The rising costs of movie tickets and concession items have many staying at home rather than attending movies at theaters. A survey conducted by the American Association of Retired People show that 40% of seniors no longer attend films because they can no longer afford the prices. When fewer tickets are sold, it tends to cause some panic to movie executives, who earn most of the profits from their sale. Fewer people going to films, and increasing expense of making films, both contribute to higher prices for admission.
The average price for a movie ticket in 2012 is $8.12 US dollars (USD). Popcorn costs about $6 USD, and a drink, about $4 USD. Thus, the average expense at a theater is nearly $20 USD. For a family of four, that’s close to $80 USD for two hours of entertainment.
Consumers can buy a DVD player for approximately $40 USD or less and a DVD rental for as little as $1.50 USD. Popcorn and soda for a family costs about $10 USD when bought at a supermarket or convenience store. That’s $54 USD for a family movie night at home, plus there’s not charge for gas or parking. Since the family now owns the DVD player, the next movie night may cost about $14 USD. Blu-ray™ player prices have dropped as well, to less than $100 USD for some models.
The expense of concession stands has much to do with the way in which movie studios are reimbursed by local theaters. In the first week of a film’s release, the studio may make as much as 90% of the revenue from sales of movie tickets. So while admission is high, it doesn’t benefit the theater tremendously. Each subsequent week, the film brings greater revenue to the theater, so when a consumer goes to see a second run film, he or she is usually giving more money to the theater and less to the studio.
Many people question whether the studios need to charge so much. Some of the best films are made on fairly low budgets, and not all high budget films are huge hits. In general, a studio makes up for its losses on high budget films by earning higher returns than expected on low budget films.
While actors make a great deal of money, they are not the only reason for high cost of movie tickets. Movie goers who take the time to read the end credits of a film will see the huge numbers of people employed by large productions, from gaffers, to film assistants, to animators, to casting assistants, to art or set designers. Many of these people work in unions that set specific prices for the job they do. This means that budgets for films that require a large number of employees are typically going to be very expensive.
This does not mean, of course, that studios don’t turn a profit, and the largest studios do make a great deal of money. Since people are seeing fewer films in the theater, however, ticket prices often reflect the increasing gamble studios take when producing a high budget film.
Many people in the US simply can’t keep up with prices of movie tickets, however. A 16-year-old making minimum wage must work nearly four hours to afford to see a film and buy something at the concession stand. Admission to a movie for a poorer family might be 10% of that family’s weekly income. To an increasing number of people, the cost of seeing the film in a theater is too high to pay for entertainment, especially when film rental is significantly less expensive.
It is a matter of speculation as to whether theater owners and studios will catch on and drop prices, but most experts find it to be unlikely. Most people now budget deliberately and stick to matinee performances, or go on “cheap nights.” Popular films usually aren’t included in these discount nights unless they have been running for several months, however.