegoers to experience the films they love without being charged an Oscar winner’s paycheck to do so.

First-Run Theaters

As you’re probably aware, that $8.97 average ticket price varies wildly not only by market, but by theater location. The Empire AMC 25 on 42nd Street in New York just off of Times Square, for example, starts its adult tickets for Black Panther at $16.29, though early-morning matinees can be seen for around $8. That same film at the AMC Classic Cobblestone in Des Moines, Iowa, however, gets $9 for an adult ticket, with a $6 matinee. Big chains like Regal and Cinemark have similar disparities across the country.

Theater chains have attempted to pad higher ticket prices by offering amenities like comfier seating, extensive food and alcohol options (in some cases, delivered to your seat), and enhanced audio and video options (Dolby sound, 3D, IMAX). To some, they constitute added value; to others, they just make high prices higher.

However, there are ways to whittle the price down beyond just skipping the concessions counter and shrugging off upgrades. Costco, for example, sells four-packs of fixed-price tickets to AMC theaters for $35.99 (which excludes customers in New York, New Jersey, or California) or $42.99 (for those higher-priced locales).

Whether or not a $9 or $11 ticket constitutes a deal will depend largely on the market you’re in (as it will for Regal Cinemas or Cinemark tickets with a similar deal). But it’s already above the national average, and the deal doesn’t improve in bulk, so even a 10-pack will offer the same price.

Another worthwhile approach is skipping the big movie chains altogether and finding an independent theater. One-screen locations like the Cinemagic Theater, Moreland Theater, Roseway Theater, and St. John’s Theater in Portland, Ore., for example, show first-run films in a slightly less tech-savvy setting for $7.50 to $8 adult general admission and $5.50 to $6 for matinees — with discounts throughout the week.

Other independent theaters, like the Coolidge Corner Theatre in the Boston area, will offer memberships that either knock a few dollars off the price of admission and concessions, or give you free admission and some popcorn. The more movies you see, the more of a value it becomes (25 movie tickets at a $3 discount pays for a $75 annual membership).

And if you want vengeance on both Hollywood and the theaters, there’s always MoviePass. For $9.95 a month, you get to see as many movies as you want at participating theaters and free up money for concessions and upgrades. However, MoviePass buys up tickets and doesn’t make it easy for theaters to opt out. Nobody knows how that’s going to play out for theaters – but going to see two new films a month for $5 apiece might work out just fine for frequent moviegoers.

Second-Run Theaters

In the Pacific Northwest, the McMenamins chain of brewpubs also runs a handful of second-run theaters that charge between $2 to $4 per showing — or nothing if you stay at a room in its Kennedy School grade-school-turned-hotel.

Independent second-run theaters like The Academy and The Laurelhurst show slightly aged films like Coco and Murder on the Orient Express for $3 to $4 while serving beer, wine, pizza, and even sushi. They’ll also show monthly schedules of themed classics and, in the case of the Academy, will babysit your children during weekend shows.

While the emergence of multiplexes and the shrinking window between theatrical and on-demand release has pressured second-run theaters, they still have enough life in them for AMC to dub certain theaters AMC Classics and charge as little as $1.99 for second-run showings in places like Fort Collins, Colo. That said, the $2 theater has been around for ages, and isn’t necessarily helped by AMC Classics locations that charge up to $5.99 for second-run films. Remember that price…

On-Demand

For on-demand movies on cable, satellite, or streaming services, including Amazon’s Prime Video or Walmart’s Vudu, $5.99 is the magic number for newer and more popular releases. Occasionally, you may see a $2.99 discount on a film like the Oscar-nominated World War II epic Dunkirk, or a 99-cent rental on an independent film like Good Time (which Amazon makes available for free to Prime members).

But there’s a catch for much of the on-demand content: For cable and satellite, you’ll need a subscription to access those on-demand films. According to the Leichtman Research Group, the average monthly cable bill is $85 and the average monthly satellite bill is $100. That basically leaves services like Amazon Prime Video or Vudu — which also require a monthly bill for Internet service. Broadband service can range from $40 to $80 a month in urban areas, but rural Internet customers know the price can reach well above $100 for service good enough to stream an HD movie.

While $5.99 for the cost of streaming a movie into a room with a family of four would be a fine deal on its own, the folks viewing those movies almost never consider the cost of the infrastructure bringing them in.

To actually make that film “cheaper” than at a second-run theater — or even a discounted first-run movie — you’d have to wait for it to move to a streaming service you’re already paying for (and Netflix and Amazon Prime’s monthly payments have each risen in the last year).

Say what you will about a $16 showing of Black Panther: At least it isn’t charging you an ongoing $60 a month just for the chance to rent it.

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