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Hollywood Gets a Lesson in 'Supply & Demand'

OPINION features excerpts of pieces by columnists from the Op-Ed page and other sections of The New York Times. All columns from the last seven days are available at nytimes.com; Op-Ed pieces (by columnists and outside contributors), plus Editorials and Letters to the Editor, are at nytimes.com/opinion. Please let us know what you think of OPINION at upfront@scholastic.com.

If you go to the movies on a Wednesday, there's no line to buy tickets, and the theater is almost empty. Your ticket costs $8. Go back on the weekend: You stand in a long line, and the only seats are in the third row. It's a hot ticket, yet it costs the same $8. This isn't the way much of the U.S. economy works. It's not how airlines sell seats, the Gap sells shirts, or eBay sells anything. Soon, it won't be the way movies work either: You'll pay more for a ticket on the weekends, you'll be able to reserve a seat for a few extra dollars, and you may have to pay more for a hit than a flop. It's called "variable pricing," and it's coming to a theater near you. The theater industry can no longer ignore the laws of supply and demand: Thanks to competition from DVDs, high-definition TVs, Netflix, and TiVo, the share of income spent on moviegoing has fallen 17 percent in three years. There's no easy fix, but the industry can't afford to leave money on the table any longer.

David Leonhardt [2/15/06]