Cineplex has already made nearly $40 million from its online booking fees.
The data was revealed as part of the Canadian theatre chain’s ongoing case before the Competition Tribunal over the fees, which Canada’s Competition Minister has argued are deceptive. Per the court case, Cineplex made over $11.6 million in the six months after the fee was quietly introduced in June 2022 and another $27.3 million throughout 2023.
Since June 2022, Cineplex customers must pay $1.50 per ticket purchased online, with that fee being reduced to $1 for Scene+ loyalty program members (a free program) or waived entirely for those who buy tickets in theatres or who are subscribed to the $9.99/month CineClub service.
Last May, Canada’s Competition Bureau sued Cineplex over the fees, with Competition Commissioner Matthew Boswell alleging that they’re an example of the company engaging in a “misleading” practice called “price dripping.” This refers to when customers are steered towards making a purchase without receiving clear disclosure of the full cost. Boswell adds that in 2021, roughly two-thirds of Cineplex tickets were already being sold online, and presumably, that number has only increased over time.
For its part, Cineplex has argued that “all information is clearly shown on the very first page of the Website and App when a customer first sees prices, including ticket prices and movie availability.”
However, Boswell argued that this doesn’t account for the fact that customers still have to scroll down “below the fold” to see a full price breakdown in a separate section from the actual subtotal. What’s more, no page on Cineplex’s website or app explicitly breaks down ticket prices.
While Cineplex admits there is no such page, it claims there “are many options that impact the overall cost of attending the theatre to see a movie,” which therefore requires an “interactive” approach from the customer to learn more at checkout. Boswell, however, says this only further obfuscates the entire ticket-buying process for customers. He even claims that Cineplex quietly removed signs that the theatre chain did not have service fees to “not arouse suspicion amongst staff in theatres that the policy might be changing.”
On top of that, Boswell argued that Cineplex’s use of a countdown timer at each stage of the purchase process only “increases pressure on consumers to focus on completing their purchase, rather than considering transaction details and thinking things through.” He says these tactics lead customers to “tend to underestimate the total price of purchase” because they “pay less attention to additional fees than to base price information.”
Ultimately, he argues, “the use of these pricing practices has been shown to increase consumer demand — in this case Cineplex has increased demand for its tickets than the demand that would occur if it initially displayed a truthful price of the ticket for a consumer.”
Boswell is calling on the tribunal to order Cineplex to cease drip pricing, remove the countdown timer and pay a financial penalty equal to what it’s gained from these practices.
Cineplex, meanwhile, calls these claims meritless and is asking the case to be thrown out with costs awarded to Cineplex. The company told the Canadian Press that it wouldn’t comment further on the case as it’s still being heard by the tribunal.
However, the company claimed in 2022 that the fee was necessary to “further invest and evolve our digital infrastructure.” It also maintained that online booking fees “have been in place for many years with our exhibition counterparts globally” and are common among ticketed events for sports, concerts and more.
On top of that, the company has argued that customers have options to reduce or waive the fee through the aforementioned membership programs and in-theatre purchasing. Of course, one could argue that the fees are Cineplex effectively strongarming Canadians, given that it’s the country’s largest theatre chain with a 75 percent market share. To that point, many independent theatres have even expressed concerns over Cineplex’s ostensible monopoly on the Canadian theatre business in Canada, especially since it’s often the only company permitted to screen the most popular movies upon release.
It remains to be seen what else may come out of this case. However, Cineplex has also been hit with two class-action lawsuits over the online booking fees which have yet to be resolved.
Via: The Canadian Press
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