Cheap Thrills Getting Harder to Find

June 7, 2002 — -- Looking for an entertainment bargain? Rent a video or DVD.

If you want an evening out, you may have to dig for some extra cash. Entertainment is one of the most rapidly rising costs in America. Since December 1997, the cost of admission to entertainment and sporting events in cities easily has outpaced inflation and the escalating cost of medical care.

"Sports is about as bad as it gets" for cost increases, says Malik Crawford, an economist for the Bureau of Labor Statistics.

According to the Consumer Price Index's latest data cycle, the cost of sports admission rose an average of 6.1 percent annually from December 1997 to April 2002, while the city average admission to movies, theaters and concerts rose 4.5 percent annually. Inflation was just 2.5 percent over the period, below its historical 3.3 percent average annual rate, and medical costs rose an average of 4.2 percent annually.

$10 Movies Taken in Stride?

In New York City, the nation's most expensive market, rising ticket prices in 2001 reached new milestones — $10 for movies and $100 for some Broadway shows. The media took note, but people kept coming, judging by a nationwide rise in movie attendance last year and the current hot summer at the box office.

Protests have been few. But a Los Angeles-area man who organized a one-day boycott over the Internet says families are fed up.

"Box office was down that weekend," said the activist, Mark Jonathan Davis, who runs WeCanDoThis.com. "Families across the United States are finding it harder to invest $50 for movie tickets and popcorn for their family, when they could probably just go home and make it a Blockbuster night for a couple bucks."

Davis plans to organize another boycott for a full weekend in August. But former New York City Mayor Ed Koch, a noted movie buff, has observed most people seem not to have the energy to protest, and instead just grin and bear the increases.

"People are addicted," Koch said. "If the price of heroin goes up, I don't think it reduces usage. If the price of movies or sports goes up, I don't believe people stop going. They just stop spending money on other items that are more important if you look at them rationally."

Koch learned his lesson years ago when he got fired up over a movie ticket price increase from $6 to $7 and called for a boycott and picket. Nobody showed up but him.

"I was mayor and I could command a lot of attention, but I couldn't command any people to get into the picket line with me," Koch said. "The minute I looked back and there were no picket people behind me, I walked into the movie."

Concerts, Sports Are Main Offenders

Perhaps the apparent apathy can be explained partially by the fact that while the movies and Broadway recently have outpaced inflation, other entertainment ticket options have risen far more quickly, according to an ABCNEWS.com analysis of various annual average ticket prices.

Arena concerts had the steepest rise. The top 50 tours charged an average of $47.66 in 2001, up from 1988's average of $19.18, or $28.71 in 2001 dollars.

Gary Bongiovanni, editor-in-chief of Pollstar, a concert industry trade magazine, said he is not very surprised the price of arena concerts has risen fastest. He added that high rates charged by scalpers led some within the concert industry to feel prime seats were underpriced.

"It started with the very biggest acts," Bongiovanni said. "Now it's really all the acts … with the exception being some of the younger rock acts, recognizing the fact that their audiences don't have the same discretionary income to spend on the tickets as an Elton John fan or a Rolling Stones fan."

With increasing player salaries, club-level seating and luxury boxes, and a number of new stadiums and arenas to pay for, baseball, football, basketball and hockey were right behind concerts for ticket price increases over the past decade, according to figures from Major League Baseball and the Team Marketing Report, a sports industry newsletter.

Baseball tickets, which averaged $3.45 in 1976, held almost even with inflation until taking off in the 1990s. In 2001 dollars, the price rose from $11.23 ($8.64 in actual dollars) in 1991 to $18.99 in 2001. Inflation-adjusted football tickets rose from $32.78 ($25.21) to $53.64 over the period and basketball tickets from $29.28 ($22.52) in 1991-92 to $50.10 in 2001-02. Inflation-adjusted hockey tickets rose to $49.86 in 2001-02 from $40.02 ($33.49) in 1994-95, the earliest year for which Team Marketing Report had data.

  Raw data courtesy of:

   Pollstar (arena concerts)

   Team Marketing Report, Inc., and Major League Baseball (sports)

   Motion Picture Assn. of America and Nat'l Assn. of Theater Owners (movies)

   League of American Theaters and Producers, Inc. (Broadway)

   Kagan World Media (VHS/DVD)

Broadway Undervalued?

Broadway ticket prices have risen more modestly than sports or concerts, though they have topped inflation more consistently than movies over the years, rising from an average of $7.43 ($33.91 in 2001 dollars) in 1970-71, the earliest season charted by The League of American Theaters and Producers, to $58.73 in 2001-02.

The Producers introduced the $100 theater ticket in April 2001, only to blow that figure away by announcing in October that select tickets would cost $480, partly in an effort to compete with scalpers.

Jed Bernstein, president of The League of American Theaters and Producers, said increasing attendance for Broadway shows — and prices in the hundreds of dollars demanded by scalpers — show tickets were priced "artificially low" for a high-risk medium where less than one show in five breaks even.

"The desire for the product way outstrips inflation and way outstrips the price increases," Bernstein said. "It's a private enterprise, and the people involved do have some responsibility to have some return on investment."

Movies Steady Over Long Haul

Defenders of movie ticket price increases point out that while prices have increased in recent years — to an average of $5.66 in 2001, according to the Motion Picture Association of America and the National Association of Theater Owners — they long lagged behind inflation.

Although the average movie ticket price rose from 47 cents in 1951 to $1.65 in 1971, to $4.21 in 1991, the picture changes when the prices are stated in constant dollars. Using 2001 dollars, the price rose from $3.20 in 1951 to $7.22 in 1971, but then fell to $5.47 in 1991, and even dropped below $5 in 1994 and 1996.

Theater owners say increases since then can partially be blamed on new theater construction, as well as upgrades involving features such as stadium seating and digital sound systems.

"Between the mid-'90s and the year 2000, we went through the most significant upgrade in theaters ever," said John Fithian, president of the National Association of Theater Owners. "All that building was incredibly expensive — so expensive, in fact, that we had 12 major companies go into bankruptcy. … Given all that, we still only raised ticket prices 34 percent in 10 years."

Of New York's $10 tickets, he added, "I don't think it's shocking. What else can you do out of the home for professional high-level entertainment for that kind of money? Nothing."

Derek Baine, a senior analyst covering entertainment for the media research company Kagan World Media in Carmel, Calif., said the $10 tickets may not represent the state of entertainment prices in rural America.

"In major markets, the demand is there so they push through price increases on everything much more than in other markets," Baine said.

End of Increases?

Some analysts believe the trend toward rising ticket prices may be peaking.

"There's too much of everything in the media and entertainment world, and the result of that will be diminished pricing power," said Harold Vogel, author of Entertainment Industry Economics and head of Vogel Capital Management, a New York venture capital firm. "Most of these things have seen the maximum rate of price increase already, and we are headed for a leveling off if not an actual decline."

Kurt Hunzeker, contributing editor of Team Marketing Report, sees the same trend in sports, where basketball and hockey ticket prices have declined in 2001-02 relative to inflation as attendance growth has stalled.

"When people stop showing up, that's going to be your number one indicator," Hunzeker said. "You're already seeing some teams reduce ticket prices."

Various pressures long have held down prices in the video rental market. In fact, the price of a rental actually has gone down over time relative to inflation, even as another home entertainment option — cable television — has risen steadily.

"The price of buying a video or DVD has been dropping dramatically; so as the price closes between actually buying the videotape and renting it," it limits rental price increases, Baine said. "If we hadn't had DVDs, it's almost certain that the rental market would be flat right now."

  Raw data courtesy of:

   Pollstar (arena concerts)

   Team Marketing Report, Inc., and Major League Baseball (sports)

   Motion Picture Assn. of America and Nat'l Assn. of Theater Owners (movies)

   League of American Theaters and Producers, Inc. (Broadway)

   Kagan World Media (VHS/DVD)

Broadway Undervalued?

Broadway ticket prices have risen more modestly than sports or concerts, though they have topped inflation more consistently than movies over the years, rising from an average of $7.43 ($33.91 in 2001 dollars) in 1970-71, the earliest season charted by The League of American Theaters and Producers, to $58.73 in 2001-02.

The Producers introduced the $100 theater ticket in April 2001, only to blow that figure away by announcing in October that select tickets would cost $480, partly in an effort to compete with scalpers.

Jed Bernstein, president of The League of American Theaters and Producers, said increasing attendance for Broadway shows — and prices in the hundreds of dollars demanded by scalpers — show tickets were priced "artificially low" for a high-risk medium where less than one show in five breaks even.

"The desire for the product way outstrips inflation and way outstrips the price increases," Bernstein said. "It's a private enterprise, and the people involved do have some responsibility to have some return on investment."

Movies Steady Over Long Haul

Defenders of movie ticket price increases point out that while prices have increased in recent years — to an average of $5.66 in 2001, according to the Motion Picture Association of America and the National Association of Theater Owners — they long lagged behind inflation.

Although the average movie ticket price rose from 47 cents in 1951 to $1.65 in 1971, to $4.21 in 1991, the picture changes when the prices are stated in constant dollars. Using 2001 dollars, the price rose from $3.20 in 1951 to $7.22 in 1971, but then fell to $5.47 in 1991, and even dropped below $5 in 1994 and 1996.

Theater owners say increases since then can partially be blamed on new theater construction, as well as upgrades involving features such as stadium seating and digital sound systems.

"Between the mid-'90s and the year 2000, we went through the most significant upgrade in theaters ever," said John Fithian, president of the National Association of Theater Owners. "All that building was incredibly expensive — so expensive, in fact, that we had 12 major companies go into bankruptcy. … Given all that, we still only raised ticket prices 34 percent in 10 years."

Of New York's $10 tickets, he added, "I don't think it's shocking. What else can you do out of the home for professional high-level entertainment for that kind of money? Nothing."

Derek Baine, a senior analyst covering entertainment for the media research company Kagan World Media in Carmel, Calif., said the $10 tickets may not represent the state of entertainment prices in rural America.

"In major markets, the demand is there so they push through price increases on everything much more than in other markets," Baine said.

End of Increases?

Some analysts believe the trend toward rising ticket prices may be peaking.

"There's too much of everything in the media and entertainment world, and the result of that will be diminished pricing power," said Harold Vogel, author of Entertainment Industry Economics and head of Vogel Capital Management, a New York venture capital firm. "Most of these things have seen the maximum rate of price increase already, and we are headed for a leveling off if not an actual decline."

Kurt Hunzeker, contributing editor of Team Marketing Report, sees the same trend in sports, where basketball and hockey ticket prices have declined in 2001-02 relative to inflation as attendance growth has stalled.

"When people stop showing up, that's going to be your number one indicator," Hunzeker said. "You're already seeing some teams reduce ticket prices."

Various pressures long have held down prices in the video rental market. In fact, the price of a rental actually has gone down over time relative to inflation, even as another home entertainment option — cable television — has risen steadily.

"The price of buying a video or DVD has been dropping dramatically; so as the price closes between actually buying the videotape and renting it," it limits rental price increases, Baine said. "If we hadn't had DVDs, it's almost certain that the rental market would be flat right now."