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A peek into movie theater economics
Arstechnica ^ | 1/5/2006 12:12:40 PM | Ken "Caesar" Fisher

Posted on 01/07/2006 12:04:06 PM PST by Ma3lst0rm

Our undying devotion to simultaneous movie releases has earned us a small share of hate mail over the years, especially from folks in the movie theater business. Our complaining about the crowds, the inconvenience, and most importantly, the cost really gets on their nerves. They make all manner of excuses for what goes on in theaters. The high prices of concessions, we're told, stems from two factors. First, they say, movie theater employees earn more on average than your man at McDonald's, so you shouldn't expect the price to compare with Chez McDo. More importantly, they claim that the movie studios take all of the proceeds from ticket sales, leaving the theaters without a way to make money. The problem with all of this is that it's not true.

(Excerpt) Read more at arstechnica.com ...


TOPICS: Business/Economy; Technical
KEYWORDS: cinema; hollyweird; hollywood; loews; movie; movies; multiplex; rialto; strand; theater; theaters
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To: MplsSteve

"But the margin was incredible, absolutely incredible. He told me "This is how we make a profit. We don't see that much profit off sales of tickets"."


I once heard that McDonald's makes all their profit on the drinks and fries (look at how cheap potatoes are!), and just breaks even on the burgers.


21 posted on 01/07/2006 12:53:46 PM PST by canuck_conservative
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To: Ma3lst0rm
So they get to keep some of the money off a ticket. That doesn't mean that they're committing highway robbery.

Nobody says you have to eat their popcorn or candy. You can aways sneak your own food into the theater.

FWIW, if you sign up with Loews they will give you a free popcorn and drink on your birthday, so you can see what you're missing.

22 posted on 01/07/2006 12:54:10 PM PST by x
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To: ThinkDifferent
Why sit in a theater, even the new ones, and have some rotten wet nose kid kick the back of the seat, talk out loud and when asked to keep quiet and stop kicking the seat, the parent just stares at you like "Are you crazy". Buy the DVD and relax in an easy chair, plenty of pop or beer, and if you happen to fall asleep, run the thing back and as well over half the cost. And if all the family can't see it at the same time, so what.

As for the ads, the newer DVD have some and all have previews. And no jackass tells me to silence the cell phone. Love the hold button. The way of the movie theater is slowly going.
23 posted on 01/07/2006 12:57:38 PM PST by Logical me (Oh, well!!!)
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To: Ma3lst0rm

We go as a family once a year during Christmas vacation. "Toy Story 2," "Finding Nemo," "The Incredibles," and "Chronicles of Narnia" were well worth the $30. But I'm not going if I'm not going to get my money's worth.


24 posted on 01/07/2006 1:04:25 PM PST by Aquinasfan (Isaiah 22:22, Rev 3:7, Mat 16:19)
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To: Logical me

Exactly. Ticket prices rising and experience getting worse, home theaters getting better and cheaper. Not exactly rocket science.


25 posted on 01/07/2006 1:06:01 PM PST by ThinkDifferent (I am a leaf on the wind)
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To: Ma3lst0rm

Maybe the Hollyweird 'they' will read this thread. I don't go to 'the movies'. I do go to artsy adult dinner theater that charges $3 admission and then serves adult beverages and order-in from the deli next door. It's cheap enough that if long haired maggot infested children misbehave then I'll just leave. I don't watch 'TV' but I do read lots of books and frequently watch a DVD. Fuck with DVDs and I'll quit watching them. No skin off my nose.


26 posted on 01/07/2006 1:06:37 PM PST by dhuffman@awod.com (The conspiracy of ignorance masquerades as common sense.)
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To: x
Hi All-

Movie theater operators would make more money from concessions sales if they would increase volume by lowering the absurd prices on food and beverages.

As it is, I refuse to pay $11.00 for a bucket of pre-popped popcorn that they deliver in 60-gallon bags and simply toss into the heated display cases. The multiplex near my home charges $4.00 for each 16-ounce bottle of water.

Needless to say, I cart my own food and drinks in my pockets and just pay for the admission ticket. Does this surprise them? Why on earth would I pay a total of $19.00 for snacks? I enjoy the big-screen experience greatly, otherwise I would just wait for movies to make it to DVD to go on my Netflix queue.

~ Blue Jays ~

27 posted on 01/07/2006 1:06:55 PM PST by Blue Jays (Rock Hard, Ride Free)
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To: Ma3lst0rm

The last theater actually had a good popcorn deal. It was a large popcorn with free refills. Cost like 5$. We ate 2 refills (+the original) and got another to go. And tasted good too- sooooo buttery.


28 posted on 01/07/2006 1:07:03 PM PST by onja ("The government of England is a limited mockery." (France is a complete mockery.)
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To: Ma3lst0rm
Last theatre I went to they were selling chocolate-dipped strawberries.

If they keep offerring interesting stuff like that, I will keep going to the movies.

Only go to matinees anyway which are 50% cheaper.

29 posted on 01/07/2006 1:13:31 PM PST by Siena Dreaming
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To: Ma3lst0rm

My daughter worked for a movie theater while in high school. She did NOT make moe than people (her freinds) at McDonalds. The price for tickets kept going up and now there is a 16 screen complex for sell in Louisville, KY. A 'Showcase' of a failed business plan.

Any takers?

(1 proviso - you cant open it up as a movie theater again)


30 posted on 01/07/2006 1:14:27 PM PST by truemiester (If the U.S. should fail, a veil of darkness will come over the Earth for a thousand years)
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To: M203M4
It is a pity that there are so few drive-in theatres left. Summer nights under the stars, with any of the goodies you brought along to eat. Snuggle up to your honey with a blanket...........

I remeber such a summer night. It was great!.........

.......Until my wife parked right next to us. ;-)

31 posted on 01/07/2006 1:19:29 PM PST by Polybius
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To: saganite
The theaters could add yet another revenue stream if there were a gift shop/kiosk in the multi-plex selling merchandise for current and past movies. The licensing agreements could be built into the contracts to show the movies. Is this a no brainer, or I'm I way off base here?
32 posted on 01/07/2006 1:24:51 PM PST by numberonepal (Don't Even Think About Treading On Me)
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To: saganite

I believe that is the ultimate goal, they want to take as big a chunk of the prosperity of the masses. I agree "enslavement" is too strong of a word except maybe in the cases of banks, insurance, and credit card companies. So many industries don't have any "real alternatives" because the industry members tend to operate in collusion with one another in an attempt to fleece customers. Independent theaters are far and in-between which gives you no choice but the same ticket prices and the same concession prices throughout. Now this isn't slavery but is a Hobson’s choice for consumers. A good example is the rises cost of health care. I get notified every year that due to the rising cost of Health care my premiums are going up, my co-payments are going up yet it seems that I get less and less benefit overall. The company justifies this by saying that this is what all companies are doing and it is in line with national trends. Where is the capitalism and push back telling insurance companies that the prices are unreasonable? There is none only useless Democrats talking about getting rid of what little choice there is for consumers by Nationalizing Health care. Now Healthcare is by far more serious than watching a movie because not watching movies does not affect one's personal wellbeing.
I think what irks me is that I see this trend being pushed in every industry except retail shopping (Wal-Mart) where companies, especially service oriented ones, whine and cry and remain unresponsive to consumers and take huge, dare I say "shameful", profits. I'm not even talking Oil which we pay a pittance for. I just think there is something wrong with a system where all the players collude against the consumer with acts like the DMCA and local monopolies. I think it is time for more consumer activism to force more responsiveness.

Some things I'd like to see:

1. I'd like to see all business entities exempted from taxes.

2. I'd like to see all laws providing special subsidies for businesses repealed.

3. I'd like a Consumer Rights Act ammended to the Constitution guaranteeing the rights of the consumer not to be deceived when purchasing goods and services and making illegal for any entity to ask a citizen to sign exclusive contracts restricting the rights of a citizen's freedom of speech, freedom of volition (to live and travel at will), and ability to work where they wish. All non competition contracts would become unconstitutional and all contracts would become at will.

4. I want to see the FTC empowered to take on the increasingly deceptive marketing practices.

5. Also consumers should be given a guarantee that before anything can be added to their credit reports that they have a right to be notified and have the option to ask for an independent government entity to review each individual case before information can be added. Today the system is guilty until proven innocent and that is the reverse of how a system that plays such a huge role in ones ability to live life and make purchases.

These are but a few of the things that would improve the balance between consumers and businesses. Changing it to more of a partnership than the often oneside situation most are left with today.


33 posted on 01/07/2006 1:25:34 PM PST by Ma3lst0rm (Poverty of soul is not easily remedied.)
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To: numberonepal

I think theaters should offer real rewards programs and a option where people can pay a monthly fee for so many viewings a month for a discount. The whole idea is to get more people into theaters more often. The problem is that ticket prices being what they make such an approach prohibitive because the monthly fee would have to be 50-$60 which is the typical cost of cable.


34 posted on 01/07/2006 1:30:15 PM PST by Ma3lst0rm (Poverty of soul is not easily remedied.)
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To: machogirl

I was kidding. I've worked in movie theaters myself in my younger days. Though not concessions.


35 posted on 01/07/2006 1:32:18 PM PST by durasell (!)
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To: numberonepal

Retailers probably give the movie companies a great deal. The spinoff toys, clothing etc are great for getting parents into stores so from a marketing perspective the retail stores want that stuff and will pay handsomely to get it. The theatres, on the other hand, won't draw any more customers in by displaying movie related merchandise since you're already there to see the movie.


36 posted on 01/07/2006 1:32:45 PM PST by saganite (The poster formerly known as Arkie 2)
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To: Siena Dreaming

I agree and matinees are a good deal. I think they should offer refunds for bad movies myself. lol I keep waiting for a movie company to get sued for deceptive marketing concerning some of the crap they produce and sell. Look for a class action lawsuit for Brokebackmountain. Some poor dolt who thinks he is going to see a cowboy movie and is emotionally scarred.


37 posted on 01/07/2006 1:36:01 PM PST by Ma3lst0rm (Poverty of soul is not easily remedied.)
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To: saganite

It is all an inside job. I personally think companies should have to publish how much they pay for what they sell.
Let the consumer decide that is my mantra.


38 posted on 01/07/2006 1:37:07 PM PST by Ma3lst0rm (Poverty of soul is not easily remedied.)
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To: Ma3lst0rm

I would suggest that if you think something is overpriced you not buy it. That is the true meaning of letting the consumer decide.


39 posted on 01/07/2006 1:42:35 PM PST by saganite (The poster formerly known as Arkie 2)
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To: saganite
The theatres, on the other hand, won't draw any more customers in by displaying movie related merchandise since you're already there to see the movie.

If I were wholesaling the merchandise, I'd want as captive an audience as possible. The movie is fresh in your mind, and that soundtrack was darn good. You can just pick that up on your way out at the gift store (at a premium of course).

There's no reason the theaters couldn't be in competition with the retailers. But, you are probably correct that the merchandising contracts from the studios have a bit of exclusivity built in. Still, the captured audience is a great idea if they could get the merchandise.

40 posted on 01/07/2006 1:45:42 PM PST by numberonepal (Don't Even Think About Treading On Me)
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