When we walk into Movie Theaters we are constantly bombarded with air conditioning, new movie releases and the smell of buttery popcorn. Movie Theaters make money in various ways from various different streams, however the ticket sales may surprise you.
Ticket Sales
Most of the ticket sales that consumers pay goes back to the studio within a first couple of weeks of the movie’s release. The remainder of that percentage is usually enough to cover the cost of the ticket, and ticket sales employees. But as an incentive the studios give the movie theaters a larger percentage a few weeks after the release, in order for the theater to keep showing the movie, and hence continue earning money at the box office.
Concession
This is the movie theater’s main revenue stream, this is why you see the $7 per tub of popcorn and $5 per soda. Without the desperately needed concession stand theaters would never earn any money. Recently, movie theaters have began introducing other product offerings including; cafes, coffee, ice cream, and other various high-priced foods.
Arcade
Movie Theaters also earn money from their arcades, however in recent times many theaters are doing away with arcades. Since the mainstream of the play stations and online computer games, the demand for arcades has just subsided; also nobody likes paying $1 per game play.
Advertising
Movie Theaters also earn money for advertising, including posters for new releases, commercials, and new movie trailers. The movie theaters tell the studios how many persons viewed the trailers based on ticket sales and then the studios will pay X-per customer.
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