Tuesday, April 26, 2011

Ask Joaquin: Why Are the Concession Prices So High?

From many random movie theater customers:  Why are the concession prices so high?

I haven't received any new questions from you guys, so today's "Ask Joaquin" is in response to a question that I get asked incessantly while working at the movie theater.  People are always commenting on the high prices of the concession items.  Some people just joke about it saying things like, "How much is my total?  A million dollars! Ha ha!"  But other customers get absolutely offended and ask, "How can you sleep at night?"

It's pretty easy to sleep actually, because--guess what--overcharging you isn't exactly murder!  In fact, you aren't being forced to buy concessions at all!  It is physically possible to watch a movie without eating popcorn.  You can see the prices and decide whether or not you want to pay them.  You can always say to yourself, "I don't feel like I should pay almost five dollars for a soda.  I think I'll pass on that."  But yet here you are, buying these optional treats anyway while whining to me.

But why are they so expensive?  Well, I used to just think that movie theaters charged high prices simply because they could.  I assumed they figured they had a monopoly on snack foods (you can't bring in your own, you know) and they knew people would dish out the money anyway.  However, theaters charge so much on their snacks because they actually have to if they want to make any money.

Now you're thinking, "But they already charged me an arm and a leg on the movie ticket... isn't that enough?  Those greedy poop faces!"  Well, the truth is, the theater doesn't actually make very much (if anything) on your ticket!  Do you know who does?  The movie studio that made the movie!

This is how it goes:  The theater signs a lease with the movie studio to play their newest movie.  The movie studio generally takes in 75% - 100% of the profits from ticket sales.  After a movie has been out a few weeks, the theater may start to keep a larger percentage, but really, they aren't making a profit from ticket sales.  The little they make from the ticket doesn't even begin to cover the costs of running all of the projectors, maintaining such a large building, employing so many employees, etc.

So to not go bankrupt, they have to raise the prices on the concessions and hope that you come and buy some popcorn or soda.  A theater manager once said, "We are not in the movie business... we are in the candy business."  So if you like the fact that a local theater is offering a showing of the movie you want to watch, you better buy some dang candy!  Because if you don't, your theater will shut down and you'll have to wait for the DVD release!


jenny said...

just tell them it's because they're not very pretty and they're not very bright. =)

Mishqueen said...

Yeah, Jared used to work at the LJ theater, and he explained why the manager handed out so many free movie tickets for the older movies. Unfortunately, I didn't buy concessions then either.


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