A clerk at a movie theater told me that the theater makes little or no money, sometimes even losing money, on movie tickets. She said the ticket sales never significantly overtake the cost of showing the movie. She said all their money is actually made from food sales.
Is this true of all theaters, some theaters, or no theaters? (Specifically movie theaters, of course…)
-FrL-
I’ve always heard this too (OK, it’s anecdotal) but I’m curious as to exactly how little is “little” money on the ticket.
As far as money goes though, those concessions are some real whoppers (pun not intended, but delightfully accepted).
[QUOTE=Rigamarole]
As far as money goes though, those concessions are some real whoppers
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Here is a CNN article that confirms this.
There was some other article within the last one or two years that showed that the gross profit margin for popcorn in theaters was in the 1000% range. I seem to recall that the discussion was based on a question asked of listeners of a radio station to call in to guess.
In one of the old Imponderables books, David Feldman talked about this.
Yeah, movies theaters make most of their profit at the concession stand, which is why they’re so militant about not letting you bring in outside food.
IIRC, (I’m not going to look it up now – it’s late and I want to go to bed) out of your typical $3 bucket of popcorn, the paper bucket cost the movie theater about 25 cents, the popcorn itself cost a few more cents, and the “butter” less than a penny. Everything else goes to pay the bills.
But don’t think that the Ticket sales don’t bring in plenty of moolah, it’s just that the ticket prices are more or less figuered so that the Theatre breaks even on those sales, and makes the profit by concession sales.
So, yes, dudes- by sneaking into several movies on one ticket, you *are *hurting the theatres sales.
The standard figure used to be that half of a movie’s ticket receipts went to the distributor of the film, and half went to the theater. This isn’t quite the case anymore, because that’s based on an average split over the lifetime of a movie. The further a movie is from its release weekend, the larger the split of the money going to the theater gets, in order to encourage theaters to keep older movies in. In the past few years, the number of weeks a movie will stay viable in theaters has dramatically shrunk. The actual split varies with each film, though it’s typically only 10-20% that a theater will get from a movie’s gross on the opening weekend. For either The Phantom Menace or Attack of the Clones, it was 0%.
[QUOTE=CookingWithGas]
<snip>There was some other article within the last one or two years that showed that the gross profit margin for popcorn in theaters was in the 1000% range. I seem to recall that the discussion was based on a question asked of listeners of a radio station to call in to guess.<snip>
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They would make more from my Wife and I if the mark up was just ridiculous instead of absolutely obscene. We rarely buy anything
[QUOTE=enipla]
They would make more from my Wife and I if the mark up was just ridiculous instead of absolutely obscene. We rarely buy anything
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Same here. The only time I ever buy anything at the concession stand is if I’m at the second-run cheap theatre because I value being able to see a film in the theatre for $3 or less and so support the theatre by buying concessions. At a first-run theatre, with its 16 oz drinks for $4.25, never.
[QUOTE=DrDeth]
But don’t think that the Ticket sales don’t bring in plenty of moolah, it’s just that the ticket prices are more or less figuered so that the Theatre breaks even on those sales, and makes the profit by concession sales.
So, yes, dudes- by sneaking into several movies on one ticket, you *are *hurting the theatres sales.
[/QUOTE]
It does hurt, but if you buy popcorn before entering each theater, the theater is probably quite happy with it. They will make more money under that arragement than if you pay for each movie individually, but don’t buy concessions.
The movie has to give a percentage of its gross ticket sales to the distributor/studio. For some films – the first week of an anticipated summer blockbuster, for example – this can by 90% of their ticket prices. The percentage drops the longer the movie stays in theaters, but there’s no point in keeping a film that doesn’t draw an audience even if the theater is getting 50% of the ticket price – 50% of 5 tickets sold is considerably less than 10% of 1000 tickets sold.
So even if you’re filling all your screens, if 90% of your cash flow is immediately going to the studios, it’s hard to cover your expenses. The concessions, with a very high markup, bring in the money to make the difference.
So, let’s assume ticket prices are $10 and the three films you want to see are major blockbusters in their first week. If you pay the $30, and buy nothing from the concession stand, the theater gets $3. If you pay $10 for one ticket, see three movies, and buy a tub of popcorn each time (assuming popcorn to be $4, and the cost of materials & labor is $1), then the theater has made $10 from your visit. Economically, they’re doing much better (and so are you – you’re paying $22 instead of $30).
Of course, other factors, and no theater will allow this (I would assume that the studios would ask for even more money if this were known). But on a purely monetary basis, it’s not a bad deal for the theater.
My girlfriend works at a theatre. They keep incredible inventory counts of their concession products. Each day, each shift, they count product. They count each bag of candy, each mound of cups and popcorn buckets, and each package of butter. The theatre does this because they make their money on concessions, yet concessions are the easier place to lose money. (Losing money through theft, employee incompetence, etc.) Employees are given incentives to “upsell” concession products. They get cash, gift certificates, and movie passes for turning a customer’s “drink and popcorn” order into a combo “drink, candy, and popcorn” order. (If you work enough behind the counter, it is really rather profitable to push combos as the incentives do really help on a paycheque. My girlfriend, if she works concession a few nights, can pull in an additional $50/75 dollars in bonus money.)
Out of curiosity, how does the theatre manager know that a concessions employee has talked a patron into a more lucrative sale, thus earning a bonus?
[QUOTE=Wee Bairn]
Out of curiosity, how does the theatre manager know that a concessions employee has talked a patron into a more lucrative sale, thus earning a bonus?
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The manager looks at the receipts, which will show that a single sale has candy, soda, and popcorn on it. While it doesn’t show whether or not an employee persuaded a customer to buy some candy along with the pop and pop or if the customer had planned to buy the candy in the first place, having incentives will motivate the employees to suggest candy as well as the two staples. Just about EVERY concession customer will buy the pop’n’pop (soda pop and popcorn) or candy and soda. Some will buy a combo on their own, but most need to be nudged a bit to buy the combo, or buy the big tub of popcorn.
I worked in a movie theater for a while. We had all sorts of sales goals and challenges in the concession stand, because most of the employees were teens working minimum or sub-minimum wage, and didn’t really care how well the theater did unless they benefitted from it.
[QUOTE=Lynn Bodoni]
The manager looks at the receipts, which will show that a single sale has candy, soda, and popcorn on it. While it doesn’t show whether or not an employee persuaded a customer to buy some candy along with the pop and pop or if the customer had planned to buy the candy in the first place, having incentives will motivate the employees to suggest candy as well as the two staples. Just about EVERY concession customer will buy the pop’n’pop (soda pop and popcorn) or candy and soda. Some will buy a combo on their own, but most need to be nudged a bit to buy the combo, or buy the big tub of popcorn.
I worked in a movie theater for a while. We had all sorts of sales goals and challenges in the concession stand, because most of the employees were teens working minimum or sub-minimum wage, and didn’t really care how well the theater did unless they benefitted from it.
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So they are not rewarded specifically for upselling, but rather, for selling combos, right?
-FrL-
[QUOTE=Frylock]
So they are not rewarded specifically for upselling, but rather, for selling combos, right?
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Basically, yes. We had something similar when I worked at a major pizza chain. We got a small bonus for each cinnamon stick order, or certain other side items they wanted us to promote at various times. (I believe it was $0.25 per order of cinnamon sticks)
Obviously, some people are going to ask for them on their own anyway, and we would still get the bonus, but the point is that we were more motivated to suggest them to everyone.
The part that doesn’t make any sense, then, is that ushers never say anything when they must clearly be seeing people bringing in water bottles, bags of their own popcorn, etc. At least in Nashville, they don’t. You’d think that the managment would have them under strict orders to challenge this. Although I think that bringing in one’s own popcorn is just nasty. 
[QUOTE=Anise]
The part that doesn’t make any sense, then, is that ushers never say anything when they must clearly be seeing people bringing in water bottles, bags of their own popcorn, etc. At least in Nashville, they don’t. You’d think that the managment would have them under strict orders to challenge this. Although I think that bringing in one’s own popcorn is just nasty. 
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You’d think, but no. Most theater employees don’t give a shit unless they’re in management or being directly watched by a member of management. In fact, they understand as well as if not better than the average movie patron how expensive the concession stand is; one, they’re minimum-wage earners (or SLIGHTLY more but rarely is the theater a well-paid position), and two, they get crap about it every day.
I worked for a chain/franchise style movie theater company. Our individual theater got NO money from ticket sales. All of the money went to the parent company, which then sent a good chunk of it to the movie company. All of the money my theater made to pay bills and employees was on concessions. But unless you wave your outside food and drink in our face (I got a lady who set a thing full of fruit in front of me - insisted that she had the right to bring it in because she was diabetic, and then got really upset when I pointed to our sugar-free selection of ice creams, sodas, and other goodies), the actual employees aren’t going to care, unless they’re up for promotion.
~Tasha