When single tickets to the Toronto International Film Festival went on sale to the public Sunday morning, Jaimie Marshall logged on with high hopes of snagging a seat to a few of the buzzier titles – and then wound up crestfallen when she discovered TIFF's decision this year to slap a premium charge of between $2 and $7 on some of the more popular movies.
The move meant that a ticket to director Kenneth Lonergan's critically acclaimed drama Manchester by the Sea, which had a face value of $49, came with a surcharge of $7. When she saw an additional $2 online transaction charge, she decided she'd hit the tipping point.
"I just felt like no movie is worth $58. It's already a stretch at $49," said Marshall, a Whitby, Ont. paralegal. She made the same decision to sit out American Pastoral, as well as the animated comedy Sing, to which she had hoped to take her 12-year-old daughter. Though she has been a TIFF member for five or six years, paying $450 for the privilege of early access to some TIFF tickets, she said "this has seriously made me question whether I will continue."
"I think the surcharges are ridiculous, period, but at a minimum I think members should be exempt from them," she added.
So-called "dynamic" or "demand-based" pricing, in which the cost of a good or service fluctuates with demand, has been a regular feature of the transit industry for decades: It's the engine behind the wild variability of airline seats, and, more recently, a frequent bone of contention among Uber passengers who blanch at what the company calls "surge pricing."
But in recent years, the practice has spread to other industries in which the supply of something – say, a ticket to a hot Broadway show on a Saturday night – is fixed, prompting demand in secondary markets (a.k.a. scalpers) to skyrocket. Live-performance companies, professional sports organizations and movie cinemas – aided by online ticket-sales hubs and the increasing availability of algorithms that can adjust pricing on the fly – are now using the approach to extract as much revenue as possible for themselves.
In a statement supplied to The Globe and Mail, TIFF suggested it was merely embracing current market trends. "Demand-based pricing is used by many arts and culture organizations and not-for-profit institutions as well as sporting events and concerts," said TIFF spokesperson Tanya Warren. "The starting price of a regular festival screening ticket – $25 – remains status quo to last year, and the bulk of the tickets for each screening will still be sold at this rate. Prices will increase with demand, only when the screening is near capacity."
The approach is spreading: More than a dozen theatre companies in Canada now price their tickets in part based on variable demand. This year, the Toronto Blue Jays adopted dynamic pricing on their single tickets, charging more for games when the baseball team hosts popular contenders such as the New York Yankees.
Cineplex Entertainment, the country's largest cinema chain, does not employ the approach: Unlike live performances, or film festivals where screenings are limited, exhibitors can quickly offer more screenings of popular movies at their multiplexes. Still, CEO Ellis Jacob told analysts last spring that the company is keeping an eye on dynamic pricing. "We always look at pricing alternatives which provide the best mix of maximizing revenues, providing value to our guests and those that drive attendance," said Pat Marshall, vice-president of communications and investor relations, on Tuesday.
Critics have noted, though, that TIFF is a registered charity funded in part by all three levels of government, and therefore has obligations to make itself accessible to as many people as practicable.
"As a charity we want to ensure we can continue to offer accessible (and often free) programming for a diverse audience of all ages throughout the year (including during the festival)," Jennifer Bell, TIFF's vice-president of marketing, communications, digital media and creative, said in a statement provided to The Globe on Tuesday.
"In addition, we want to maintain and grow the work we do in underserved communities through initiatives such as Reel Comfort, Special Delivery and Pocket Fund. Over the past number of months we had been looking at how other similar types of organizations structured their ticket prices – and dynamic pricing came up as a commonly used business practice. After a lengthy internal discussion we felt that introducing a capped dynamic pricing model for a certain number of festival screenings was, on balance, the appropriate decision to take."