Monday Oct 11, 2010
The trip to see the movie Wall Street demonstrated another lesson regarding managerial accounting and marketing. Two adults and three children arrived at the ticket window just before I did. Upon hearing the total admission price I heard the man say, 'gee!' The two were so stunned that the fellow selling the tickets suggested they step aside so I could purchase while they made a decision. I observed to the parent that he was of course quite correct. It was 12:20, the parking lot was near empty, the theater was near empty, the kids wanted to see a movie (no not Wall Street) but the price was a big setback.
That of course is ridiculous. The lesson taught by Southwest Airlines is that the priced needs to fall until the seats are full. When I was in college there was a another airline named Trans Texas Air, derisively referred to a Tree Top. It flew turbo props. I flew from Austin to Midland one time during all of college, the one way ticket was a whoppping $36, at a time when gasoline was 40 cents a gallon. Trans Texas finally ceased doing business and no doubt most of the seats were empty that last day.
I don't know if the kids got to see the movie, I suspect an ice cream cone was substituted instead.
Inside I thought I might actually get a popcorn, did I want to move from small to medium for another dollar, okay that will be $7. Like the husband outside I was stunned. I declined the popcorn.
This model won't work. It never does. Whether it is an airline or a movie theater the seats need to be full. During the Depression movies flourished, for a few cents one could forget the Depression and sit inside removed from problems for a couple of hours. Donwloads fill that slot now. I was at Regal Entertainment Group RGC, It peaked earlier this year at 17 and is now 14, moving opposite of the overall stock market which is up, no wonder. Gee a matinee ticket and popcorn is the same price as the stock, what's wrong with this picture?
Professor Elam 
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