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Author Topic: Pricey Movies-Experts discuss why Richard C. Wolfe Master Film Handler Posts: 250 From: Northampton, PA, USA Registered: Apr 2000 posted 05-04-2011 03:05 PM                        As Jonathan Crist mentioned in his post, this article was written by a reporter for, and published in, one of the daily newspapers in my area. I did think it was an oversight on the reporters part to not have balanced his article on the high cost of going to the movies without including the fact that there are two theatres in the metro area that charge only $3.00 or $4.00 for tickets and both have concession prices of only 1/3 of what they are at the first run theatres in this area. Well maybe he meant only first run theatres, but he didn’t mention that. Then again if you’re talking about the price to see a movie, the run shouldn’t have anything to do with it. The fact that there are 2nd run theatres in the area gives moviegoers the opportunity to see films at a reasonable price, and that is what the discussion is about. Excluding 2nd run would be like saying that automobiles are too expensive as they all cost $10,000 or more, without mentioning that there are many fine, some almost like new, used cars available for thousands of dollars less. The reporter could have done a better job had he done his homework. He actually credited Jeremy Devine from Rave with having used the word cameras when he said: “Devine says the cost of 3-D glasses and technology such as digital cameras and lenses can be attributed to the higher IMAX and 3-D ticket costs.” I doubt that Devine actually said that as I can’t believe that a vice president of any theatre chain would ever say such a thing. I also noticed that someone posted this comment: I have a problem too with theater owners playing the "oh we do not make any movie [money]on tickets sales" card. The truth of the matter is that most theatres DON’T even break even from ticket sales. Any theatre owner knows that, however most theatre employees do not. Film rent is only one part of the cost of operating a theatre. When you include rent, cam charges, payroll, taxes, utilities, advertising, insurance, home office contribution, and a few other small items, most theatres do not cover expenses from box office gross. If a law was passed that prohibited theatres from operating concession stands, having video games and screen advertising, 90% of all movie theatres would be forced to close. While I do think that the price of going to the movies is getting rather high, as a family of 5 can now spend $100.00 for a single visit to a first run in my market area, it still is about the best value around when compared to other entertainment venues. I’m actually delighted that the cost has risen to that extent, as since that same family of 5 can visit my theatre and get all the same for only $30.00, it’s great for my business. I just wish the newspaper when doing a story like this would mention that fact.  |  IP: Logged John T. Hendrickson, Jr Jedi Master Film Handler Posts: 889 From: Freehold, NJ, USA Registered: Apr 2001 posted 05-04-2011 04:05 PM                     Well said, Richard. Those same expenses apply to first run multiplexes as well. There are fixed costs that simply can't be dodged, no matter how hard one tries. It should also be pointed out that over the years, film rentals have skyrocketed as the studios take bigger and bigger pieces of the pie. Additionally, contract terms have decreased the time frame for settlement with the studios, causing many owners cash flow problems.  |  IP: Logged Mike Frese Master Film Handler Posts: 465 From: Holts Summit, MO Registered: Jun 2007 posted 05-04-2011 09:47 PM                        quote: Richard C. Wolfe I also noticed that someone posted this comment: I have a problem too with theater owners playing the "oh we do not make any movie [money]on tickets sales" card. The truth of the matter is that most theatres DON’T even break even from ticket sales. Who has said that a theater can be profitable just from selling tickets? I know I have never said that. The truth is most 1st run theaters get to keep 45% of the ticket sales. Most discount theaters are probably keeping at least 60% if not 65%. There have been numerous examples where it is reported that 90% of the ticket revenues go to the studios when that is so wrong. My competitor had a ex-employee (who was an asst. manager)write the following on their Facebook page "Theater prices for concession are high but thats because theaters make less than 1% on its ticket price". Those statements are used to justify the high cost of concessions at theaters. When theater patron Joe walks into a theater, they will have a gross profit from a ticket sale close to the same as the gross profit from the concession sale. We need both to be profitable. Yes all of the costs need to be covered. Think of how much less your labor would be if you did NOT sell concessions. At least cut in half I would say. You would not need that $5000+ popcorn machine. You would not need as big of a lobby. My point is that we need to honest to our customers to a certain extent. Allowing customers to believe that 90% of the ticket price goes to the studios and therefore that is why you have charge high concession prices (in many case having a cost of goods of 10-11%) is just bad business. Fewer people went to see movies last year than the year before. 2011 is still pretty far behind that down year. The summer does look pretty good though.  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 05-04-2011 10:53 PM                        The 90% myth comes from the 90/10 split terms that are still around to some extent. The full terms are, 90% of the gross that's left after the house allowance ("nut") is deducted. But reporters get bored with all those words that they don't understand what they mean, so they stop writing after "90%."  |  IP: Logged Monte L Fullmer Film God Posts: 8367 From: Nampa, Idaho, USA Registered: Nov 2004 posted 05-05-2011 12:33 PM                     "House Nut" - dang, haven't heard that one for quite the while... (learned all of that booking terms from Excellence Theatres when they had their location seminars to boost up employee morale...in the late 80's before they got soaked up by Carmike..)  |  IP: Logged John T. Hendrickson, Jr Jedi Master Film Handler Posts: 889 From: Freehold, NJ, USA Registered: Apr 2001 posted 05-05-2011 03:56 PM                     I do not book, but it is my understanding that the "house nut" no longer exists. Studios are moving to an "aggregate" percentage for the entire run. This aggregate can be as high as 62%, but never seems to go below 50%. A lot of it is based on the expectation of the amount of business a film will do. The studios naturally negotiate a higher percentage for tentpole releases. So, first run theatres have to make do with the lesser percentage, and that must cover costs. However, consider real dollars. Lesser films may be a 50-50 split, but the grosses are smaller. Thus the old addage: "fifty percent of nothing is nothing."  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 05-05-2011 05:31 PM                        quote: John T. Hendrickson, Jr I do not book, but it is my understanding that the "house nut" no longer exists. It depends on the studio and the film. For us at least, Disney, WB and Fox are all on the sliding aggregate system where the rest are still using the 90/10 vs 60, 50, 40, 35 scale. I have the feeling the reason they are switching over to the SA is because there is less guesswork and/or mistakes. Plus, with SA they can get the full 50-plus percentage even on a later run, whereas with the other system anybody playing a few weeks off the break could get a 40% rate or less.  |  IP: Logged

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