Here is a transcript of the video.
Narrator: I just saw the new “Spider-Man. ” The price was $12, my popcorn $8, the candy $4. 50 and my soda $6. That’s more than $30 for a single person. Movie theaters are like theme parks or carnivals. Once inside, you respect its rules. And if you’re like me, you’re spending a lot more than anticipated. AMC doesn’t sell you a ticket with the price of a movie. They sell you this food. .
You can’t get in here without spending money. It all starts with the ticket. You might have heard that movie-ticket prices keep climbing, averaging over $9 nationwide, and almost twice that in big cities. Going to see a movie means you have to spend at least the cost of admission. But if you think that money is going to the theater, you’re wrong. Chains like Regal and AMC keep only about 50% of the money they take from ticket sales each year. The bulk of that ticket price goes back to the distributor. And if you want to see a higher-quality format, you have to pay a huge premium. But it doesn’t really matter how much your ticket costs, because if you’re going to a movie theater, chances are you’re buying some food. AMC reports that more than 71% of attendees purchase something at concessions.
Kim Moon: If they didn’t have concessions, they wouldn’t be in business.
Narrator: This is Kim Moon. She is a marketing instructor at the University of Illinois at Chicago. And he is right. Without franchise sales, AMC and Regal would turn a profit.
Moon: So when you walk into a movie theater, you see tons and tons of pictures similar to food and drinks.
Narrator: Most movie theaters are designed so that you have to walk past the dealership counter. The films themselves are hidden in long, dark hallways. But once you enter the theater, the food is bright, colorful and, thanks to the demonstration cases, visual from each and every angle. You can see popcorn popping, piles of candy, and giant soda machines.
Kit Yarrow: The big, huge boxes serve as a billboard effect. They are huge and appeal to you more than a box the size. However, when you open it, there is about the same amount of candy as a small box you can find at the drugstore.
Narrator: Everything is surrounded by television screens that loop beautiful soda and popcorn shots. The food catches your eye. Unlike a restaurant, where food is prepared out of sight, a movie theater prepares everything in front of you.
Yarrow: By taking over the area visually, they also take over the area physically. It’s hard to get out of this. You have to stop, figure out where you’re going, and in doing so, you’re exposed to all this stimulation. We psychologically queue up for other people to need something.
Narrator: And then there’s the smell. Aah, that divine smell. The smell of popcorn is ingrained in the brain of each and every moviegoer. This smell catches your attention as soon as you enter and evokes a feeling of nostalgia. You probably won’t eat a jar of popcorn and a can. of Buncha Crunch at home, but here it is. And in larger locations, there may even be multiple concession areas. If your auditorium is located on a higher floor, prepare to pass through two or three delicious exhibits. And since outdoor eating and drinking is not allowed, if you need to eat something during the two-hour movie, you should get it at the theater.
Okay, so you need to buy just one thing, anything small and cheap. Well, smart luck. All the pieces presented at the concessions are more expensive than what you would pay outside the theater. And, many times, it is not even possible to locate a small size. Therefore, you will have to decide between normal and large. What does normality mean? The big one turns out to be a bigger business. It’s just a dollar more. Therefore, you may be tempted to spend a little more. And if you eat all that salty popcorn, you’re probably thirsty. Then you will also buy a drink.
And that is wonderful news for the theater. Because all the food sold at concessions generates a huge profit margin. This means they are affordable to manufacture but sell at a premium price. Remember $8 popcorn? Movie theaters earn much more from this bag of popcorn than from your ticket.
Let me show you what I mean. In 2018, 62% of AMC’s total revenue came from admissions. Thirty-one percent was from concessions. But AMC was able to keep almost 84% of that concession revenue as profit, compared to just under 50% that they were able to keep from admissions. Basically, if you spend $1 on food, AMC keeps $0.84. But if you spend $1 on a ticket, it keeps only $0.50. So it will do whatever it can to get you to spend more money on food.
Luna: Buy one and drop one; loose updates; loose refills; what they do is hotel to deserve discrimination.
Narrator: This means they will offer you a higher price with a giant size. The margins aren’t as smart, but the movies still get more money. And movie theaters love to offer mixes. Popcorn and soda, a hot dog and fries, candy and slushie, almost any mix you can think of. Unfortunately, those combinations don’t usually turn out to be a smart deal. Unless you’re sharing in a giant group, chances are you’ll end up with more food than you can eat and loose spares you couldn’t possibly use.
Yarrow: They end up wasting a lot of that popcorn, but, most importantly, they end up wasting that money.
Narrator: Many theaters have also started offering things like alcoholic beverages and full meals. These might bring a better experience, but they also allow theaters to charge an even higher premium. Like this AMC deal that offers a hot dog, curly fries, and a chocolate-chip cookie for $13. Combine all of this with bright-red colors, warm lighting on the food, and brand tie-ins, and it’s tough to walk away from the counter with just one thing. But the tricks don’t stop at the lobby.
Theaters list movie start times 15 to 20 minutes before the actual start of the movie. This is helping theater in two ways. This allows them to run more classified ads before the trailers, which is another source of profit, and helps keep viewers sitting and waiting longer. If you have to watch 20 minutes of ads and trailers, you might give in and pass up the candy box, especially if the ads are for food and soda. And the delay times also the tension of missing the beginning of the movie. You may not think of waiting in line for snacks.
Every interaction is designed to get you to spend cash at dealerships. Just look at the counter in relation to the concession counter. In this AMC, the window is undeniable and not very stimulating. But the concession counter is bright, colorful and branded. draws attention.
But those are the tricks they only use when you’re at the movies. Movie theaters are also experts at making you go back to another movie. Reward issues and special access systems inspire consumers to switch to watching videos more frequently. Every dollar spent is a wonderful incentive to buy a little more than you normally would.
Moon: They report their members going to movies more often with the subscription than without. And, of course, these members will bring their friends and their families, who will pay full price.
Narrator: And if you saved money on your ticket with a program like AMC A-List, you might be more willing to spend money on food. Some of these programs can actually save you money, but you shouldn’t spend more just to get points or discounts faster. Of course, if your loyalty program is on an app, the theater has 24/7 access to your attention and can send push notifications with details about promos and deals, like this AMC ad that offers free popcorn when you purchase a ticket for your friend. Even when you’re not at the theater, they’re still trying to get you to spend money.
You may be quite bored in movie theaters right now, but it’s not an easy deal. Avid moviegoers need modern, well-maintained theaters with high-quality formats, and since much of the ticket value goes to the distributor, theaters will have to look for other sources of revenue, such as snacks and drinks.
So, should you just stay home, throw some Orville Redenbacher in the microwave, and watch only what’s on Netflix? Of course not! Going to the movies is supposed to be fun. But you have to make sure the movie you’re seeing and the food you’re eating is what you actually want, not just something that has been constantly advertised to you. And these tactics are employed best at big chains, like Regal or AMC. At a local theater, you’ll often find cheaper concessions and tickets. So, what can you do to save money?
Moon: Eat before you go.
Here is a transcript of the video.
Narrator: I just watched the new “Spider-Man. ” The price was $12, my popcorn was $8, the candy was $4. 50, and my soda was $6. That’s more than $30 for a single person. Cinemas are like theme parks or carnivals. Once inside, you respect their rules. And if you’re like me, you spend a lot more than planned. AMC doesn’t sell you the price of the movie. They sell you this food.
You can’t get in here without spending money. It all starts with the ticket. You might have heard that movie-ticket prices keep climbing, averaging over $9 nationwide, and almost twice that in big cities. Going to see a movie means you have to spend at least the cost of admission. But if you think that money is going to the theater, you’re wrong. Chains like Regal and AMC keep only about 50% of the money they take from ticket sales each year. The bulk of that ticket price goes back to the distributor. And if you want to see a higher-quality format, you have to pay a huge premium. But it doesn’t really matter how much your ticket costs, because if you’re going to a movie theater, chances are you’re buying some food. AMC reports that more than 71% of attendees purchase something at concessions.
Kim Moon: If they didn’t have concessions, they wouldn’t be in business.
Narrator: This is Kim Moon. Es a marketing instructor at the University of Illinois at Chicago. And she’s right. Without dealer sales, AMC and Regal would make a profit.
Moon: So when you walk into a movie theater, you see tons and tons of pictures similar to food and drinks.
Narrator: Most movie theaters are designed in such a way that you have to walk past the dealership counter. The movies themselves are hidden in long, dark hallways. But as soon as you enter the room, the food is bright, colorful and, thanks to the windows, visual from every angle. You can see popcorn popping, piles of candy, and giant soda machines.
Kit Yarrow: Big, chunky boxes have a sort of billboard effect. They are huge and appeal to you more than a box size. However, when you open it, it contains about the same amount of candy as a small box you can find at the drugstore.
Narrator: Everything is surrounded by television screens that loop beautiful shots of soda and popcorn. The food catches your attention. Unlike a restaurant, where the food is prepared out of sight, a movie theater prepares everything in front of you.
Yarrow: Taking over the area visually, they also take over the area physically. It’s hard to get out of this. You have to stop, figure out where you’re going, and in doing so, you’re exposed to all this stimulation. We line up, psychologically, to need something.
Narrator: And then there’s the smell. Aah, that divine smell. The smell of fermented popcorn is ingrained in the brains of each and every moviegoer. This smell catches your eye as soon as you enter and evokes a feeling of nostalgia. You probably don’t eat a jar of popcorn and a box of Buncha Crunch at home, but you do here. And in larger venues, there would possibly even be multiple concession areas. If your auditorium is on an upper floor, be prepared to walk past two or three attractive exhibits. And since no outdoor food or drinks are allowed, if you need to eat something during the two hours of film, you’ll have to get it at the cinema.
Okay, so you need to buy just one thing, anything small and cheap. Well, good luck. All pieces presented at concessions are more expensive than what you would pay outside the theater. And often, you can’t even find a small size. So you’ll have to decide between regular and large. What does regular mean? ? The big one turns out to be a bigger deal. It’s just a dollar more. So you might be tempted to spend a little more. And if you eat all that salty popcorn, you’ll probably be thirsty. Then you’ll also buy a drink.
And that’s great news for the theater. Because all of the food sold at concessions has a huge profit margin. That means they’re cheap to make but are sold at a high price. Remember that $8 popcorn? Theaters make a lot more on that bag of popcorn than they make on your ticket.
Let me show you what I mean. In 2018, 62% of AMC’s total revenue came from admissions. Thirty-one percent was from concessions. But AMC was able to keep almost 84% of that concession revenue as profit, compared to just under 50% that they were able to keep from admissions. Basically, if you spend $1 on food, AMC keeps $0.84. But if you spend $1 on a ticket, it keeps only $0.50. So it will do whatever it can to get you to spend more money on food.
Luna: Buy one and drop one; loose updates; loose refills; What they are doing is resorting to discrimination on merit.
Narrator: This means you’ll be offered a higher price with a giant size. The margins aren’t as smart, but cinema still gets more money. And movie theaters love to offer mixes. Popcorn with soda, a hot dog with chips, sweet and slushie, just about any mix you can think of. Unfortunately, those combinations don’t usually turn into a smart deal. Unless you’re sharing in a giant group, you’ll most likely end up with more food than you can eat and loose spares that you wouldn’t possibly use.
Yarrow: They end up wasting a lot of that popcorn, but, most importantly, they end up wasting that money.
Narrator: Many theaters have also started offering things like alcoholic beverages and full meals. These might bring a better experience, but they also allow theaters to charge an even higher premium. Like this AMC deal that offers a hot dog, curly fries, and a chocolate-chip cookie for $13. Combine all of this with bright-red colors, warm lighting on the food, and brand tie-ins, and it’s tough to walk away from the counter with just one thing. But the tricks don’t stop at the lobby.
Theaters list movie start times 15 to 20 minutes before the actual start of the movie. This is helping theater in two ways. This allows them to run more classified ads before the trailers, which is another source of profit, and helps keep viewers sitting and waiting longer. If you have to watch 20 minutes of ads and trailers, you might give in and pass up the candy box, especially if the ads are for food and soda. And the delay times also the tension of missing the beginning of the movie. It may not occur to you to wait in line to buy some snacks.
Every interaction is designed for you to spend cash at dealerships. Just look at the counter in relation to the concession counter. In this AMC, the window is undeniable and not very stimulating. But the concession counter is bright, colorful and marked. It attracts attention.
But those are the tricks they only use when you’re at the movies. Movie theaters are also experts at making you go back to another movie. Reward issues and special access systems inspire consumers to switch to videos more frequently. Every dollar spent is a wonderful incentive to buy a little more than you normally would.
Moon: They report that their members move on to videos more with the subscription than without it. And, of course, those members will bring their friends and family, who will pay the full price.
Narrator: And if you saved money on your ticket with a program like AMC A-List, you might be more willing to spend money on food. Some of these programs can actually save you money, but you shouldn’t spend more just to get points or discounts faster. Of course, if your loyalty program is on an app, the theater has 24/7 access to your attention and can send push notifications with details about promos and deals, like this AMC ad that offers free popcorn when you purchase a ticket for your friend. Even when you’re not at the theater, they’re still trying to get you to spend money.
You might get pretty bored in movie theaters right now, but it’s not an easy deal. Avid moviegoers need modern, well-maintained theaters with high-quality formats, and since much of the ticket price goes to the distributor, theaters will have to look for other sources of revenue, such as snacks and drinks.
So, do you deserve to stay home, throw some Orville Redenbacher in the microwave, and watch only what’s on Netflix?Of course not! Going to the movies is meant to be fun. But you need to make sure that the movie you watch and the food you eat are what you really want, not anything you’re constantly told. And those tactics are more productive if they’re used on larger chains, such as Regal or AMC. At a local theater, you’ll find cheaper prices and tickets. So, what can you do to save money?
Moon: Eat before you go.
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