Why Does Popcorn Cost So Much at the Movies?
Movie theaters are notorious for charging consumers top dollar for concession items such as popcorn, soda, and candy. Are moviegoers just being gouged?
New research from Stanford and the University of California, Santa Cruz, suggests that there is a method to theaters’ madness — and one that in fact benefits the viewing public. By charging high prices on concessions, exhibition houses are able to keep ticket prices lower, which allows more people to enjoy the silver-screen experience.
The findings empirically answer the age-old question of whether it’s better to charge more for a primary product (in this case, the movie ticket) or a secondary product (the popcorn). Putting the premium on the “frill” items, it turns out, indeed opens up the possibility for price-sensitive people to see films. That means more customers coming to theaters in general, and a nice profit from those who are willing to fork it over for the Gummy Bears.
Indeed, movie exhibition houses rely on concession sales to keep their businesses viable. Although concessions account for only about 20 percent of gross revenues, they represent some 40 percent of theaters’ profits. That’s because while ticket revenues must be shared with movie distributors, 100 percent of concessions go straight into an exhibitor’s coffers. Article…
Doug
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Reader Comments (8)
The study has to have been conducted by the theater industry. They rape us on the food items in order to hold down the price of admission? They are doing us a favor? What bull! Theater prices go up about every 6 months. But so do food prices. I don't begrudge anyone making a fair profit, but the public has as is being raped on prices by the sports and entertainment industries because everyone involved wants to be mega-millionaires. Look at the freaking salaries being paid actors and athletes and the teams and studios. Are we being gouged?
The same ridiculous logic applies to sports events and concerts. They "have to" rape us for a beer and a dog in order to keep the price of a ticket to see a b-ball game down to $250. Give me a break!
I have a really big purse and (don't tell anyone) we take our own drinks and candies and sometimes even caramel popcorn. If we paid movie prices for food, we couldn't afford to see as many movies!
I do that sometimes too. I think a lot of people do. No way I will pay $10 for popcorn and a pop or $4 for a 99 cent candy.
Jarrod is right, the movie theaters are just like the sports people. They want us to believe they are doing us a favor by gouging us for food. What a load!!
For us to see a movie it costs about $35, not really that expensive when you compare it to other entertainment venues. And I don't have to pay for parking, so it's a pretty cheap date. Besides, my wife would never carry one of those big purses. :)
I'm sorry, but paying $15 for candy, soda and popcorn you could buy for $4-$5 is throwing money away. Two cans of soda (or water bottles) and a couple bags of candy doesn't take a big purse! Just leave a lot of other things at home.
They can charge that much because we will pay it. Simple business economics.
I really never gave it too much thought but we are getting ripped off. The purse idea sounds like a good one. But if theater employees see you drinking from a pop can, will they hassle you? And if they start fonding too many cans and wrappers on the floor after a movie, will they start frisking us on the way in? Or worse, have us arrested by some 18 year old "movie patrol"?
Kramer is right, it is simple business economics: Whatever the traffic will bear.