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Last week I went to go see The Dark Knight. As if the eleven dollar ticket fee wasn’t bad enough, the concession stand made my stomach drop. Six dollars for popcorn? Five dollars for a soda? While taking out a loan or making a pre-theater pawn shop run may seem like the only way to get past those high prices – the strange truth is that those pricey snacks are the only reason there are still movies to experience. Here’s why:
In the days of yore, the studio and the theater were one in the same. But in 1948, the Supreme Court forced studios to divest themselves of the theaters due to antitrust laws. (Paramount dominated the theaters in all but 4 of the existing 92 US cities with a population over 100,000.) However sixty years later, though in a different way, studios still control the theaters. Studios run an exorbitant bill, sparing little on actors, locations, post production etc. When it comes time to get a return on their investment, they turn to ticket sales.
See, studios need companies to distribute the films to theaters, and then later to DVD or television. The distributor takes on the cost of making the copies of the film and decides how many prints to make. They also decide which theaters those prints will be distributed to. This is often done through a profit sharing scheme, where the distributor gets between 10 and 50% of revenues. In the case of The Dark Knight, Warner Bros used its own domestic distribution.
The Breakdown
The distributor leases out the movie to theaters that promise to return a percentage of ticket sales. This percentage of this profit sharing scheme changes over the life of the lease. In the first two weeks, the theaters get between 0 and 25% of ticket prices and they fork over the rest to the distributor. The next couple, they get more: about 50%. The last few weeks they get about 75% of the movie ticket sales. But who goes to see a movie four weeks after its release? This leaves the theatres with no option but to raise ticket prices and charge as much as they possibly can get away with at the concession stand.
However, it’s not all about the popcorn. Theatres also make money the same way magazines, radio stations, and websites do: by selling ads. The local advertising that shows before the movie begins generates a good percentage of revenue for the theater. As for the previews, the studios give trailers to theaters, and pay for each showing based on the number of people who saw them. Per a theater owner in Long Island, “we have to call in our numbers every night to the film companies, and they give you ‘x-amount’ per person.”
So that’s the story. As tough as it is to accept, I wouldn’t have been able to enjoy The Dark Knight if it weren’t for the expensive concessions I begrudgingly passed by on my way to theatre 10 and all the horrendous previews I endured before my eleven dollar movie finally started.
Shhh…super secret special for blog readers.
Went to Dark Knight too… great movie, but the ticket was only $7.75 in southern Minnesota. Thank goodness. We kept track, though, and the actual movie didn’t start until 25 minutes after the stated starting time. Crazy.
Is soda seriously $5 somewhere? It better be piped through a tube to your seat throughout the movie.
I remember when I was a kid and my mom would drop my brother and me off at the theater. We would go to 2 movies (4 tickets) and get something to eat, all for $20. That was late 80s-early 90s. Those were the days.
Josh
posted by Josh on 7-24-2008 at 11:20 am
Heh. I live by St. Paul, and all the movies are $10.
Our movie started 25 minnutes late too, but because of projector problems. Took them 20 minnutes to get the projector to work, then we had to watch the ads… But I got a free ticket out of it, so I’m not complaining.
The thing that I think is ruining theaters is AMC, which has such a huge monopoly over our area. When they opened their new theater last year, several other smaller ones had to shut down, thus making it so there was no competition.
posted by Mark on 7-24-2008 at 11:28 am
Agreed about Long Island. Everything here is so expensive. It seems the movie tickets get higher each year. I no longer buy food at the theater, just a quick stop at a store beforehand saves enough money to make it worth it…better choices of candy too!
posted by Joshua on 7-24-2008 at 11:48 am
That’s very interesting about the way the profit-percentages work. It explains why studios put such a heavy emphasis on a movie “opening” well.
posted by Allison on 7-24-2008 at 12:02 pm
At the United Artists I go to, Friday night tickets are at least $2 more expensive than other evening tickets. The concessions are good, though - I got a three-pack of Reese’s Cups, a bottle water and a personal pizza for $11-something, which isn’t bad (relatively speaking) for what’s basically a meal.
reCAPTCHA: Whitney permits. I told you not to hang around that girl … ;-)
posted by Joanna on 7-24-2008 at 12:36 pm
Here in Portugal I pay $7 for a movie ticket and $10 for a big bucket of popcorn (suitable for 3 persons) and 1 litre of soda
posted by António Afonso on 7-24-2008 at 12:50 pm
Living in Austin Tx, we are spoiled with the Alamo Drafthouse theatre ‘chain’ - where we can partake of beer, wine, fancy drinks, fancy desserts, pizza, burgers, salads, and specialties of the theatre…each theater has its own chef and they concoct special meals for big-run movies…I wont go to any other movie house in Austin because I’m so addicted to the Goat Cheese Salad and warm chocolate chip cookies…popcorn and soda…ugh…
posted by donner on 7-24-2008 at 1:31 pm
The movie theather I go to costs 5.50 a ticket. And I can get candy and a coke for 5 dollars. It’s a first run theater, too.
recaptcha: athletes tire… :)
posted by Case on 7-24-2008 at 2:02 pm
My movie theatre back in my hometown charges $5 for student tickets and popcorn starts around $3.50 for a small.
I now live in NYC where movies are $12 and small popcorns begin at $6. Yes, I miss home. A lot.
posted by Debbie on 7-24-2008 at 2:36 pm
I understand complaining about ticket prices. But concessions.. just don’t buy any! Go to the movie right after dinner when you’re still full. It’s only a couple hours, you go longer than that without eating most of the day.
Then you can go home and eat ice cream or something better than whatever junk they have at the theater anyway.
posted by Celeste M. on 7-24-2008 at 3:13 pm
Now I will show my age — In the mid-50’s it cost a nickel or dime to go to the movies as a kid.
In the 60s, I got into a double feature, with cartoon, with “shorts” for only $1.20. This was in Milwaukee.
Today — adult tickets are 8.50 where I live, and a large/large (popcorn/soda) combo is $10.25, $11.00 if purchased separately.
And they don’t even show cartoons any more!
Plus people yack all during the movies, they have cell phones, kids running amok, and rude staff.
Bah — I’ll wait for cable or the DVD versions of movies.
posted by WizardBoy on 7-24-2008 at 4:12 pm
that works unless you have to wait in a long line to see the movie
posted by james on 7-24-2008 at 4:22 pm
NYC- ticket is $12, $13 if you order online and a small popcorn and small soda is around 10-11 together!
posted by anon on 7-24-2008 at 4:35 pm
donner: Ahhhh how I miss the Drafthouse. We had them in San Antonio too, but I only went to the one in Austin.
More and more theaters in San Antonio are adopting the eat-in theater theme though. Not so in my new home state. What a shame.
posted by Beth on 7-24-2008 at 4:37 pm
Nice article; interesting to know some of the behind the curtain stuff.
One of the three theater complexes where I live installed digital projectors a couple years back. When I first heard about it, I thought ‘meh’, but then I went to see Ratatouille there with my kids; wow! The difference is striking, especially with animated movies.
The goofy thing is that ticket prices at the theater with the digital projectors are about $1 cheaper than the other new-run theater; about $7 I think.
posted by Dave on 7-24-2008 at 4:37 pm
When I was a kid we could go to the movies on Saturday for either two wrappers from Williams’ Bread or the side panel from a six pack of Coke. Of course we all had to sing along with the “host” that extolled the virtues of the bread and soda, but what the heck! It was probably well worth the afternoon of peace and quiet for our mom.
posted by Lyn on 7-24-2008 at 5:10 pm
“But who goes to see a movie four weeks after its release?”
Meeeeeee! And preferably during odd hours like weekday afternoons and right before the movie leaves the theater completely. I love movies and as a comic fan, I’m dying to see The Dark Knight on the big screen. But there’s know way in hell I’m gonna put up with all the first-weekend, cellphone-talking-texting, idiot gabbers. And if I eat anything at all, I’m sneaking in a box of candy from the drugstore.
posted by Da Fug on 7-24-2008 at 5:49 pm
In case anyone is terribly interested in this topic, there was a good podcast posted recently by Russ Roberts called EconTalk (free on iTunes). The entire program is about the movie industry and how money is made. Econ made entertaining - worth a listen.
posted by Jim on 7-24-2008 at 7:03 pm
I live north of NYC by about an hour and have not attended a showing at a theater in about 2 years. But that comment of being dropped off at the theater as a kid brought back memories. To date myself….I would ride my bike to a theater in Sarasota Fl as a 8 y/o, watch a movie and the latest serial release of Flash Gorden. Would be there for over 2 hours and spend .10 for a drink, .15 for popcorn (tub) and .50 for the ticket. The year…..1961.
posted by Owen on 7-24-2008 at 8:28 pm
Here in LA, we have a beloved neighborhood theater that only shows one film (90% of the time it manages to be the one I most want to see). It’s called the Vista (also in a shot briefly towards the beginning of True Romance when Clarence and Alabama exit the movies) and they’ve taken out every other row so you can really stretch out. Tickets are dirt cheap. Previously I would never buy snacks at the concession stand, now I do whether I want something or not, knowing that that’s how the place stays open. Viva la Vista!
posted by Pete on 7-24-2008 at 8:29 pm
In New Zealand (at least in Wellington), movies are typically $15-$18. The “cheap” night is Tuesday, when all movies are $10 (even if they were just released the week before).
One chain gives points for every dollar spent on tickets, and rewards every $30 or so.
Not sure how much popcorn is - $4? Don’t drink soda, so meh.
The food is fairly good, though, and you can buy wine, beer, ice cream cones and hot tea at the theatre.
posted by Dawn on 7-25-2008 at 2:29 am
In Vegas I found that every year the ticket prices get hiked up by at least a quarter or so, sometimes as much as a buck some years.
Matinee shows have gone up to 7.50 from what was once 5.25 (back in 2003 or so). Evening tickets are an even 10 bucks, but at Regal cinemas I get a buck off with my student ID.
Fri and Sat tickets are 25 cents more.
It sucks it’s such a rip-off, but if people didn’t bite the bullet and pay it, they wouldn’t be able to charge what they do.
And I agree: why bother paying for crap concession food when you can stop off at the gas station and load up?
I always hated that you had to smuggle your food in like a criminal just because you didn’t feel like blowing even more cash than you already had on the ticket.
posted by Laura on 7-25-2008 at 5:38 am
There was a bit on Nightline last night about movie concessions; according to that report, theaters keep only a small percentage of the ticket take. Concessions is where they make their money to keep the lights on and employees paid. Not sure if that is exactly the case, but even if true I don’t see that as a justification for $5 popcorn and $5 sodas. Any economist worth his salt would argue that theaters could increase their revenue by dropping prices, thus increasing volume.
posted by Dave on 7-25-2008 at 8:10 am
What are you all complaining about? :) Here in Tokyo, tickets are $18.
Diana, great post! I’d love to see a follow-up on how the distribution system works overseas and how studios decide when and where to open their movies. Sometimes Tokyo gets movies within a couple of weeks of their stateside release (”The Dark Knight” is opening Aug. 9), but often we have to wait months even for big movies — “Sex And the City” STILL hasn’t played here!
posted by Karen on 7-25-2008 at 9:24 am
Interesting reading, I’m glad to finally understand the ins and outs of the movie theatre business. I wonder, though…I mean I understand the high cost of foodstuff, but do they need to sell so much of it at one time? The sheer SIZE of the concession products…it’s ridiculous. What is their small drink, 20 oz? Not necessary. I’d think theaters could save some money on portion control.
posted by gokarm on 7-25-2008 at 11:27 am
Here in my corner of the Midwest, the advance tickets to see The Dark Knight were about $7 (with a military discount).
Unfortunately, concession snacks are horribly expensive. To solve this problem, all the females in my group brought huge purses and stowed all sorts of treats in them. We had boxes of Swedish Fish, Sour Patch Kids, one-pound bags of Twizzlers, and quite a few cans of cola. As for the guys in the group, they used our bags to stow their treats. The best part of this: the theater management didn’t even care. We unpacked as soon as we got into our seats, and almost all the people around us were doing the same. It just makes more sense: almost everything we brought was 99 cents at Walgreens!
reCaptcha: “conceded Earle.” What does Earle concede to?
posted by Jenn on 7-25-2008 at 2:05 pm
To be fair, movie theaters do also have the power to mess with studios if they start acting too obnoxious. Theaters control which screens get which movies, so they can pretty much decide if X big movie is going to get 6 gigantic theaters or 2 tiny ones in the back of the building. More than one major movie has gone down in flames because the studio pissed off the theaters. It’s part of the game.
posted by Liz on 7-25-2008 at 4:54 pm
In the Philippines a movie costs $2.50 - $3.50. And since the time zone is a day earlier than the US, we get to watch most films a day in advance! Some people usually fork out $10 for advanced screenings that are tied up to organizations for a cause or fundraising events, so you its not all about the money.
Concession stands are a bit of a problem though. Popcorn that costs a dollar is salty with a hint of butter at best. Movie theaters at big malls sell their own line of overpriced bland chips. I simply get a hotdog or some burgers from a nearby local fastfood or stop by the supermarket to buy cheap food. Some theaters even allow rice meals and soup to brought inside the theater.
I love my third world country :)
posted by Leizl on 7-25-2008 at 9:16 pm
i read with great interest. there have been times in my life when it was not uncommon for me to go to the movies three times a week. i hate the excessive prices on snacks at the theater. i mostly skip or bring a little something - shame on me. i guess you could say that i am a dead beat movie goer.
posted by otto burgess on 8-3-2008 at 11:24 pm