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Filmmakers love underdog stories - tales of the little guy who won a big fight against all odds.

One moviegoer in Detroit, who is taking on a giant movie theatre chain, is hoping life will imitate art.

According to the Detroit Free Press, Joshua Thompson has filed a class action lawsuit against his local AMC theatre in hopes of forcing the chain to lower its snack prices.

"It's hard to justify prices that are three- and four-times higher than anywhere else," Thompson's lawyer Kerry Morgan told the paper.

Thompson used to bring his own pop and candy to the theatre before AMC forbid outside food and drink. He was vexed when he was charged $8 US to buy a Coke and Goobers chocolate-covered peanuts at the theatre - items he could buy at a nearby store for $2.73.

For him, the price difference is simply unjustifiable. His suit argues that the theatre chain violates the Michigan Consumer Protection Act because by charging too much for snacks.

Thompson is seeking refunds for customers who were overcharged and any other civil penalties that the judge is willing to grant.

Consumer experts predict the case will be dismissed.

Do cinema snack stand prices trouble you? Do you think this suit stands a chance? What do you think is a reasonable price to spend on a night at the movies?

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Joshua Thompson loves the movies.

But he hates the prices theaters charge for concessions like pop and candy.

This week, the 20-something security technician from Livonia decided to do something about it: He filed a class action in Wayne County Circuit Court against his local AMC theater in hopes of forcing theaters statewide to dial down snack prices.

"He got tired of being taken advantage of," said Thompson's lawyer, Kerry Morgan of Wyandotte. "It's hard to justify prices that are three- and four-times higher than anywhere else."

American Multi Cinema, which operates the AMC theater in Livonia, wouldn't comment on the suit. A staffer at the National Association of Theatre Owners in Washington, D.C., angrily hung up the phone when asked about industry snack pricing practices.

Although consumer experts predicted that the case will be dismissed, it struck a chord Friday with area moviegoers, who said they're tired of being soaked on movie munchies.

"The prices are ridiculous," Rebecca Motley, 55, a self-employed Southfield physician, said while leaving the AMC Star Southfield 20.

Motley said she and her office manager spent $5 each for morning movie tickets and $11 each for soft drinks and popcorn.

"When I was a kid, $1 could get you into the movies and buy you a pop and popcorn. But not anymore," Motley said. "I don't know how kids can go on their own to a movie anymore."

Timothy Fells, 29, part owner of a Redford Township gym, agreed with Motley.

"Movie concession prices are extremely high, and that's why I don't stop at the snack bar very often," he said while leaving the AMC theater in Southfield.

Thompson didn't want to be interviewed because he doesn't want any notoriety, Morgan said. But Thompson said in his lawsuit that he used to take his own pop and candy to the AMC in Livonia until the theater posted a sign banning the practice.

On Dec. 26, he paid $8 for a Coke and a package of Goobers chocolate-covered peanuts at the Livonia theater -- nearly three times the $2.73 he paid for the same items at a nearby fast-food restaurant and drug store, the suit said.

The suit accused AMC theaters of violating the Michigan Consumer Protection Act by charging grossly excessive prices for snacks.

The suit seeks refunds for customers who were overcharged, a civil penalty against the theater chain and any other relief Judge Kathleen Macdonald might grant.

Two consumer lawyers predicted that Macdonald will dismiss the suit.

"It's a loser," said Gary Victor, an Eastern Michigan University business law professor. He said state Supreme Court decisions in 1999 and 2007 exempted most regulated businesses from the Michigan Consumer Protection Act.

Added Ian Lyngklip, a nationally known consumer lawyer in Southfield: "Movie theaters are regulated, so the lawsuit won't go anywhere"

Victor, an avid moviegoer, agreed that snack prices are excessive at theaters. That's why he shuns the concession counter unless he's with a date.

Griping about excessive prices at the theater concession is a time-honored tradition, says Paul Dergarabedian, an analyst for www.hollywood.com , a movie industry website.

"But like high airline prices, it's just one of those things that we've become accustomed to because we don't have any control over it," he added.

Although movie ticket sales are down -- 1.2 billion tickets were sold last year compared with 1.6 billion in 2002 -- he said a difficult economy mainly is to blame, not snack prices.

To cope with the issue, some consumers eat before or after they go to the movies, or resort to smuggling.

Fells said he sometimes smuggles Gummi Bears into the theater to save money.

Kristy Belanger, 20, a real estate secretary from Redford Township who showed up at the AMC in Livonia on Friday to see a movie with her boyfriend, concealed two bottles of Pepsi in her purse.

"I did it to save money, and I feel like I did," she said, adding that what she saved on Pepsi enabled her to buy a $4.74 serving of nachos to share with her beau.

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quote: Mike Heenan

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Maybe I missed it, but I didn't see anything in the article stating the reason for high concession prices, which we all know is due to the fact theaters don't make much money off of the films themselves.

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quote: Mark Lensenmayer

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No one has a right to a particular price. The only right the customer has at the concession stand regarding price is to purchase or not. This should get thrown out very quickly.

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quote: Bill Gabel

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In the Hollywood Reporter article it quoted that movie theatres make $3000 on every bag of raw popcorn that costs them $30.00.

Hollywood Reporter

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quote: Chris Slycord

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The law he's suing under, though, specifies that it is illegal to sell a product or service for grossly more than is available elsewhere.

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quote: David Buckley

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And what if the aforementioned Judge Macdonald decides she's had enough of conession prices too, and finds for the plaintiff?

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quote: David Buckley

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I think the various theare representatives have been really dumb refusing to comment and/or hanging up the phone

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Charging the consumer a price that is grossly in excess of the price at which similar property or services are sold.

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The trick is, "grossly in excess." Other movie theaters sell at these prices as well as do sporting venues, etc. If the law could be used in that fashion, one could argue that Del Frisco's steakhouse was overcharging for a $50 filet when one can get a similar steak for $15 at Outback.

What this is designed to prevent? A towing company picking up your car from a no-parking zone and wanting to charge $3,000 for the tow for you to recover it when every other towing company would charge $250. A taxi driver trying to charge you $250 for a ride to the airport. It's designed to protect consumers from getting gouged in situations where an unscrupulous service provider might have them 'hostage'.
 

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Posted by Louis Bornwasser (Member # 3063) on 03-06-2012, 09:10 PM:
 
It is possible that Michigan law is somehow different.
 

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Posted by Mike Blakesley (Member # 26) on 03-06-2012, 10:07 PM:
 
Our local TV station has put this same story on their website and of course, asking readers for comments which unleashes the usual barrage of people bitching about cinema prices and it's too expensive to go to the movies. (Which they are typing on their $400 phones, no doubt.)

I don't understand why the cinema industry gets dumped on by the media for its prices. Where is the furor over HP charging $3500 a gallon for ink, for example?
 

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Posted by Frank Cox (Member # 6258) on 03-06-2012, 10:28 PM:
 
Theatres are a target for many things due to their visibility.

Same reason why a gas station can have a rack of DVD's for rent in the back and nobody cares if he's renting a restricted movie to a 12-year-old, but the balloon goes up if the same 12-year-old manages to watch the same movie in a theatre.
 

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Posted by Justin Hamaker (Member # 2165) on 03-06-2012, 10:44 PM:
 
I really would like to see one of these major news show - 60 Minutes, Rock Center, etc - do a report on theatre prices. I would like to see them explore the accounting on concession prices, as well as how today's prices compare historically along with wages. Most people would be absolutely shocked to see the results.
 

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Posted by Scott Norwood (Member # 30) on 03-07-2012, 12:24 PM:
 
I'm surprised that no one has posted this:

Michigan Consumer Protection Act

Section 445.903 (z) appears to be relevant here: "Charging the consumer a price that is grossly in excess of the price at which similar property or services are sold."

I don't really see why this should be illegal, but it apparently is in Michigan.

In any case, the relevant comparison should be the prices charged for snack items at other out-of-home entertainment venues (baseball parks, carnivals, etc.), not the price that 7-Eleven charges for the same snacks. If one made that comparison, it would probably turn out that movie theatre prices are in line with (or possibly slightly cheaper than) the prices at other entertainment facilities.
 

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Posted by Chris Slycord (Member # 4239) on 03-07-2012, 01:06 PM:
 
That is, if you consider myself and Jeff to be "no one" (granted, I paraphrased it; he quoted it).

And as he pointed out, it's to make it a crime to do "price gouging." Like you call for a locksmith to their house and he charges $1000 because they know you're desperate when anyone else would charge ~10X less than that.
 

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Posted by Mike Frese (Member # 4361) on 03-07-2012, 06:43 PM:
 

quote: Mike Heenan

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Maybe I missed it, but I didn't see anything in the article stating the reason for high concession prices, which we all know is due to the fact theaters don't make much money off of the films themselves.

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quote: Mike Frese

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This is an absolute lie. AMC in their most recent SEC filings show a film exhibition cost of 53-54%. Which inline with what other operators pay. Karma????

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quote: Mike Frese
This is an absolute lie. AMC in their most recent SEC filings show a film exhibition cost of 53-54%. Which inline with what other operators pay. Karma????
Not exactly. From my calculation, it seems the 53% you're coming to is looking at it as if "making money from the movie" is "making a profit when you ignore all costs that aren't film rental.

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quote: Mike Frese

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This is an absolute lie. AMC in their most recent SEC filings show a film exhibition cost of 53-54%. Which inline with what other operators pay. Karma????

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quote: Scott Norwood

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Section 445.903 (z) appears to be relevant here: "Charging the consumer a price that is grossly in excess of the price at which similar property or services are sold."

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Not that it is directly relevant right here, but several countries outside of the US have similar laws to protect customers from abusive overpricing. Yet, most of those laws will only come into effect if there is some form of pressure involved and nobody forces you to buy a bag of popcorn at $5.

But I guess, in many cases, concessions are really way overpriced, especially considering the price of movie tickets in general. Customers do not know anything about the underlying economics and you cannot blame them.

So, customers are essentially right when they're starting to complain. Going to a movie with your family shouldn't be something that will set you back like $100.

I remember something like a small revolt in Belgium a few years back. The largest national cinema chain (Kinepolis Group) got quite some exposure in the local press after they raised prices to a certain breaking point. It all started as a rant on a Facebook page, but ended with the CEO personally offering apologies.

But, in the end, nothing really happened, prices didn't go down.
 

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Posted by Chris Slycord (Member # 4239) on 03-07-2012, 08:10 PM:
 

quote: Mike Frese

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Chris,
It has been a common practice to let the idea that the studios get all of the ticket money perpetuate. Of course there are other costs associated with operating a theater. But that is not what people are talking about.

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quote: Justin Hamaker

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I'm extremely irritated that the article doesn't even talk about the economics of running a movie theatre. Anyone who understands accounting would understand that the price of snacks at a movie theatre has far more associated costs than the cost of the raw ingredients.

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quote: Marcel Birgelen

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I didn't look at any SEC filing myself, but either the numbers are being misinterpreted or AMC has far better agreements than many other exhibitors.

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quote: Marcel Birgelen

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Going to a movie with your family shouldn't be something that will set you back like $100.

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quote: Chris Slycord

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But that *is" what people are talking about here inside this forum.

Or did you miss the post directly after the one you initially quoted?

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quote: Mike Blakesly

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Our local TV station has put this same story on their website and of course, asking readers for comments which unleashes the usual barrage of people bitching about cinema prices and it's too expensive to go to the movies. (Which they are typing on their $400 phones, no doubt.)

I don't understand why the cinema industry gets dumped on by the media for its prices.Where is the furor over HP charging $3500 a gallon for ink, for example?

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let alone the high price of razor blades for some of us who shave every day.

in regards to the douche... er I mean Joshua Thompson, why complain about the concession prices, when he can eat BEFORE going out to the movies and not have the appetite to indulge - it's not like someone is pointing a gun to his head to buy popcorn and/or a soda.
 

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Posted by Justin Hamaker (Member # 2165) on 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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Posted by Tony Bandiera Jr (Member # 2365) on 03-07-2012, 10:46 PM:
 
Justin hit it spot-on and the grocery store analogy is a good one.

I was once told that a grocery store's "profit" is in the range of only 2-3%, and the reason it's hasn't spelled disaster is that is precisely because of volume.

When I worked for one of the indie chains here in LA as a manager, a lot of our customers oddly enough thought our concessions price was reasonable (and we were very close to the major chains in pricing). I think, like others have said, it is a perception issue.

Our chain was known for a variety of film programming and very high projection standards. In the rare times we had projection or sound issues people were pretty calm and never "hooted" or "booed".

Now if you look at how bad the presentation and customer service standards are of most chains (AMC are you listening? Oh wait...you don't care) is it any wonder that the customers are gonna bitch about concession prices?

It IS all about perception..if you provide exceptional customer service, excellent presentation and clean auditoria, then the customers won't mind the prices as they will feel the money was well spent.

And if you want to talk about outrageous costs..anyone look at how much a day at Disney, etc. costs these days?
 

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Posted by Chris Slycord (Member # 4239) on 03-07-2012, 11:27 PM:
 

quote: Mike Frese

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If you read the articles and the comments of the people, you will see the claim that we do not make any money or very little off of the tickets sold. And that is why theaters have to charge such high prices for concessions. The public thinks that. The industry has used a lie to justify high concession prices.

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quote: Mike Frese

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If you read the comments from the over 250 news articles on this story online, you will see that the majority think we charge too much. Most also think it is okay to "sneak" their own drinks and snacks in.

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quote: Mike Frese

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Actual economics? Like letting the cat out of the bag that the average first-run theater gets to keep approx. 45% of the ticket price? Not 10% or less?

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quote: Mike Frese

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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.

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quote: Tony Bandiera Jr

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if you want to talk about outrageous costs..anyone look at how much a day at Disney, etc. costs these days?

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quote: Edward Havens

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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.

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quote: Mike Blakesley

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Even the shortest day at a Disney park is 8 hours

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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

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quote: Joe Redifer

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Unless you stay the hours you indicated, it costs CRAZY more than $10 per hour of entertainment. And at $80 per person it gets insane if you go as a family. "Hey, let's go spend $1,000 at DisneyLand!" You'd have to be criminally insane to do that.

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quote: Joe Redifer

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Your phrasing seems dedicated to the purchaser of the entry fee:

quote: Mike Blakesley

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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

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Unless you stay the hours you indicated, it costs CRAZY more than $10 per hour of entertainment. And at $80 per person it gets insane if you go as a family. "Hey, let's go spend $1,000 at DisneyLand!" You'd have to be criminally insane to do that.

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LOL Joe I think Mike posted that because he's pissed off at me over the Oscar's thread.

Seriously though, Mike, the point is like Joe pointed out that a family will EASILY spend over a grand for that day of entertainment, especially when you add in FOOD and DRINKS, which are also expensive at Disney (but in most cases the food IS good to be honest.)

So your $5-$10 per hour becomes closer to $80-$100 per hour.

BUT, it is all about perceived value, right? So in that light, even the money a family spends for a day at Disney might not be all that bad. And with the attendance they have, I don't think there are that many criminally insane folks out there.....or if they are all insane we are in big trouble.

Last time I was at Disneyland the admission was only $40 and I felt it was a good value. I am hard pressed to justify spending the current fee to go there though.
 

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Posted by Edward Havens (Member # 4715) on 03-08-2012, 03:01 PM:
 
As a child living in Los Angeles in the 1970s, we used to go to Disneyland at least once a month. $5.95 for adults and $4.95 for kids got you in to the park, plus 1 A ticket, 2 B tickets, 3 C tickets, 4 D tickets and 5 E tickets. Parking was a couple bucks. And if you didn't use some of your tickets this time, you could bring them with you the next time and use them then. But then they switched to a single entry ticket thirty years ago. Now, Disneyland is $80 for adults and $74 for kids, and parking is $15. I've been there twice in the past fifteen years, and I don't plan on going back for a very long time, because that's just too damn expensive.
 

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Posted by Bill Gabel (Member # 1105) on 03-08-2012, 04:18 PM:
 
After they switched over to the single entry ticket format. They had a special discount that ran in the 80's-90's for Southern California residents living in zip codes of 90000-96199. The admission was $20.00 . They now have the discount on their SoCal & SoCal Select Annual Passes which gives you 10% off admission and 20% off Tours and 10-15% off at select Restaurants in the park.
Over at Universal Studios they still had the "Ask for Babs" discount running up until about 10 years ago.
 

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Posted by Mike Blakesley (Member # 26) on 03-08-2012, 07:20 PM:
 
You guys just don't get it, do ya. Disney has the same problem with you that the theater industry has with the general public. To wit: It costs way more these days to build a theme park attraction that will draw hordes of people...Disney is spending over a BILLION dollars on Fantasyland at the Magic Kingdom in Florida, and I think they've spent TWO BILLION re-making the California Adventure park. There aren't enough people going there to make it work for less than they charge. The same holds true for the theater industry.

quote: Tony Bandiera Jr

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So your $5-$10 per hour becomes closer to $80-$100 per hour.

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quote: Justin Hamaker

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Jim: The one thing I get annoyed with is when people refer to the most expensive options and then dismiss a movie as too expensive.

Here's what I mean using my theatre's prices:
4 x 2D matinee = $28.00

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quote: Mandy Crisbe

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Indeed, this is a serious problem especially to avid movie goers. There are few things on earth that individuals whine about more than movie theater concession costs. There is little one can do about them, though, because without high concession costs, theaters wouldn’t be able to keep their doors open. Article Source: Good reason exists for movie theater concession prices

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quote: Edward Havens

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14m visitors a year to Disneyland (not counting California Adventure), at roughly $70 per ticket, taking in to account discounted and multi-day and/or multi-park passes, and you're talking $980,000,000 per year solely on admissions, on land that was purchased dirt cheap sixty plus years ago, housing buildings that mostly date back thirty plus years, with upgrades done every twenty years or so.

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quote: Justin Hamaker

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Jim, just to be clear, that post wasn't intended to be a jab at you.

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Ain't civil discourse great?
 

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Posted by Geena Phillips (Member # 3726) on 08-12-2012, 01:04 AM:
 
Fellas, fellas... try to remember the most important fact about this story: It's Detroit. The news is either this, or "Seventeen City Officials Dead In Drive-By Crack Deal Gone Wrong."

I mean, the guy is probably just misinterpreting the scale of the economics involved, as the price for a large popcorn, drink and candy in a multiplex is roughly how much you can buy a house for in Detroit these days.
 

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