The theatre gets a stadium-style seating upgrade.

I went to my local AMC Theatre for a rare mid-week date with my wife. Its been months since we’ve seen a movie, and we were surprised to be treated to a new part of the box office experience when the attendant has us pick assigned seats from a touch-screen theatre layout.

My wife asked whether ticket price changed based on what we picked, and when the attendant replied that it did not, she openly wondered why the theatre would bother installing this expensive-looking technology and changing the service. AMC claimed it as improvement to the experience, but I think my spouse correctly sensed a coming change, with movement to a pricing method that varies ticket prices by theatre section.

Truthfully, I’d be alright with it, and I’m surprised theatres haven’t made this change some time ago.

The theatre is improving their service process for their own benefit - extracting consumer surplus from the seats they believe people will be willing to pay more for. Sports & concert venues long succeeded in segmenting their audience by willingness to pay for various levels of seating. (Though scalpers do better at understanding & extracting consumer surplus. I’m waiting for the day when the venues "in-source" the scalper business model to gain even more revenue from scarce commodity seats.)

It’s well accepted that mid-theatre seats, centered on the rail seats are the best in the house, while the front row, side angle seats are the worst. Personally, I’d be willing to pay a buck or two more to sit in an area where I won’t have to call a chiropractor the next day.

Will it dissatisfy some? Of course. A majority of customers will be paying more for the same level of service as they received before the change. It may even offend the egalitarian sensibilities of those who prefer the model that rewards personal time investment with the best seats in the house.

But it is fair. Based on what a customer is willing to pay, AMC undercharges for some seats and overcharges for others. Changing the pricing of the seats to gain that revenue isn’t draconian, its good business.

Now, when I start seeing scalpers outside movie theatres, I may reconsider...