Cinema drives up price premium, research suggests
Media channel choice positively affects the way consumers perceive quality and what they consider to be “good value”.
That is according to new research from cinema sales house Digital Cinema Media (DCM), presented at its annual upfronts on Thursday. It found that cinema delivers, on average, a 12% higher “optimal price” of a given brand compared with the all-channel average.
The study, commissioned by DCM and conducted by marketing research agency Everyday People, first created a fake laundry detergent brand (dubbed Tixe) and supplied research subjects with a generic description of the service it offers.
It then asked participants to rank how they perceived the quality of the brand when seeing advertising for it across nine media channels.
The study found that media channel choice can significant improve the “optimal price” consumers are willing to pay for a given product, with cinema the biggest beneficiary.
A statistically significant difference was found for cinema versus all other media, with the exception of TV and video-sharing sites.
In contrast, the study found other media channels, such as OOH and content creators, are less effective at driving price premiums for Tixe.
DCM and Everyday People also tested whether a generic Tixe-branded mobile network brand would have the same effect.
For this brand category, cinema once again supplied a 10% higher-than-average price premium.
Notably, podcasts saw their price premium effect fall substantially for the mobile network brand.
Pricing power becomes especially important during challenging macroeconomic periods, when consumers look to more closely manage their spending.
According to DCM and Everyday People’s research, currently just one in three UK consumers feel they have discretionary income to spend after accounting for essential costs. Furthermore, 88% of survey respondents indicated that they hope to maintain or reduce spending across most categories in 2025.
For brands, defending price premiums may well be an important strategy amid global business uncertainty, sparked by tariff policies in the US and modest economic growth in the UK.
Madison and Wall analyst Brian Wieser has already downwardly revised his US adspend forecast. Meanwhile, S4 Capital CEO Sir Martin Sorrell has warned that tariffs are likely to impact its business results.
“In this time of heightened price scrutiny, price perception is absolutely key to brand success and our research showcases how cinema enhances a brand’s ability to maintain strong pricing power and optimise perceived value,” commented DCM CEO Karen Stacey.
“Cinema stands apart,” she continued. “It’s immersive, fully engaging and captures attention like no other medium, forging a deep connection with viewers.
“Our research bolsters this experience with real data, reinforcing the importance of context and the power of premium video to build long-term brand value.”