December 21, 2010

How do cinemas make money

Have you wondered how cinema operators make their money?

Cinemas have 3 major sources of revenue: the movie tickets, the concessions, and the onscreen advertisements.


Tickets
When you pay $10 for your ticket, who gets that money? Basically most of the money goes back to the movie studio. The movie studio leases the movie to a cinema for a set period of time. In the first couple of weeks of the movie opening, the cinema only gets to keep about 20–25% of the collection. The percentage decreases on each week that a movie is in the cinema. If the screening was arranged by an independent distrbutor, he also takes a slice.

Concessions
Everybody buys snacks at the concession stand. Without the concession stands, cinemas could not stay in business. For a $5 popcorn that they sell, the cost is only 50 cents. A $3 Coke costs only 10 cents to the cinema. Imagine the amount of money they make from the other snacks.

Onscreen Advertisements
Sometimes studios also pay cinemas to show trailers. Advertisements that play before the main movie also make money for the cinemas. Advertisers will pay the cinemas to screen their ads. If the movie is a blockbuster, the cinema might charge higher.

Costs
The costs of running a cinema include the price of leasing the building (or floor space), equipment and maintenance, the cost of leasing the actual films, and the cost of paying their employees.

For more info, here's an interesting article on The Cost of Going To The Movies.

7 comments:

Anonymous said...

Thanks for taking the time to debate this, I feel strongly about it and love studying more on this topic. If potential, as you gain expertise, would you thoughts updating your weblog with additional information? This can be very useful for me.

Anonymous said...

Hello clever points.. now why didn't i think of those? Off topic barely, is that this web page pattern merely from an ordinary set up or else do you use a custom-made template. I exploit a webpage i’m looking for to enhance and properly the visuals is probably going one of the key things to complete on my list.

The MovieBuff said...

hi anonymous, my blog template is the std one provided by blogger.

Anonymous said...

You’d believe together with the multi gazillion cash of investment that wikipedia could acquire some much more servers.

Anonymous said...

I really liked the article, and the very cool blog

Malay Mehta said...

Nice article..thanx 4 d info.

Malay Mehta said...

Nice article..thanx 4 d info.