Weird Monopoly: Cineplex and Canadian Movie Theaters
If you want to either show or see a recently released movie in Canada, it’s fairly likely that you have to go to Cineplex.
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Last week, Canadian movie theater giant Cineplex pissed off its customers by imposing a $1.50 booking fee for tickets purchased online and on its mobile app. The ostensible excuse was that it can ‘invest in digital infrastructure,’ but no one was buying it. In a functional market, consumers could just go to a different theater. But Cineplex controls the Canadian movie theater industry, with roughly 75% market share.
How does Cineplex maintain its power? The monopoly story here is pretty simple. Like the movie theater chains in the U.S. prior to the 1948 Paramount Consent decree, Cineplex wields its power by denying rival small theaters access to movies that people might wish to see. If it’s playing in a Cineplex theater, then it’s not playing in a small theater. This thread from an art house movie theater explains the conduct.
My guess is that the booking fee is designed to cheat the studios, since there’s usually a revenue split of the ticket price between studios and theaters. A booking fee is a way of raising prices without sharing.
Before Covid, the independents were trying to get the Canadian competition authority to go after Cineplex, but the pandemic shut everyone down and made the problem moot, at least for a time. Now, with both inflation and the return of in-person movie screenings, the controversy is returning.
At any rate, there is a bit of competition with Landmark in some areas, but if you want to either show or see a recently released movie in Canada, it’s fairly likely that you have to go to Cineplex.