The Market In Action

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When I first moved to Fort Wayne almost 14 years ago, there were at least three companies operating first-run movie theaters in town. Over a period of several years, Regal Cinemas eventually acquired all of them.

A couple of funny things happened after that - the prices went up and the theaters started deteriorating. Since Regal had a local monopoly, they had no real incentive to keep prices low or invest anything in the local market.

A couple of years ago, Rave opened an 18-screen theater complex here. No longer did I have to deal with sticky floors, broken seats, and screens the size of a TV set; I could have a reclining seat with a headrest! And TWO cup holders! And tons of leg room with stadium seating so I could actually see the screen. And it was an honest-to-God full-size movie screen! It was like I'd died and gone to heaven, and didn't have to pay any more for the privilege. Sure, it was considerably harder to get to than the closest Regal multiplex, and parking was a bitch, but it was worth it.

Incidentally, Rave is a funny beast - they've got theaters scattered around the Southeast, Midwest, and Texas, but I can't discern any pattern. Maybe they specialize in cracking abused monopoly markets. But I digress.

Over the last couple of years, Rave's been beating Regal like a runaway red-headed circus stepchild chimp - Rave now has about 80% of the local market. As they've been doing that, they slipped in a couple of price increases and hoped we wouldn't notice. I noticed, but I didn't care since they were still light-years ahead of anything Regal offered locally.

Finally, Regal is fighting back. Last summer, they closed one of their local 8-plexes (the one nearest my house, not that I cared - I haven't set foot in a Regal theater since Rave opened) in order to remodel it into a - surprise! - 14-screen stadium-seating multiplex! It had its grand re-opening last Friday, and from all appearances it's quite spiffy. I haven't been there yet, but my son reports that it's 'very cool.' And here endeth today's lesson about the power of the free market.

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This page contains a single entry by Chris published on April 6, 2004 9:48 PM.

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