Yield management for the cinema industry

Abstract Cinema operators have so far behaved more conservatively in terms of their price management. In the course of the digital transformation, there are many opportunities for price innovations. The implementation of yield management strategies in the cinema industry would have a positive impact on revenue and capacity utilization and can both strengthen the competitive situation of cinemas and contribute to increasing profitability. It is essential to determine what the number or proportion of discounted tickets should be and how many tickets can be sold at the regular price. This can be calculated using the critical fractile method, which assumes that the demand follows the normal distribution in a certain period and the distribution parameters are known. In this paper, the number of tickets to be offered at the regular price is calculated based on the evaluation of statistical data on visitor numbers, occupancy rates and prices of the German cinema industry and a leading German cinema chain.