Cineplex says it will make online purchase fee more obvious following penalty
Company appealing penalty it received in September for alleged deceptive marketing
Cineplex Inc. has announced that it will continue to charge a fee for some online ticket purchases, though it will modify the way the fee is communicated to moviegoers. This decision follows a record $38.9-million penalty imposed on the company by Canada's Competition Tribunal in September, related to accusations that its online booking fees were presented in a misleading manner.
Cineplex's CEO, Ellis Jacob, explained that the concern was not about the fee itself but about how it was displayed on the website. "They were not really questioning the absolute fee. What they were questioning is how it was on the website," Jacob said. "It was all about the presentation, and they've asked us to make some modifications, which we are co-operating with them [on] and moving forward."
Jacob expects the changes to be completed by early next year. The new presentation will make it clearer to customers that Cineplex has been charging a $1.50 online booking fee since June 2022 for those who are not enrolled in the CineClub subscription or Scene Plus loyalty programs. Customers who are enrolled in these programs either have the fee waived or reduced to $1.
The Competition Bureau, which brought the case against Cineplex, argues that customers were not given the full price of a movie ticket upfront when booking online, which they believe misled consumers. However, Cineplex disagrees, stating that the charges are disclosed promptly, and moviegoers can avoid the fees entirely by purchasing tickets in person.
Despite the penalty, Cineplex announced in October that it is appealing the decision. "We didn't think our presentation was at all deceptive to the consumer," Jacob stated, adding that many customers expressed surprise that the issue had even been raised. The Federal Court of Appeal has yet to announce when the appeal will be heard, but Jacob remains confident that the company will prevail.
In its third-quarter earnings report, Cineplex recorded a loss of $24.7 million, compared to a profit of $29.7 million in the same quarter the previous year. The drop was attributed to tough comparisons with a record-setting quarter last year, largely driven by the success of Barbie and Oppenheimer. Despite a strong release of Deadpool & Wolverine, box office attendance for the quarter fell to 13.3 million from nearly 15.7 million the previous year.
However, there were some positive signs. Cineplex saw an increase in box office revenue per patron, which rose to $13.19 from $12, and concession revenue per patron also climbed to $9.85, up from $8.44. Jacob pointed to higher customer spending as evidence of increased enthusiasm for concession purchases, aided by new features in Cineplex's mobile app that allow customers to order snacks online for pickup at the theater.
Even with warnings of consumer spending pullbacks, Cineplex's ability to maintain customer spending is being attributed to these improved services, particularly with mobile ordering and delivery options for snacks and popcorn.
