my profile | my password | search | faq & rules | forum home

» Film-Tech Forum ARCHIVE   » Operations   » Ground Level   » Tickets vs Concession Profitability for the 4 biggest chains (Page 2)

This topic comprises 2 pages: 1  2

Author Topic: Tickets vs Concession Profitability for the 4 biggest chains Mike Frese Master Film Handler Posts: 465 From: Holts Summit, MO Registered: Jun 2007 posted 02-25-2015 07:16 AM                        This is what I know: People in the United States and Canada (according to NATO) are going to the theater 24% less often than they were 10 years ago. To me that is a very bad thing. We operated our theater based on the idea that people will come more often and buy concessions if prices are more reasonable. Meaning not charging to where you earn 85+% gross margins. Our per caps where just as good as most everyone else. Our numbers year over year were better than the chains that I followed in the general area. Did we earn less gross profit per person on concessions that charging what the big chains do? Sure but we could handle an increase in 15-20% more people quite easily without increasing our labor. Could that be taken to a wider scale? Who knows. I know Andrew charges much lower prices than the national average too. Now on to leasing: To Lyle- I have negotiated a number of leases with one being in the position of power in the deal since this was a theater space that had been sitting empty for a while. I thought I did very well on that negotiation. Now most of the bigger theaters do have some power as finding a replacement tenant for a theater is pretty hard to do. Most rent structures for key tenants (and theaters usually fall into this group) are usually for a small base rate plus a % of sales. But let us look at the real numbers from RGC: rent as a % of revenue from 2007 to the first 9 mos of 2014 when revenues were down double digits: 12.6, 13.1, 13.1, 13.6, 14.3, 13.6, 13.6, 14.4. So the two highest years were with big drops in box office for that time period: 2011 and 2014. Someone mentioned film rental. Here are the film rentals for RGC from 2007 till last year: 53.1, 52.6, 52.5, 52.5, 51.8, 52, 52.3, 52.7. Creeping up? Sure but still lower than what they were in 2007. Anyway, keep on encouraging high cost of concessions in a industry that is seeing 24% less people.  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 02-25-2015 10:16 AM                        You're assuming that it's just the cost of concessions that is making attendance go down. It's not. There are many other factors that we can't do anything about, such as the short video window, the improvement in home theater quality, the quality of the movies we get, etc. My own personal opinion is that it is the video window more than anything that is causing the attendance erosion. If people knew that the video wouldn't be out for six or eight or ten months or more, attendance would bounce back up.  |  IP: Logged Terry Lynn-Stevens Phenomenal Film Handler Posts: 1081 From: Toronto, Ontario, Canada Registered: Dec 2012 posted 02-25-2015 11:43 AM                     How much do you honestly think a longer window will increase your sales? Do you think it will extend the run or just boost the open 10 days?  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 02-25-2015 12:35 PM                        Well it doesn't matter because there's no way the studios are ever going to increase the window. That boat has sailed, as they say. But as has been pointed out, people are going to the movies less frequently these days. There has to be a reason why that is, and I don't think it's JUST the concession or ticket prices. If a movie has appeal to you, you'd be more likely to see it in a theater if you knew the video wasn't coming out for a long time. The way it is now, and we all know how "time flies," most people perceive that a movie hits video just a couple months after theatrical (even though the actual number is more like 14 weeks). It's impossible for a young person like yourself to comprehend how it was "back in the day." When I first got in the business there was no video, no cable TV, no HBO, and of course no internet. The only way to see a movie was in your local theater, until the network TV "movie of the week" would play it (with commercials and edited, of course). And your TV had a 25" screen, or smaller. With so many other ways to see movies these days, and those other ways being made available closer and closer to the theatrical debut, it's no wonder attendance is eroding. I don't know why the "suits" think this is such a mystery.  |  IP: Logged Terry Lynn-Stevens Phenomenal Film Handler Posts: 1081 From: Toronto, Ontario, Canada Registered: Dec 2012 posted 02-25-2015 12:50 PM                     I am little older than you think, I am probably closer to your age as a matter of fact. Anyways, admissions in 1987 were 1.09 billion whereas in 2013 they were 1.34 billion, there has been a decrease since 1998-2005 but people are still going to the movies, these numbers are according to NATO. There is just way more up front available seats and screens which kills longer runs.  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 02-25-2015 01:31 PM                        I would guess where the erosion shows up is when you take moviegoing frequency as it ties to the population. There are 80 million more people in this country now than in 1987. I haven't had time to look up the figures and do the math but that's just my guess.  |  IP: Logged Marcel Birgelen Film God Posts: 3357 From: Maastricht, Limburg, Netherlands Registered: Feb 2012 posted 02-25-2015 03:09 PM                     Also keep in mind that the number of movie screens in the US has seen a steady increase in the last 25 or so years. I guess it's interesting for the industry as a whole where this is heading. The "video window" will most likely only further erode away. It will be interesting what kind of impact this will have on the multiplexes around the globe. There has been an enormous building boom of multi- and megaplexes in the last 20 years. Most of them were constructed with utter minimalism in mind. As they are becoming technologically challenged and even outclassed by the average home cinema and are also slowly losing their monopoly on first run movies, it will be interesting what those big chains will do to keep them relevant. Personally, I still think there is plenty of market for movie theaters, as going to the movies is more than just watching a movie. It's also a social thing. But I'm not sure the future of the movie theater is an uninviting black box with a few rows of seats and something akin a white drywall in front of you.  |  IP: Logged Justin Hamaker Film God Posts: 2253 From: Lakeport, CA USA Registered: Jan 2004 posted 02-25-2015 03:52 PM                        The shrinking of the home video window is a relatively new thing. I started working in theatres in 1996. At that time it was still typical for a movie to take the better part of a year to show up on VHS. I think the rapid growth of DVD in the 2000's was the biggest factor in shortening the window - at least initially. If you stop to think about it, in 2000 the internet was still far from ubiquitous. Most people were still on dial-up connections and streaming options did not exist. Smart phones were still almost a decade away. And VHS was still the primary home viewing platform. All these other options which have been providing entertainment alternatives to the movie theatre have come to maturity and popular use within the last 5-10 years.  |  IP: Logged

All times are Central (GMT -6:00)

This topic comprises 2 pages: 1  2

Printer-friendly view of this topic

Hop To: Select a Forum: Category: Operations -------------------- Digital Cinema Forum Film Handlers' Forum Large Format Forum Ground Level Feature Info, Trailer Attachments & REAL Credit Offsets Category: Community -------------------- Film-Yak Film Handlers' Movie Reviews The Afterlife Bob Maar's Joke-A-Thon Category: Classified -------------------- Equipment and Supplies Wanted/For Sale Help Wanted/Seeking Employment Category: System -------------------- Software Beta Testing Forum

The Film-Tech Forums are designed for various members related to the cinema industry to express their opinions, viewpoints and testimonials on various products, services and events based upon speculation, personal knowledge and factual information through use, therefore all views represented here allow no liability upon the publishers of this web site and the owners of said views assume no liability for any ill will resulting from these postings. The posts made here are for educational as well as entertainment purposes and as such anyone viewing this portion of the website must accept these views as statements of the author of that opinion and agrees to release the authors from any and all liability.