Movie theaters have three basic sources of income – tickets, snacks and drinks, and advertisements. Tickets usually don’t cost much, even if the screening is a premiere or a pre-premiere. Cinemas have been a lucrative industry for decades upon decades. Have you ever wondered what keeps them ticking over and how they come by their income?
Movie theatres have three basic sources of income – tickets, snacks and drinks, and advertisements. Tickets usually don’t cost much, even if the screening is a première or a pre-première. During the first week of a new movie’s screening, the cinema will get around 25 % percent of income and the percentage will decrease afterwards. With cinema operators charging around $10-$20 for a ticket, the industry would collapse and shut down in no time if this were their own source of income. On-screen advertisements also benefit the movie theatres, because studios pay for trailers. Advertisers might be charged more for screening ads if the movie is a blockbuster. However, that payment still can’t run a whole cinema.
The third and most efficient way to receive a huge income is through concessions, because everyone buys drinks and snacks at the cinema. The movie theaters charge high prices for their products and don’t allow customers to bring their own snacks in. Overall, cinemas make more money from the snacks than from the tickets.