Saving Money on Movies

Hollywood uses some advanced pricing strategies to increase profits, but they also selectively discount and you can save money if you know where to look.

Hollywood is really good at making profits, and a big part of that relies on the concept of differential pricing – selling slightly different versions of their products at very different prices.

Sometimes this means selling a slightly different version of their product for a lot more money. For example it might cost $19.99 to see a movie in IMAX 3D, $15.99 to see it in 3D and $12.99 to see it on the regular screen.

$19.99 might seem like a lot of money to spend on movie, especially if you are taking an entire family, but remember – it is entirely optional. The core product is $12.99. The more expensive options were introduced solely so that Hollywood would have something more expensive to sell you. Many experts on cinema feel that the 3D versions are inferior. If the 3D prices feel like a cash grab it's because that is what they were designed to be! Simply decline to pay them.

Same thing when the movie is released to the home video market. It's not uncommon to see blockbuster movies released simultaneously in as many as seven different versions at the same time, and sold side by side in the same store.

These versions sell for very different prices – often between $17.99 (for the simple DVD) and $35.99 for the Blu-Ray+DVD+Digital Copy special edition combo pack.

It is an enormous spread in price and, again, the whole idea is that Hollywood always want to offer a more expensive option. The goal is to give the person that is prepared to pay more a chance to do just that.

At the core the products are almost all the same – a movie on an optical disk. The Blu-Ray offers better resolution, but for people with upconverting DVD players and less-than-huge televisions the difference may be negligible.

Getting multiple disks (DVD+Blu-Ray) can be handy for parents (one for the house and one for the van) but is mostly pointless otherwise. If you only need one disk don't pay extra for more.

If on the other hand you do want more than one disk, these combo packs are a great deal. Hollywood is recognizing the diminishing marginal utility of their product and pricing accordingly. If the DVD is $17.99 and the Blu-Ray is $21.99 very few people would be inclined to buy both... but if bundled together and sold for $24.99 it seems like a great deal. But only if you want multiple discs! Don't buy extra disks just because it seems like a great deal – paying more for extra disks only makes sense if you really want extra disks. And then it is a good deal!

The other part of the formula is selectively discounting. Hollywood recognizes that there are people that will not pay full price for their product, and they will give them discounts. They want to be sure that they don't also discount to people that would pay full price, so they use hurdles. Hurdles discourage people that would pay full price from taking advantage of discount.

The best example is the discounted pricing on Tuesdays. You can save a lot of money by going to the movies on a Tuesday, but most people don't want to go on a Tuesday night. Tuesdays also means dealing with a lot of noisy teenagers that tend to talk throughout a movie. This is enough to discourage all but the most serious bargain hunters.

You can also save money on tickets by joining the theater chains loyalty program – something that will typically get you discounts on both tickets and snacks. Some programs have a special that lets you but enough points to see a $19.99 IMAX 3D ticket for less than $10, but it is complicated enough that it only appeals to people that are really serious about saving money . You can also buy discounted passes at Costco – the hurdle here being that you have to be organized enough to buy the pass in advance.

One of the best ways to save money is simply by waiting. Even if you take advantage of discounts it would probably cost at least $50 to take a family of four to the movies. If you can wait about four months you can buy the DVD and watch it at home (multiple times) for less than $20, and the DVD price will just keep going down until eventually it end up in the discount bin.

About the same time as the DVD release the movie starts to appear on pay-per-view, where you can usually watch it for about $5 (although there will almost always be a more expensive HD version available!). After that it appears on Netflix, where you can enjoy it for even less money. Eventually it can be seen for free on network and/or specialty channels... as long as you are prepared to wait and sit through commercials to watch an edited version.

The longer you wait the lower the price, so a little patience can save you a lot of money.