This suggests that moviegoers will again have to reach deeper into their pockets to buy tickets \u2014 a strategy that could backfire on Nu Metro if it loses customers to rival Ster Kinekor, which is sticking with its plan to keep prices low at certain cinemas.<\/p>\n
Johncom\u2019s decision comes after two years of a low-price strategy which appears to have failed to push cinema attendance figures up markedly from the 26-million tickets sold in 2005.<\/p>\n
Yesterday\u2019s decision by the company to abandon the battlefield reflects Johncom\u2019s increasing focus on profits in its various businesses now that its biggest money spinner, its stake in M-Net, is being sold to rival Naspers.<\/p>\n
Speaking at a packed results presentation, Johncom CEO Prakash Desai said there was \u201cno merit in a pricing tug-of-war\u201d which would erode the value of the products.<\/p>\n
\u201cAverage ticket prices have been restored to the prices they were before the price war,\u201d he said.<\/p>\n
Desai also said Johncom had ended its partnership with Edgars, which allowed members of the Edgars Club to buy tickets at Nu Metro cinema s for R16 each.<\/p>\n
\u201cWe decided we could not afford what was on the table,\u201d said Desai.<\/p>\n
In March 2005, when the first skirmishes in price war began, Ster Kinekor slashed its prices by more than half from R37 to R14 at its Junxion cinema s in a bid to attract cinemagoers.<\/p>\n
Nu Metro reluctantly followed suit by cutting prices to R12 a seat.<\/p>\n
One analyst described Johncom\u2019s decision as strange, given that the company said yesterday it would also be establishing \u201cbudget cinema s\u201d, presumably to cater for lower-end consumers with cheaper ticket prices.<\/p>\n
Primedia, which owns Ster Kinekor, has no plans to follow Johncom\u2019s lead.<\/p>\n
Primedia head of content Ferdi Gazendam said Ster Kinekor would not raise prices. \u201cWe recognise the realities of SA, and we want to make cinema affordable and accessible,\u201d he said.<\/p>\n
Gazendam said that the decision to slash prices in its 26 Junxion cinema s had paid dividends, \u201cas that side of our business is growing steadily\u201d.<\/p>\n
Underlining the dip in the higher-priced cinema s, Gazendam said \u201cthere has been a steady decline in attendance figures at our Classic cinema s\u201d. These cater for wealthier customers.<\/p>\n
Primedia figures show that while ticket sales at its Classic cinema s had fallen 15% in the six months to December, sales at the lower price Junction cinema s had grown 16%. Since 2002, the percentage of Ster Kinekor\u2019s black clientele had grown from 5% to nearly 35%.<\/p>\n