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One of the many reasons I’m lucky to be married to my husband Mike is that he used to manage a bunch of movie theaters in LA, so he knows a lot about exhibition.

After listening to the Scriptnotes podcast on movie money, he had some additional figures to share.

first personFilm rentals depend on various factors including length of run (the storied 90/10 split in opening week, but perhaps 30/70 in week 15) and location (“showcase” locations like Hollywood may have average film rentals around 35-40% due to studios’ eagerness to have the film at the most-visited or most-visible locations).

When I left exhibition in 2001, our average ticket price was about $6. Our film rental cost percentage was usually in the mid-50s. Assuming 55%, we paid the distributor $3.30 out of that $6 average ticket and kept $2.70.

Meanwhile, our average concession revenues were about $5 per transaction. However, only about 40% of customers bought something at concession, so the concession “per head” (analog to the average ticket price) was $2. So, revenue-wise, ticket sales were 75% of total revenues while our concession revenues were 25%.

However, concession cost of goods was about 15%, so out of the $2 concession sale per head, we paid 30ยข in expenses and kept $1.70. Given that, concession profits were 39% of the combined ticket and concession net.

Expenses are enormous, so even with super-high concession profits, exhibition was (and still is) always strapped for cash. You have a lot to pay out:

  • Facility costs. This includes rent for the building, plus maintaining and upgrading furniture, fixtures, equipment.

  • Staff and management payroll. Around 80% of employees were making within $1.50 of minimum wage, but you also have salaried management at both the theater and national level.

  • Utilities and supplies, all the way down to soap and toilet paper.

One expense mentioned in the podcast was co-op ads. Co-ops were always a line item on our theatre P&L, and I was told that the studios placed the ad, but then charged every theatre whose name was listed in the theatre-list box below its proportional amount for the cost of that ad.

In LA, there are “showcase” theatres in the most important parts of the market (Santa Monica, Century City, Hollywood, Westwood) whose names appear larger in the co-ops, and for which actual show times are listed. Accordingly, the co-op cost to those locations is higher than for others.