Episodes
How Movie Theaters Price Popcorn and Survive Streaming
In this episode of Pricing Power, Lucas and Luna unpack the economics behind movie theater concessions — why a large popcorn can cost more than a ticket, how theaters price differently by format and time, and why the model is built on a reluctant monopoly. They walk through the math of a $7 soda versus a $14 ticket, the role of 70/30 revenue splits with studios, and how theaters are adapting with premium formats and dynamic pricing in August 2026. Along the way, they offer a candid aside about…
How Netflix Prices Its Tiers and Keeps the Premium
Netflix has quietly restructured how it prices streaming — not just by raising the monthly bill, but by reshaping its tiers, its ad-supported plan, and its password-sharing rules. In this episode, Lucas and Luna unpack the strategy behind the 2025 price hikes and the 2026 crackdown on shared accounts. They break down the numbers: how the standard plan crept past 20 dollars a month in the U.S., why the ad tier is now the cheapest entry point, and how Netflix uses price discrimination to capture…
How Pharmaceutical Companies Price Drugs at Launch
In this episode of Pricing Power, Lucas and Luna examine how pharmaceutical companies set launch prices for new drugs, using the recent pricing of a gene therapy for sickle cell disease as a case study. They break down the role of R&D costs, clinical trial design, patient population size, and the interplay with insurers and pharmacy benefit managers. The hosts discuss the concept of value-based pricing, where prices are tied to outcomes like reduced hospitalizations, and contrast it with the…
How Wawa Prices the Hoagie and Keeps a Cult Following
Wawa's hoagie is a cult staple across the Mid-Atlantic, but the real story is how the chain prices it. In this episode, Lucas and Luna dig into Wawa's 2018 decision to test market-based pricing on hoagies, the customer backlash that forced a rollback, and the psychology behind the chain's commitment to the everyday low price. They break down how Wawa balances labor costs, foot traffic, and a fiercely loyal base to keep the hoagie a value icon — and what that teaches any business about the risk…
How Costco Prices the Hot Dog and Keeps It at One Fifty
In this episode of Pricing Power, Lucas and Luna explore the economics behind Costco's legendary $1.50 hot dog and soda combo, a price that has held steady for over four decades. They break down how Costco uses the hot dog as a loss leader, the role of the company's famous cap on food court margins, and the supply chain decisions that make the price possible despite inflation. They also dissect the broader pricing philosophy at Costco: why the membership fee is the real profit engine, how the…
How Gyms Price Memberships and Profit from No-Shows
Why does your gym charge monthly, even if you never show up? In this episode of Pricing Power, Lucas and Luna break down the economics of fitness club memberships, from the sunk-cost psychology of annual contracts to the surprising revenue from absentee members. They look at how big-box gyms like Planet Fitness use low prices and high volume, while boutique studios lean on class-pack expiration dates and dynamic surge pricing. You'll learn what utilization rates really mean for a gym's bottom…
How Airlines Price the Same Seat Differently
Why does the passenger next to you on the same flight pay a different fare? In this episode of Pricing Power, Lucas and Luna unpack the economics of airline revenue management — how carriers like Delta and United use demand forecasting, booking curves, and fare classes to sell identical seats at wildly different prices. They break down the role of algorithms, the myth of 'dynamic pricing,' and why last-minute tickets cost a fortune. You'll learn what a 'fare class' really means, how airlines…
How Tesla Priced the Cybertruck Into a Cult Following
In episode 156 of Pricing Power, Lucas and Luna unpack the pricing strategy behind Tesla's Cybertruck — a vehicle that broke every convention of automotive pricing. From the headline-grabbing $39,900 reveal in 2019 to the reality of a $60,990 base price by 2024, they explore how Tesla used a radical design and a shock-and-awe launch to generate free marketing, build a waitlist of over a million reservations, and create a brand halo that boosted demand for its other models. The hosts drill into…
How Apple Priced the iPhone and Kept the Premium
In this episode of Pricing Power, Lucas and Luna dig into the pricing strategy behind the iPhone — how Apple has held a premium price for nearly two decades while competitors undercut on specs. They walk through the original $499 launch price, the psychology of the base model as a loss leader for storage upgrades, and how the App Store ecosystem locks in customers beyond the hardware. They also look at the recent shift toward services revenue and what it means for the future of iPhone pricing.…
How McDonald's Prices the Dollar Menu
McDonald's built one of the most studied value menus in fast food, yet the dollar menu has been a moving target for decades. In this episode, Lucas and Luna dig into the economics behind the McPick 2, the $1 $2 $3 menu, and the new McDonald's value platform launched in early 2026. They unpick the strategic tug-of-war between franchisees and headquarters, the psychology of a price ending in 99 cents, and why the chain keeps tinkering with the very menu that defines its value image. If you've…
How Starbucks Prices the Latte Premium
Starbucks charges four to five dollars for a latte that costs pennies to make. In this episode, Lucas and Luna unpack the pricing machinery behind that premium: real estate siting, store ambience, the third-place promise, and the psychology of customization. They trace how Starbucks uses its app to personalize discounts and nudge spending, and why its loyalty program quietly shapes what you pay. They also weigh the risks of raising prices too far, especially as more customers balk at the…
How EpiPen Priced a Life-Saving Drug and Sparked Outrage
In this episode of Pricing Power, Lucas and Luna dissect the EpiPen pricing saga: how Mylan took a decades-old auto-injector, raised its price from $57 to $609 in under a decade, and turned a medical necessity into a national symbol of price gouging. They explore the business logic behind the increases—patent stacking, rebate deals, and a captive market—and why the public outcry forced Mylan to react. The conversation also touches on the generic competition that eventually arrived, and what the…
How Grocery Stores Price Essentials to Win Your Basket
Grocery pricing is a game of margins thinner than a deli slice. In this episode, Lucas and Luna break down how supermarkets use loss leaders, psychological price points, and strategic placement to shape what ends up in your cart. They focus on the classic example of the $1.99 gallon of milk — why a store might sell it at a loss, how it pulls you in, and what the store makes back on the cereal and snacks you grab along the way. They also look at the rise of private-label brands and how stores…
How Luxury Hotels Price the Same Room Differently
In this milestone 150th episode of Pricing Power, Lucas and Luna dig into the quiet, data-driven world of hotel revenue management — how the same room at the same hotel can sell for two very different prices on the same night. They trace the shift from the old 'rack rate' to real-time, demand-based pricing, using the example of a typical Marriott or Hilton property. You'll learn about the role of the revenue manager, the 'competitive set' that anchors every pricing decision, and how opaque…
How Spotify Priced the Music Industry Into Submission
In this episode of Pricing Power, Lucas and Luna unpack Spotify's pricing strategy, from its free tier to the recent price hikes and the new audiobook bundles. They explore how Spotify's two-sided marketplace works, why listeners keep paying despite rising costs, and what the economics of streaming mean for artists and labels. With specific numbers on royalty payouts and subscriber counts, they make the case that Spotify's real product is not music but convenience. Along the way, they take a…
How Gillette Priced the Razor and Lost the Blade
In this episode of Pricing Power, Lucas and Luna unpack the century-old Gillette model—selling cheap handles to lock in customers on expensive blades—and why that playbook is now cracking. They trace the strategy from King C. Gillette's 1903 launch to the rise of subscription services like Dollar Shave Club and Harry's, which flipped the script with low-cost blades and transparent pricing. The conversation digs into the economics of the razor-and-blade model, showing how Gillette's dominant…
How Porsche Prices the 911 and Holds Its Value
Porsche's 911 is a masterclass in pricing discipline. In this episode, Lucas and Luna break down how the German automaker avoids the discount trap, uses options to boost margins, keeps residual values high, and manages a product lineup that spans from track-ready GT cars to the practical Macan. Learn how Porsche's scarcity strategy and direct-to-consumer moves are reshaping dealer pricing, and why the 911's near-perfect price ladder keeps demand high even in a cooling market. If you're in…
How Leica Defied Digital Disruption
In this episode of Pricing Power, Lucas and Luna unpack how Leica, a nearly 120-year-old German camera maker, survived the digital revolution that wiped out film giants like Kodak. They trace Leica's strategy: instead of chasing mass-market digital cameras, the company doubled down on premium pricing, scarcity, and a cult-like following. Lucas explains how Leica's M-series, with its manual focus and rangefinder, became a luxury icon, selling for thousands more than comparable mirrorless…
How Dollar Stores Price Everything at One Twenty Five
In July 2026, Dollar Tree's $1.25 price point is facing its biggest test in decades. Lucas and Luna dig into the economics of dollar store pricing — how a fixed price model drives volume, margin, and customer loyalty, and why the industry is finally breaking its own rules. With insights from Dollar Tree's 2021 price hike and Family Dollar's multi-tier strategy, they explore whether dollar stores can raise prices without losing their core shoppers. Plus, a look at what happens when inflation…
How De Beers Invented Diamond Pricing
In this episode of Pricing Power Podcast, Lucas and Luna unpack the century-old pricing strategy that made a diamond the universal symbol of commitment. Starting with the discovery of huge diamond deposits in South Africa, they trace how De Beers consolidated control over global supply, created artificial scarcity, and commissioned the 'A Diamond Is Forever' campaign to lock in consumer demand — all while holding wholesale prices remarkably stable for decades. They discuss the famous '10…
How Video Game Publishers Price Their Games Beyond the Sticker
In 2020, the standard price for a new console game jumped from $60 to $70. But that's just the entry point. This episode unpacks how publishers like Take-Two, Activision, and Electronic Arts use tiered editions, microtransactions, battle passes, and live-service models to multiply revenue on a single title. We look at the psychology behind a $70 base game with a $100 'deluxe' version, the economics of free-to-play giants like Fortnite, and why subscription services like Xbox Game Pass are…
How Rolex Prices Scarcity and Brand Prestige
In this episode of Pricing Power, Lucas and Luna explore how Rolex masterfully prices its watches to maintain scarcity, brand prestige, and incredible resale value. Using the Rolex Daytona as a case study, they break down how the company deliberately limits supply, controls distribution through authorized dealers, and consistently raises prices without losing demand. They discuss why a watch that retails for $14,000 can trade for $30,000 on the secondary market, and how Rolex's strategy creates…
How Movie Theaters Price the Cinema Experience
Episode 141 of Pricing Power dives into the tricky economics of movie theaters. Lucas explains how AMC's 'Sightline' seat-pricing experiment turned into a PR disaster, while theaters quietly shift to subscription models like AMC Stubs A-List and Regal Unlimited. Luna questions whether dynamic pricing can ever work for a night out. Along the way, they break down the classic low-margin ticket / high-margin popcorn strategy, why Tuesday is cheap night, and how studios' 50% cut forces exhibitors to…
How Netflix Tiers Its Streaming Pricing to Maximize Subscribers
In this episode of Pricing Power, Lucas and Luna unpack Netflix's streaming tier strategy—how the company balances ad-supported, standard, and premium plans to cater to different willingness-to-pay segments without cannibalizing revenue. They discuss the password-sharing crackdown's impact, global price discrimination (like the mobile-only plan in India), and the behavioral economics behind tier design. A concrete example: the ad tier launched in 2022 now accounts for roughly 30% of new…
How Ticketmaster Uses Dynamic Pricing to Maximize Concert Revenue
In this episode of Pricing Power, Lucas and Luna break down Ticketmaster's controversial dynamic pricing model. Using the Taylor Swift Eras Tour as a landmark case, they explain how Platinum pricing works, why fans felt outraged, and how Ticketmaster's near-monopoly through Live Nation gives it the power to set prices like an airline selling seats. They also touch on the antitrust lawsuit filed by the DOJ and what it means for the future of concert ticket pricing. If you've ever wondered why…
How the Decoy Effect Steers Your Wallet
This episode unpacks the decoy effect—a pricing tactic that nudges you toward higher-margin options without you realizing it. Lucas and Luna start with The Economist's famous subscription experiment: when a $125 print-only option was added alongside a $59 online-only deal and a $125 print-plus-online bundle, sales of the bundle jumped dramatically. They explore why the decoy works, citing other examples like movie theater popcorn sizes, Apple's iCloud storage tiers, and Spotify's premium plans.…
How Sony Prices the PlayStation for Ecosystem Lock-In
In this episode of Pricing Power Podcast, Lucas and Luna dive into Sony's PlayStation pricing strategy. They explore how Sony sells the PS5 hardware at a loss, relying on game royalties and subscriptions like PlayStation Plus to turn a profit. The discussion covers the razor-and-blades model adapted for digital ecosystems, the clever segmentation between digital-only and disc versions, and how Sony navigated inflationary pressure without immediately raising console prices. They also contrast…
How Airlines Price the Same Seat Differently
Ever wondered why the person next to you on a flight paid half what you did? In this episode, Lucas and Luna dive into the science of airline yield management. They trace its origins back to American Airlines and the Sabre system in the 1980s, explain how fare classes and capacity controls create hundreds of price points on a single flight, and reveal the algorithm that reprices seats every 10 minutes. Along the way, they unpack why dynamic pricing works so well for airlines and how travellers…
How Costco Prices for Loyalty and Low Margins
In this episode of Pricing Power, Lucas and Luna dive into Costco's famously disciplined pricing strategy. They unpack the 14 percent markup cap on branded items, the 15 percent limit on Kirkland Signature, and the legendary $1.50 hot dog combo that hasn't changed price in 40 years. They explore how membership fees drive profits, why Costco treats suppliers differently, and what other retailers can learn from a model that prioritizes loyalty over margin. A concrete look at one of retail's most…
How Tesla's Price Cuts Win the EV Market
In January 2023, Tesla slashed prices on the Model 3 and Model Y by up to 20 percent, igniting a price war that reshaped the electric vehicle industry. This episode examines the strategy behind the cuts: the trade-off between volume and margin, the impact on operating profits (which fell from 16 percent to below 10 percent), and how competitors like Ford, Rivian, and BYD responded. We also look at where Tesla's pricing stands in mid-2026, with margins restored to around 12 percent thanks to…
How Wendy’s Tried Surge Pricing Then Backtracked
In early 2024, Wendy’s mentioned 'dynamic pricing' on an earnings call, and the internet lost it. Customers imagined paying more for a Frosty at lunch rush, and within days the company had to publicly promise it would never raise prices during busy times. But here’s the twist: Wendy’s was actually testing digital menu boards that could shift prices down, not up — a discount tool for slow hours. Lucas and Luna unpack what really happened, why the backlash was so fierce, and what the episode…
How Starbucks Prices the Coffee Experience
In this episode of Pricing Power, Lucas and Luna unpack how Starbucks sets prices for its coffee — from the $2.75 tall drip to the $7.50 venti Frappuccino. They walk through the three pillars of Starbucks' pricing strategy: the real-estate premium for prime corners, the customization surcharge that turns a latte into a $6 drink, and the loyalty program that masks price increases. Lucas explains how Starbucks uses its mobile order data to test price elasticity in real time, and why the company…
How Airbnb Designed Dynamic Pricing for Hosts
Episode 131 of Pricing Power Podcast explores how Airbnb shifted from a flat-rate recommendation to a dynamic pricing algorithm that changed how hosts set nightly rates. Lucas and Luna walk through the 2015 introduction of Smart Pricing, the tension between host autonomy and platform optimization, and the economics of price elasticity in short-term rentals. They discuss how Airbnb uses data on demand, seasonality, and local events to suggest prices, and why some hosts opt out despite the…
How Zara Prices Speed Over Fashion
In this episode, Lucas and Luna break down Zara's pricing strategy, which relies not on seasonal trends but on a relentless two-week supply chain. They explore how Inditex keeps prices low by avoiding markdowns, using regional price discrimination, and treating store proximity to factories as a competitive moat. The hosts also discuss the trade-offs: Zara's higher per-unit logistics costs against full-price sell-through rates that outperform rivals like H&M. Listeners will learn why Zara can…
How ALDI Prices for Efficiency and Surprise
Episode 129 of Pricing Power Podcast explores ALDI's unique approach to pricing—how the German discounter uses a lean product mix, private-label dominance, and the 'treasure hunt' model to undercut competitors while keeping customers engaged. Lucas and Luna break down the economics behind ALDI's quarter-based product rotation, its 90 percent private-label strategy, and how it maintains margins on a $3.99 bottle of wine. They also tie the discussion to listener support via…
How EpiPen Prices Sparked a Pricing Revolt
In 2016, Mylan faced a national firestorm over the EpiPen's price, which had risen from about $100 in 2007 to $608 by 2016. This episode examines why the company raised prices so aggressively, how a single product's pricing became a political issue, and what happened next—including a $465 million settlement and the rise of authorized generics. We also look at the broader dynamics of pricing life-saving drugs and how patient out-of-pocket costs can create a blind spot for pharma companies. Lucas…
How SpaceX Disrupted the Launch Pricing Model
In this episode of Pricing Power Podcast, Lucas and Luna examine how SpaceX fundamentally rewrote the economics of space launch. They break down the sticker price of a Falcon 9 — about $67 million for a commercial launch in 2026 — and trace how Elon Musk's company drove costs down from thousands of dollars per kilogram to under $2,000. They explore reusability as a pricing moat, the competitive response from legacy players like Arianespace and United Launch Alliance, and what SpaceX's pricing…
How the Makers of Ozempic and Wegovy Price Their Miracle Drugs
Episode 126 dives into the pricing strategy behind Novo Nordisk's GLP-1 drugs Ozempic and Wegovy. How does a company set the price for a drug that patients may take for decades? Lucas and Luna explore the high list price, the net price after rebates to pharmacy benefit managers, and the tension between access and profit. They break down the math: Wegovy costs about $1,350 per month in the US but far less in Europe, and why Novo Nordisk can get away with it—patent protection, soaring demand, and…
How Hertz Priced the EV Bet Then Reversed It
In early 2024, Hertz announced it was selling off roughly 20,000 electric vehicles from its rental fleet — about a third of its EV holdings — and reinvesting the proceeds into gasoline cars. The decision was a stunning reversal for a company that had, in 2021, placed one of the largest EV orders in history: 100,000 Teslas by the end of 2022, plus a deal with Polestar for another 65,000 vehicles. What went wrong? This episode of Pricing Power drills into the specific pricing miscalculations that…
How Adobe Priced the Creative Cloud Subscription
In this episode of Pricing Power Podcast, Lucas and Luna break down Adobe's pricing strategy for Creative Cloud. They examine how Adobe shifted from selling $2,000 perpetual licenses to a $52.99 per month subscription model, generating over $18 billion in annual revenue by 2025. Lucas explains the psychology behind the 'sunk cost trap' of the seven-day free trial and how Adobe uses tiered pricing (Single App, All Apps, Student, Teams, Enterprise) to capture value across customer segments. Luna…
How Porsche Prices the 911 Across Generations
In this episode, Lucas and Luna explore Porsche's pricing strategy for the 911 across model generations. They break down how Porsche uses incremental improvements, option packages, and heritage branding to command premium prices. Specific focus on the 992 generation launched in 2019, where the base Carrera started at $97,400 and option packages can push a build past $200,000. Lucas explains Porsche's 'option theater' — how buyers perceive customization as value creation — and how the 911's…
How Nintendo Prices Scarcity for Hardware Margins
Nintendo has never competed on specs. While Sony and Microsoft sell consoles at a loss, Nintendo consistently turns a profit on hardware from day one. This episode unpacks how the company uses deliberate scarcity, component selection, and lifecycle pricing to maintain margins on products like the Switch and its successor. We look at the economics behind the 'Nintendo tax' — why first-party games rarely drop in price — and how the company's pricing strategy creates a virtuous cycle between…
How LVMH Prices Luxury Across the Portfolio
Lucas and Luna explore how LVMH—the world's largest luxury conglomerate—prices products across its 75 brands, from Louis Vuitton to Sephora. They break down the specific strategy behind the 2023 price increases: roughly eight percent across the portfolio, with some handbag lines up twenty-five percent. Lucas explains how LVMH uses brand-tier differentiation, scarcity signals, and currency hedging to maintain margin without alienating core customers. Luna pushes back on whether these moves risk…
How Ferrari Prices Exclusivity for Maximum Margin
Lucas and Luna examine Ferrari's pricing strategy, which hinges on scarcity and brand heritage rather than production volume. The episode zooms in on Ferrari's 2023 decision to limit production to fewer than 14,000 cars despite surging demand, and how that restraint has driven average selling prices above €350,000 and gross margins over 50%. The hosts discuss how Ferrari uses invitation-only purchasing, long waitlists, and limited-edition models like the SF90 Stradale to maintain pricing power.…
How Netflix Uses Price Discrimination Across Countries
Netflix charges very different prices in different countries — a standard plan costs about $15.50 in the US but roughly $4 in Turkey and $7 in Brazil. This isn't random local pricing; it's a deliberate price discrimination strategy based on willingness to pay. In this episode, Lucas and Luna walk through Netflix's country-tier pricing structure, the data signals that inform those price points (GDP per capita, streaming competition, local content costs), and what happens when subscribers try to…
How Sweetgreen Prices Salad for Profit and Scale
Episode 118 of Pricing Power Podcast examines how Sweetgreen, the fast-casual salad chain, prices its bowls to balance premium ingredients, operational complexity, and customer willingness to pay. Lucas and Luna break down the chain's tiered pricing strategy, the economics behind a $15 salad, and how Sweetgreen uses menu engineering and limited-time offers to drive margin without alienating its core health-conscious customer. They discuss the role of local ingredient sourcing in justifying…
How Spotify Prices the Subscription for Two Sided Markets
Episode 117 of Pricing Power dives into Spotify's dual-pricing strategy: how it balances free ad-supported tiers against premium subscriptions while keeping artists, labels, and listeners in the same ecosystem. Lucas breaks down the economics of the two-sided market—why Spotify pays roughly $0.003 to $0.005 per stream, the role of the 'bundled subscription' loophole in publisher royalties, and how the recent price hike to $11.99 per month for individual plans shifts the margin calculus. Luna…
How Disney Prices the Theme Park for Maximum Magic
In episode 116 of Pricing Power Podcast, Lucas and Luna break down how Disney parks charge a premium even as attendance fluctuates. With the opening of the Zootopia-themed land at Shanghai Disneyland in December 2023 and the ongoing expansion of other parks in 2026, Disney's pricing strategy has become more dynamic than ever. The hosts explore how Disney uses tiered single-day tickets, Genie+ line-skipping passes, and Lightning Lane Premier Access to segment guests by willingness to pay. They…
How Netflix Prices the Subscription for Everyone
In Episode 115 of Pricing Power, Lucas and Luna break down Netflix's pricing strategy and how it has evolved from a single DVD plan to a multi-tier global subscription model. They focus on the 2022 launch of the $6.99 ad-supported tier in the US and the subsequent price increases for ad-free plans. The hosts explain why Netflix chose to introduce a cheaper, ad-funded option at that specific moment, how it balanced retaining price-sensitive subscribers against maximizing revenue from heavy…
How SiriusXM Prices the Bundle for Retention
In this episode of Pricing Power, Lucas and Luna drill into SiriusXM's unique pricing model that mixes a free ad-supported tier, paid subscriptions, and relentless retention tactics. They break down how the company uses teaser rates, multi-year lock-ins, and bundled car subscriptions to keep churn low despite cord-cutting pressure. Specific numbers include the jump from $1 trial to $22 monthly, and how SiriusXM's revenue per subscriber compares to Spotify. The discussion also touches on the…
Showing the latest 50 episodes. The full archive of 163 is on Apple Podcasts, Spotify and every major podcast app — or via the RSS feed above.