How Big is the Markup on Movie Theater Food ?

[Hum]

Here are the markups for the biggest cinema staples:

Popcorn

    $8.15: The average cost* of a large bucket popcorn (with free refill)
    90?: The estimated cost of the raw goods needed to make it, per McKenzie?s research

That?s a markup of nearly 90 percent from kernel to consumption. Though for you bargain hunters with big appetites, if you get a refill, that margin drops to around 79 percent.

Soda

    $6.31: The average cost* of a large soda
    40?: The estimated cost of the raw syrup that goes into a 50.5 oz. large Coke.

Adding in the cost of cups (say from Costco, $.07 apiece), lids (half a cent each), straws (about a penny per), and soda water (about 2 cents a serving) it?d be more like 51 cents a cup. Tack on another 40 cents if the moviegoer gets a free refill, and it?s still an 86 percent markup.

Candy

    $4.25: The cost of plain M&Ms at AMC
    $2.08: The cost of plain M&Ms from Wal-Mart

All in all a (relative) bargain at a 51 percent markup.

Why is it so damned expensive? Well, it kind of has to be if you want movie theaters to exist. According to McKenzie, theater owners need these concessions profits to cover the dozens of hidden house costs ? employee wages, installation of snazzy sounds systems, energy bills, for example ? since most of the actual ticket money gets sent back up the ladder to the movie studios. ?If movie theaters didn?t make as much off concessions, they?d want to charge more for tickets,? says McKenzie. But raising ticket prices is complicated because movie studios ?put contractual controls on theaters in terms of prices they can charge.?

more

[Pam14160]

The price of entertainment. . . :woot: 

[McKay]

Don't Movie studios take such a big cut from ticket prices when the movie first launches, that the Cinemas would lose money? That then gradually reduces in cost. 

[Scorpian8867]

Don't Movie studios take such a big cut from ticket prices when the movie first launches, that the Cinemas would lose money? That then gradually reduces in cost. 

The percentage that the theater gets gradually increases over the weeks after a new movie is debuted. However, competition is fierce, and interest dies out fast. Most of the movies won't last long enough to turn over a decent enough profit from the ticket sales. They'll have to be dropped to make room for the newer releases--and therefore the lower cut of the revenue.

[Rohdekill]

One news station reported that popcorn is actually marked up 3000% than it costs the theaters to produce.  But since they only collect less than 10% of the ticket costs, it only makes sense they make their money somehow.

[Hum]

Local theaters have to pay a certain minimum to the Studios, for the right to even show the movie.

 

Many times, the entire ticket take goes to pay the cost of the movie.

 

The only profits the theater will make is from the concessions.

[Raa]

It's always been a rip. (N)

[blerk]

About this big:

|--------------------------------------------------------------------------------------------------------------------|

(Quite large)

 

I personally don't buy popcorn though at a movie theatre. Far too much salt for my liking. 

[Rippleman]

i used to think it was robbery, but... the costs behind the scenes (pun intended) are extreme, everyone has the power to not buy them. So if you do you do, if you don't you don't. I buy popcorn but sneak a popcan in :)

[Hum]

 

I personally don't buy popcorn though at a movie theatre. Far too much salt for my liking.

 

^ Agreed.

 

I'll sometimes eat a little something before going to a movie, so I am not even tempted to buy crap.

 

And I may have sneaked in a drink a time or two ... :whistle:

[+SOOPRcow MVC]

You're math is wrong. To get the percentage markup you want to take the final price and divide by the actual cost. Then subtract 1 from that number to get your markup percentage.

 

Popcorn:

(8.15 / 0.9) - 1 = 8.05 (805%)

 

Soda (syrup only):

(6.31 / 0.4) - 1 = 13.775 (1377.5%)

 

Candy:

(4.25 / 2.08) - 1 = 1.04 (104%)

 

 

Incidentally the article you link to is giving the correct numbers.

[COKid]

I simply bring my own food and drink. It doesn't take much imagination to conceal them when entering the theatre.

 

Oh, and the theatres are doing fine with their crazy pricing.

 

Case in point:

 

AMC Entertainment Holdings Inc. (AMC), the second-largest U.S. movie theater owner, said fourth-quarter profit soared, helped by a tax gain, in its first report since going public in December.

 

Net income rose to $279.6 million, or $3.62 a share, including the gain, from $373,000, or 1 cent, a year earlier, the Leawood, Kansas-based cinema operator said today in a statement. Results included a one-time gain of $3.40 a share. Excluding items, analysts predicted profit of 18 cents, the average of eight estimates compiled by Bloomberg.

 

http://www.bloomberg.com/news/2014-02-25/amc-entertainment-says-profit-rose-in-post-ipo-report.html

[coresx]

I just tend to not buy anything from the cinema and just go for a drink afterwards.

[FiB3R]

I sneak bottles of beer in, and do a little stealth vaping while I'm at it.

If I can't have my creature comforts (without being ripped off) then screw you, and your arse numbing seats, poor image quality and ###### walking past interrupting the film.

[Mr. Gibs]

Net income rose to $279.6 million, or $3.62 a share, including the gain, from $373,000, or 1 cent, a year earlier, the Leawood, Kansas-based cinema operator said today in a statement. Results included a one-time gain of $3.40 a share. Excluding items, analysts predicted profit of 18 cents, the average of eight estimates compiled by Bloomberg.

I want to say a lot of the money is now starting to come from things like 3D and IMAX. The technology required to display both of those aren't outrageously expensive compared to non 3d/imax projectors but yet the ticket prices are often 2-3x as much. A 3D movie here will easily cost you like $20.

And then on top of it you have all the ######ing utterly ripoff "convenience fees" yeah ok sure I'll gladly pay you an additional $1.50-$3 PER ticket just so that I can print out the ticket at home, using MY ink and MY paper. Its ridiculous. I love how in Hong Kong I can buy movie tickets online, select the seats that I want (yup every movie theater in HK allows you to reserve your own seat), print out the tickets at home / when I get there and sit in far better seats (some theaters have pretty comfortable armchairs) all for less than here.

And then on top of that you want to rip me off even more with Soda and Popcorn? No thanks. If your business is going bankrupt because of your ###### business model, it's your problem. Not mine.

[simplezz]

I loathe going to the cinema. Horrible seats, too loud (post film tinnitus), often noisy and distracting people present, can't pause for breaks, and worst of all, it's so damn expensive, not just for the tickets but for the snacks etc. If and when I do go, which is infrequent these days, I always take my own. The fact that they try and stop people bringing their own shows that it's their main source of revenue.

[TAZMINATOR]

That's the reason I stay home and watch movies streaming from my media box.  :D

[DirtyLarry Veteran]

I personally have no problem paying these prices knowing they are needed for the theaters to pretty much exists thanks to all of the other costs associated with running a theater. With that said I usually always bring something of my own as well, I am not stupid, but we always purchase a popcorn and small soda every time we go. I still personally love the experience of going to the theater. And I absolutely love movies. So it is what it is.

[Hum]

You're math is wrong. To get the percentage markup you want to take the final price and divide by the actual cost. Then subtract 1 from that number to get your markup percentage.

 

 

 

Incidentally the article you link to is giving the correct numbers.

Those are not 'my' figures.

 

Those were copied from the original article, which someone later corrected -- observe end of article:

 

 

UPDATE: This post's math has been corrected since its original publication

[Nashy]

Yesterday I paid $9.50 (AUD) for a medium popcorn and a 500mL bottle of water at the movies.  Ridiculous.

[Xilo]

I don't think the article author knows how math works...

[DoctorD]

This is amusing that I just got home from a drive in theater (cost $16) and had a $4 large popcorn and $2 soda.  On a side note watching the movie in the comfort of my Lincoln with the seats reclined listening through my cars THX sound system was something I will do again soon.

[Skyfrog]

I loathe going to the cinema. Horrible seats, too loud (post film tinnitus), often noisy and distracting people present, can't pause for breaks, and worst of all, it's so damn expensive, not just for the tickets but for the snacks etc. If and when I do go, which is infrequent these days, I always take my own. The fact that they try and stop people bringing their own shows that it's their main source of revenue.

 

That is the number one reason I stopped going to theaters. The last movie I went to years ago was so loud it was actually painful to me; the volume they use these days is way too loud. I love watching a good movie but I'm much more fond of my hearing. Besides, with the HDTVs we have now I'd rather watch them in the peace and comfort of my own home (and I can get all the snacks I want from my kitchen without paying a fortune).