This blog is usually a place for news and views about film and art, so I hope you’ll excuse me straying into the comparatively dry topic of cinema economics!
I felt I should write a piece that explains our considerations in setting cinema ticket prices and how the ticket income is divided between Phoenix and film distributors. Sometimes we get enquiries from people interested in this aspect of the world of cinema.
Firstly, I’d like to say that Phoenix is a charity and all its resources are invested in its cultural programme for the benefit of Leicester and the surrounding area – unlike those in the commercial sector whose ultimate goal is to return shareholder value.
Phoenix has achieved a great deal, and changed much since it was set up as a charity in 1989. Throughout, it has continued an ethos of cultural innovation and support for emerging artists, whilst firmly anchoring itself in the affections of the local community.
We believe independent cinema and creative arts are integral to confident and diverse cities such as Leicester.
Our vision is to “enrich people’s lives through film and art”- to provide a window on the world which offers diverse cultural perspectives and representations of peoples, places, narratives and themes. We aim to produce a programme that is locally and culturally relevant – often working with a wide range of artists and partner organisations.
Thanks to rapidly increasing numbers of appreciative customers and supporters, Phoenix has established itself as a major centre for independent cinema and creative digital media in Leicester’s Cultural Quarter. Over 200,000 people a year now visit our main venue and cinema attendances have reached 105,000.
Clearly we are getting many things right!
For a number of years, however, cultural organisations like Phoenix have been under pressure to reduce their reliance on public funding and become more ‘entrepreneurial’.
We’ve responded well to this challenge by increasing to around 60% – as a percentage of all our income – the amount we generate from ticket sales, food and drink in our café, and room hire amongst other things.
The watchword here is ‘sustainability’ – we have a responsibility to ensure Phoenix’s future is secure in a changing world. This means we must continue to become more self-sufficient but in doing so not lose sight of our charitable purpose and what makes us different.
And of course, all the while, our costs continue to rise. Technology moves on and we need to keep up – last year alone we spend £60,000 on a new digital projector and sound system in Screen 1. As we get busier, we are investing to ensure the level of service and experience you get at Phoenix keeps you watching films in the cinema.
We also have ambitious plans to invest in our venue. In the next few years, we want to expand our programme, reach out to more people in the city and look at how we might develop our venue to offer greater choice.
Setting ticket prices
If Phoenix is to thrive – not just survive – we need to make certain we’re providing the best programme and experience and charging a fair price for it.
Cinema ticket income has a critical role to play. At least once a year we review our prices after conducting detailed research to make sure we get the balance right: generating a fair amount towards our costs, whilst making sure we remain competitive.
We also consider very carefully accessibility and affordability when looking at different ticket types, concessions and discount offers.
As an example, in this year’s price review we’ve increased standard ticket prices by an average of 36p, with variations across peak and off-peak, and full and concession pricing. At the same time we’ve also adjusted our pricing structure to try and attract more young adults – raising the age at which young people can get cheaper tickets from ‘under 18’ to ‘under 25’.
Our MyPhoenix card scheme is also proving to be a very popular way for regular customers to save money on tickets, rewarding those who choose to come more often.
Where your money goes
People are often surprised when I tell them Phoenix receives less than half the value of every cinema ticket we sell. The first 20% is reserved for VAT and, after that deduction, film distributors take a fixed margin that varies between 35% and 55% of the remaining value.
At the end of the day, few people welcome price rises. I hope, however, that I have given you a feel for the challenges facing our organisation, but perhaps more importantly the opportunity we all share to make Phoenix even better for future generations. Making sure our ticket prices are keen but fair is vital.
I would encourage you to take a look at our Annual Review which contains more information about our charitable work and how we are funded. Look out for copies in the foyer or it is available to download on our About Phoenix page
And if you are a regular customer, I recommend you check-out our MyPhoenix scheme which has several options that can save you money whilst contributing to our charitable work.
Thank you for your continued support.
Chief Executive Officer, Phoenix