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This topic comprises 5 pages: 1 2 3 4 5
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Author
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Topic: Movie theatre sued over high snack prices
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Justin Hamaker
Film God
Posts: 2253
From: Lakeport, CA USA
Registered: Jan 2004
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posted 03-07-2012 10:26 PM
Mike Frese: You are missing the basic accounting of product mark-up. I will use Red Vines as an example. Our cost on a package of Red Vines is in the ballpark of $1.20. We sell the package for $3.00. That additional $1.80 isn't simply mark-up or "profit". That $1.80 includes a share of the cost for electricity, labor, insurance, rent/mortgage, equipment, taxes, and so forth. Although I don't do the bookkeeping, I'm guessing we are able luck if $0.10 of that $1.80 mark-up goes to "profit".
The reason the grocery store is able to sell that same box of Red Vines for $1.00 is because two fold. First, they almost certain receive a better price because of their overall volume. Secondly, because the grocery store sells significantly more items than the theatre, they can apply a smaller share of total costs to each item.
I don't know the ratios, but I would not be surprised if a grocery store sells several thousand times more items than a theatre. That means that some box of Red Vines only needs to have a few cents of cost above and beyond what the store pays for the actual item.
The simple fact is a movie theatre - like a ball park or an amusement park, has a completely different cost structure than a grocery store. For this reason, it is invalid to compare the price of an item at a theatre with a comparable item at a grocery store.
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Steve Guttag
We forgot the crackers Gromit!!!
Posts: 12814
From: Annapolis, MD
Registered: Dec 1999
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posted 03-08-2012 03:07 AM
Sorry Mike B...I'll keep toting out my minor-league baseball comparison...it is LIVE professional entertainment of approximately 3-hours in duration (movies being recorded entertainment). The average admission price to such a venue is notably less than for a typical movie theatre. $100/outing to a movie theatre is too high because it overly restricts the amount of times a person/group can afford to go out to the movies. At that price level, people tend to choose what movies are worth seeing in the theatre.
Like it our not, the perception of going out to the movies has, by and large, moved from a cheap experience to one of such cost that people have become quite selective and it is hurting us in attendance. It is tough to meter though since the quality of the product plays heavily into this (as do these stupidly short release windows to home markets).
I know I go to movies far less than I used to, if for no other reason, due to cost. I never used to find that movies were expensive entertainment...now they really feel like they are.
And yes, one can not compare an amusement park like Disney to a movie theatre...for if one were to really want to go to such a park at the frequency we would all like to see people going to theatres, they would be on the "annual pass" plan and the cost/day even at Disney would be less than the cost for seeing a movie (though to get to that level one would really need to a very frequent visitor). From personal experience...Due to ShowEast's prior location and the fact that they would have it in Mid-October one year and late October the next year...our family would get an annual pass such that it would just cover us for two years (buy it on the "late October ShowEast year", use it the following year on the mid-October ShowEast year). Not taking into account our substantial discounts on hotels at that point (I would stay at ShowEast in Disney for about $65-$70/night...far less than ShowEaster's were paying in the over priced Mariott)...cost for park entrance came to less than $25/day.
BTW I read the law as it was posted that a movie theatre pricing of concessions would need to be compared to similar venues like other movie theatres or other entertainment venues...not to grocery stores. I don't think they are going to win this one. As others have said, you are not compelled to buy any food when going to a movie theatre.
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Mike Blakesley
Film God
Posts: 12767
From: Forsyth, Montana
Registered: Jun 99
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posted 03-08-2012 09:31 AM
quote: Mike Frese
You are not in the class of theaters people are complaining about. Large corn and large soda for $5.75 right? Why do not you raise your prices to what the bigger chains charge? A family of 4 can get quite a bit of snacks and tickets for less than $50 at your theater. And I bet you admissions have gone UP year after year.
Mike, the reason we don't charge such high prices is because we don't need to. I don't have a multimillion dollar building to pay for. I don't have 24 shiny new projectors. I've only got two employees at a time to cover, not a dozen or more. I don't have to pay mall rent. I don't have a parking lot to maintain. I'm not paying big-city advertising prices. Etc. Etc. Etc. But if I DID have all those things, our prices would be right up there with the majors because that's what it costs to run a cinema these days.
Steve -- Minor-league sports are definitely cheaper than major league, I'll give you that. But: Not everybody likes sports, whereas almost everyone can find a movie they like in a good multiplex; you only have one game to choose from, not 12 or 24 options like in a cinema; the seats are likely crappy and you have miniscule amounts of space to move around in at a sports venue. But even so, the concessions are just as high-priced as at a cinema.
quote: Tony Bandiera Jr
if you want to talk about outrageous costs..anyone look at how much a day at Disney, etc. costs these days?
Disney isn't outrageous at all. It costs about $80 to get in, true. But you can stay all day and ride as much as you can for that price, plus see all the street entertainment and "soak up the atmosphere." They spend hundreds of millions of dollars on each new attraction and they are constantly updating and renewing their facilities. Even the shortest day at a Disney park is 8 hours, and can run up to 12 or 16 hours if you hit it right....that's $5 to $10 per hour of entertainment. How is that outrageous?
Perception is the key, again.
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Edward Havens
Jedi Master Film Handler
Posts: 614
From: Los Angeles, CA
Registered: Mar 2008
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posted 03-08-2012 11:22 AM
Mike, you are confused about a lot of things.
Ticket sales have not slowed because of the cost of the snacks at the concession stand. Ticket sales have slowed because people have far more options for entertainment today than they did ten years ago, they have far more options in getting said entertainment, and they have to wait less time than they did, both in terms of connectivity speed and in the amount of time between theatrical release and VOD/DVD/Blu-Ray release.
In 2002, most homes did not have the PS3s and XBox 360s and iPhones and iPads and Droids they have today, able to show 1080p video product streamed through Netflix or Blockbuster Online at multi-megabytes per second download speeds, or able to play complex games with photo-realistic worlds and near-human looking characters. The release windows for movies were averaging 5 months and 19 days ten years ago, not 4 months and 12 days, like it is now.
And it certainly isn't because of the ticket prices. In 1967, the year I was born, the average US ticket price was $1.22, according to the same NATO source you yourself used. Using an inflation calculator, that adjusts to $7.88 in 2010 dollars. And do you know what the average ticket price was in 2010? Why, it was $7.89!
As we've learned many times in our lives, perception is reality to many... even if the perception is dead wrong. A family of four can go to a movie at their local theatre for less than the cost of a single ticket to a major league sporting event. Most theatres don't charge $15-20 for parking, like they do at major league sporting events, and the food at the sporting event is often more expensive than movie theatre food, for the same sizes. But most people don't bitch that much about the costs associated with major league sporting events, because those who go to major league sporting events only go once or twice a year, while those who do go to the movies often go at least once or twice a month.
But to get back on track, there is one thing this frivolous lawsuit ignores: the lack of common sense and the lack of personal choice. There is no two-item concession purchase minimum at a theatre, the way there may be at a Vegas or Atlantic City nightclub show. If you don't like the pricing, you are free to choose to not buy anything. And that's why the suit will be tossed.
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