here's a different option that seems to me working near me. there is a theater not more than a 20minute drive that only plays movies a few weeks(1-3weeks after opening night) old. the theater is small( 5 rooms half the size of a normal theater) but well tended and the seats are comfortable(I think 7-10 employees ran the entire building). a concession combo of pop/candy/popcorn costs under $10/person. but here's the kicker: the movie tickets only cost $1.50/person, only $1 during matinee!(did I mention that there was less than 3min of advertisements, most of which were local businesses?)lets face it, I'm not seeing every movie that comes out, let alone WHEN it comes out. So instead of spending $60 to take my girlfriend to the movies and be stretching our budget thin, we can go 2-3 weeks for the same price and still do other things for fun. I think if more theaters did this we could have a more pleasant experience.

Supply and Demand rules all business right? If the number of cinema goers starts to fall dramatically then eventually prices will start to go down. Maybe film budgets will go down first, and ticket prices later, who knows. I expect that those who make big money now will try to hang onto their pay checks for as long as possible, seeing who will budge first. Are we really all going to stop going to the movies? We LOVE the movies. That's why there are so many theatres, so many movies made, and so why ticket and candy prices are so high. 

We as consumers have to make it known that we don't want it anymore before they will consider offering it for less. No one else can do this for us.

if you don't like "paying" the actors for making the movie then DON'T WATCH THE MOVIE

I completely agree with you about the cost of making movies. An Adam Sandler film averages at a cost of 75 mil!!! I can only assume he is terrible at budgeting his films. The promise of CGI was that everything could be done cheaper and yet it does not seem to be the case. It is also true that the number of theaters in America have almost tripled since the 1970's. They have also become much more technical as well as expensive. I wouldn't quite place the theater industry as the poor slaughtered lambs of Hollywood. If Hollywood needs to be ashamed of its cost of making movies then theater owners need to be ashamed of the cost for a box of Goobers. If two or three people are running the concession stand, just a handful of customers could pay all of their salaries for the night. I think we are forgetting how ridiculously high the mark-up is for items that are very cheap for them to buy. You are right, they may be in the candy business, but it's obviously a good one. Also you can't dismiss the money they do make from showing films. It's a combination effect that I don't think is as desperate as we would be led to believe. I think the idea of 60 dollars for a DVD or extra taxes on large TV's is a bit much. If the industry is hitting in such a manner then it's all over because it would be a suicide move.    

First, don't needlessly hate on Chris Tucker. Daaayym!

You mentioned hikes in DVD/netflix/whatever other revenue sources should funds dry up elsewhere. Surely if Theatre owners did stand up collectively then this would happen anyway. If the production houses think that they should be getting X amount back from making a movie then they will make it happen some way or another. The only entity that can really send a proper signal back that they have priced it wrong is the end consumer base will be listened to in time as long-term statistics are analyzed and it's decided one way or another that demand is shifting or whatever.

If we as end consumers expect theatres to stand up and fight so we can have lower ticket prices, then I think we should be getting involved as well. A sense of community with the local theatre should be developed so that the voice of the end users can be heard in discussion as well, and action can be organized.

In my mind, I almost think that the Movie companies should be paying a heavier price to the Theatre companies because they provide the only facilities where their product can actually be used as intended.

As you said, we have to look at them (production houses and theatres) together. It's part of the same experience.

Here's another idea, and I'm not sure how it would work, but what if the production houses owned the theatres. They only showed their own movies and could manage all the costs into it, and we as consumers could choose between going to see that new Warner Bros flick, or the Miramax, or whatever. Smaller houses could negotiate screenings with a bigger house, and it then some middlemen would be avoided.

Dark Knight, didn't come out 30yrs ago in some supposed "golden age" of movie industry ethics and responsibility. Neither did Gladiator or Toy Story. And all the "wasted" money is still going into advancing mankind's ability to entertain and amuse. What you are calling for is for the people en mass (i.e. the Government) to take over and regulate the industry, and last time I checked N Korea and Iran weren't putting out any oscar nominees:P

Great article but it must be said that you subjectively gave Chris Tucker some fight, him being your chosen scapegoat. All hate must be directed towards the 'game', which is the studio/theater system and not one of 'the players' (Chris Tucker), as he's just a noble product of the system.

I have the solution!!! nice article by the way...

best post i've read. How different is this problem in 2012. Your article was written in '07.

Can someone tell why the production companies do not own their own theaters, so they could get 100% of the profits?

"$25 million? who do you think your kidnapping Chelsea Clinton?" It is an outrageous market. It seems to stem from how much the actors etc demand etc, and know they can get it. I know personally what will ever keep me from going to the movies is the price of the tickets. I am only going to see a movie once in a while even if it is a big movie that I have been wanting to see if it is going to cost me $15 a pop and not a guaranteed good seat. At that point why don't I just wait until it hits the $1.50 theater, red box, or DVD. A ticket price $15 is normally what a DVD costs, I can watch a DVD as many times as I want.

Just to throw in some up-to-date ticket price figures; The gf and I took our little boy to watch the Lion King 3D the other day and it cost UK £29.60 (currently $47) for us 2 adults and the child. We were intending to watch the 2D version (as 3D is ****) but we misjudged the times. The 2D version would have been £22 ($35). (Incidentaly the gf also insisted on spending £14 on 2 small cokes, 1 small popcorn and 1 ice cream!!..women.)

Albeit a classic, I think this is an outragous price for 2 adults to take a child to see a childrens film and we would not have gone if we had known the price. We will not be going again, as I refuse to be party to this whole farcical business sector. I will not spend my hard earned money paying for the studios inefficiencies and the theatres ineptness. The only deffense the theatres have for not showing solidarity and banding together to confront the studios is the possibility that the studios might have enough money/credit to afford to wait them out (with films in the pipeline) until the theatres go out of business and the businesses or property leases are bought out by the top studios, who will then take 100% profit and have more freedom in ticket price structure. Are there regulations in place to stop studios having too much of a monopoly?

I completely agree with this post in that the solution is for the theatres to band together and support one another. It is that simple. Put a universal price plan in place where they state that from a certain date (eg. June 2013) they will pay a set % to the studios (potentially based on the films predicted gross) but not anywhere near as high as the % the studios currently set, but at a price that will allow them to make a profit whilst keeping tickets at a price that will allow the theatre to be more affordable to potential customers and will drive the dwindling demand back up.

Or... they can carry on independantly working themselves into bankruptcy with this unsustainable business plan.

P.S. I'm 24, when I was a boy we used to go to the cinema every weekend for £1 a kid :) including pre-film entertainment (not adverts).

Interesting read, cheers.

One thing I have picked uoon at the local cinema here in Vicksburg ms is this: management holds films over way too long. Case in point: the last excerism has been in Wilcox for almost three months now. Holding films over like this one for a long peirod time has created some problems. One some of the locals have been complaining about this; another fact the cinema owner appears to have a predjuice against Disney pictures. But to hold a summer film over into the fall is only going to make a cinema house lose profit.

Another fact that: the local theatre hasn't gotten 3d tech to compete with his competitors in Jackson metro area. And none of the paranormal activity films didn't open here either I might add. A lot of the blockbuster films have bypassed this small market all together.

so this is why movie theaters charge a million bucks just for popcorn and soda, that explains a lot.

I like the way the movie industry works. I just go to a morning showing and never buy the overpriced food. Pretty cheap!

People are sheep. Nothing will change. Greed rules all.

With the massive size of some of the superchains of movie theaters, such as cinemark, is it not feasible for them to produce their own major motion pictures and keep all the green in house?

Oh and as for the theaters getting together to not show a big film, it wouldn't work for many reasons, but also for the fact that even if the studio is taking in 100% for a movie as big as Star Wars or The Dark Knight, the theater is probably going to have loads of people buying concessions.

It sucks for us, you're right. But it's not going to change. The theaters are happy and the studios are happy. We aren't. Do they care? No!

Wouldn't theaters taking 50% of the profit increase DVD and Blu-Ray prices as well?

I am glad to have come across this article about movie theaters. I am an employee at one of the only theaters in Vegas where it isn't part of a casino. The low income neighborhood surrounding us has allowed ticket prices to go down to about $4 for matinee and about $6 at night time where they were previously $9 and $12. Our concessions are just like you described and our low ticket prices don't seem to make customers less aggravated at the snack bar. I wish we could fix up our theater but with what little money that is made we get paid with. We are often undermanned and almost never prepared for anything. It's so bad we double up on movies shown per auditorium. In other words we alternate two movies throughout the day in one room. I want to boycott the studios because if we don't start generating some revenue soon we will be closed because we can't keep up to code with no money to do so.

From a theatre's profitability standpoint, there are way too many variables to consider. A large 20 screen theatre is going to have different dynamics than a small 6 screen theatre. A corporate theatre (Regal, AMC, Carmike, etc) is going to be different than an independent theatre. Large corporations can negotiate better with the studios and get better support. They can get bulk discounts from their suppliers on all of their purchases, they can set up national accounts for their on-screen advertising, etc. Smaller theatre owners don't have these options, but they also dont have people in the corporate office making millions of dollars, so maybe it balances out a little there.

Next time you're at a theatre, take a look around. Is it a newer theatre with designs and fancy furnishings? Those things cost crazy money to build. Someone above said that theatres lease their buildings, but I've never seen that. Perhaps some of the older, small theatres do, but that's probably a thing of the past. The theatre I used to work at still hadn't paid for itself after 10 years of being open.

A theatre with a great location can be paying upwards of a million dollars to lease that location. Big theatres take up a lot of land when you add in the parking lot. Imagine your average ticket price is $7.00 after factoring in discounts for matinees, children, etc. If your average take is even 40 percent, you're looking at $2.80 per ticket. That means you have to sell over 350,000 tickets just to pay your lease.

I never got a look at the utility bills, but movie projectors pull a lot of power. Look around your theatre and see how many lights there are in the lobby, hallways, auditoriums, bathrooms, etc that are always on. Think of running air conditioning and heat for a building that size. Think of how much water they must use for all those sodas they sell and toilets they flush. Remember too that a large movie theatre can easily have 30 phone lines. They need multiple lines for their showtime recording, their customer call-in line, their corporate data lines, fire/police alarms, etc. All of these things add up to a LOT of money.

Let's take a quick look at payroll. Minimum wage is up to $7.25 now. Some states have their own minimum wage that is even higher. A big 20 screen theatre will easily have over 300 6-hour shifts throughout the week. That's over $600,000 each year, and that's not including over 50 additional shifts for supervisors and managers that make more than minimum wage and may have bonuses and other benefits.

The theatre also has to allow for maintenance and repair of the building and equipment. They also have to have their building cleaned by a janitor company, that is wicked expensive. They have to pay for snow plowing, landscaping, parking lot sweeping, etc. They also have to occasionally upgrade their building to keep people coming back.

Lawsuits. In this suesociety that we live in, everybody is looking to sue big companies. People trip or fall, claim discrimination when they get kicket out, etc. One or two bad lawsuits each year can easily be over a million dollars.

Supplies. They don't spend much on popcorn and soda, but it does add up. They also have to buy the cups and bags and candy and whatever else they sell. They have to buy office supplies, janitor supplies (lots of toilet paper), etc.

There's a lot more, but I'm running out of time here. I just wanted to give you a few more things to think about. If the theatre belongs to a large corporation, that corporation wants to make money to pay their bigwigs, not to mention the theatres all have to pitch in to pay the different departments - legal, human resources, computers, district managers, accounting, etc. Oh, and don't forget Uncle Sam takes a nice amount in taxes.....

Your right he is a hack, and we have to put up with sandra bullok, one film wonders. I am interseted in opening up a... wait for it... A drive in, With all the possibilities of non night income and the world of movies to choose from (not first run). How do you contract for a series or a 6 month old movie. let's face it the Drive In concept is 50% movie and 50% outside experiance. What is the down side I know most of the upside. I'm in the Florida Panhandle with a 10 month movie season.

I live in Norway, and the rates here varies from $13 to $17, even if the theater itself (screen, sound and seats) sucks.

Thanks for the article. I was wondering why AMC theaters sells "silver experience" tickets in bulk at $6 bucks a pop while "gold experience" ones are $7.50 a pop. The only difference between the "silver" and "gold" ones is that for silver tickets you have to wait 10 days after the movie is released. But considering the business model, it makes sense. The longer you wait to see the movie, the more money the theater makes rather than giving it to the studio. That's why the studios advertise so heavily - they DEPEND on people seeing the movie immediately after it is released. People like me who wait for 10 days to pass are their worse nightmare. But in the end, I only pay $6 a ticket and I bring my own popcorn.

Great article. I don't see the system changing any time soon. If a theater refused showing a film like Transformers: Revenge of the Fallen, then their income would fall down faster than a hooker's skirt. The Theater Owner Association could contemplate it and say: "Why don't we stand up against this?" but they know that it's too risky. Some theaters will play the movie nonetheless, and like you said, theaters need money to run efficiently. I don't see a clear solution to this problem because I just don't see theater owners doing this and I don't see studios lowering production costs.

It sort of starts with all of us: the studios, the theaters, and the fans. Why do theaters green light pieces of garbage like Disaster Movie? Because they know people will actually go see it, and theaters will screen it for that same reason. I sort of see it as a Domino Effect because we're all effected by one another in a way. So where should the solution start? As for me personally, I don't have a damn clue.

And to people saying that we should wait for a Matinee two weeks after a film is out to save some money: that wont work. Face it, we're human. We want the next big thing, and with today's era of intense marketing months before a film's release, fans only get hyped more and more to see a movie, and I'm no exception. For example, I was 100% hyped to see The Dark Knight when it came out. I was freaking out over the fact that I couldn't go at midnight (yes I'm that much of a fan) so instead, I took the first showing of July 18th which was 9:00 AM. EVERYONE was talking about it, and it sucks being a film fanatic and missing out on the next big thing. Sure, you'll eventually see it, but you want to see it NOW. It's human nature.

Here in Australia we pay over $17 to go to the cinema, and then pay even more for the sugar hit to go with it.

True insanity.

Lesson 1 = I will never go to a movie in the first 2 weeks again.

This gets worse when you consider the fact that actors do some movies for the paycheck and then other movies at a lower dollar value because of the quality of the script and director. If you follow that concept through to its natural conclusion, big budget films pay even more to their stars to produce product that even their actors think is so so. Then they have the gal to be arrogant towards the very people that display their product - the theatres. So, they spend the GDP of a small country on a crappy movie that lasts 2 weeks and only the theatre loses out.

Turns your stomach doesn't it.

There was a strike in Bollywood recently between cinemas and producers, this is how it ended,

http://www.bollywoodhungama.com/news/2009/06/05/12956/index.html

Wow, thats amazing! You have to also think about all the money that goes into the advertising for movies as well. Such as Pop up displays and Movie banners. It all adds up after awhile as well.

I recently entertained the idea of purchasing a large closed down movie theater with a group of large investors but after reading this and other literature on this issue I am seriously questioning this financial endeavor.

Thank you very much for the explaination it was very informative and enlighting.God bless

thanks JAMES (theater owner) for your insight.

That is truly some jaw-dropping data to chew on.

HOUSE ALLOWANCE? wow... thats harsh.

You see, briefly, and it in her, fucking and sucking whores just so.

This theory would work if they did stand up together, as opposed to the alternative others think (which is the studios just increasing prices on movies).

If enough studios could form a "union" together, and "strike" big enough movies..say the next harry potter.

Refuse to show the movie at ALL locations in the union until they not only lease the movie to them at the STANDARD rate, but cut them a 50% share (which is only fair, the studios make the movies, the theaters show it to the masses, it takes two)

Then things would get done. Think about it. The next batman movie..probably is going to make 400 million AT LEAST. If carmike, and lowes and weststates told them to suck it hard, and refuse to show it, the studios would LOSE so much money they would have to accept.

Yeah the theaters would miss out too, but since they are not showing the movie, paying the licesning fees, or staffing people for its showing, they are not losing ANYTHING! They are making their money, and their employees paychecks by showing the other 900 million movies that movie patrons come to see.

Start with the big movies, show em whose boss, and it can be done.

For a movie theatre to stand up to the studios, their corporate office would have to be a lot farther from screwed up than they are.

Greed would outweigh anything. No matter what the savings pushed back to the theater they will still want more money and continue to raise prices. Hollywood is a corrupt system of overpaying hardly believable actors in a lot of cases, yes there are the good actors that deserve the money(maybe no 15mil a flick) but Chris Tucker in no way deserves more than 100k for any move he's ever made...and that being generous...

I work at showcase cinema de lux in England, and the prices are so high at my cinema, nobody bothers coming, which therefore means the cinema loses money, and to try and save some of their loss they cut our hours....i only work 4 hours a week because of rediculous cinema prices, something needs to change.

Great article. I have always known that it is not the theater's fault that we pay an arm and a leg for a night at the movies, but this gave me a much better understanding of how it works. I also agree that not going to the movies will never fix the problem. This and all the other problems with the economy all stem from one thing. GREED. Filthy hedonistic wipe your butt with silk over a solid gold toilet GREED. $25 million for one freaking movie?? Criminy he's already set to live in luxury the rest of his life. How much more does he need? Even A list actors don't need to get paid that much. I don't even want to know how much the studio executives make on each movie.

Heres an easy solution, only go to the movies you really want to see in theater, don't buy from the concession stand and watch the flops on network tv when they naturally appear (or just get a netflix subscription).

Honestly though, the system is supply and demand; the prices are high because people are willing to pay those high costs- if the collective population refused to pay the price (or couldn't) then it would have to drop to meet demand, thats how all economics work. (fundamentally anyways, the rest is just parasitic bullshit attached to confuse the average onlooker).

One major flaw in the theaters standing up to studios is I think the two major theater companies in America are owned by studios; so I don't see a subsidiary company back-talking to its parent lol.

you are correct, it is a really bad arrangement between the studios and the theaters proving once more that studio heads are scum.