The Rising Cost of Popcorn
Going to the movie theater is one of the easiest outings to plan with your friends, mainly because of how inexpensive yet unifying the experience is. You get to see a story unfold alongside the people you love, while sharing a communion of food all in one sitting. All of these elements make visiting the movie theater worthwhile.
Unfortunately, this is one of those "back then" cases.
Popcorn prices have risen.
According to an article by Stanford Graduate School of Business titled “Why Does Movie Popcorn Cost So Much?”, the main reason it is pricey is not because movie theaters are greedy, but because inflating popcorn prices helps them generate steady profits. The article reveals that concessions make up 20% of gross revenues. To understand this further, it is important to take into account how the money is distributed when a movie is released in theaters.
An article from Econlife provides detailed statistics on how the money is distributed:
“The movie theater gets most of its revenue from ticket and food sales. However, somewhere between 60% and 70% (and sometimes more for a huge hit) of the ticket revenue goes to the movie distributor. Consequently, from a $9 ticket, the theater probably keeps from two to four dollars. However, not everyone pays the same ticket price. If you are very young or very old, paying less will generate less revenue.
As a result, the theaters need their snack revenue. In 2018, one movie chain, Cinemark, collected $1.8 billion in ticket revenue but had to pay back $1 billion in fees. Meanwhile, its $1.1 billion concession revenue only cost them $181 million, which meant something close to a whopping 84% profit margin.” - Econlife
Yikes…
First and foremost, the money goes to the studio, advertising and marketing, and the cast, leaving the theater with the smallest share. As a result, these premium prices for a basic commodity—popcorn—are really just a way to ensure that moviegoers can buy affordable tickets to see the latest movies.
There is a debate over whether movie theaters should charge more for concessions or tickets to remain profitable. People who support the increase in concession prices often argue that charging more for tickets could eventually lead to movie theaters having to close their doors, as only a small percentage of cinephiles would be willing to pay such a hefty price for a single movie. Conversely, people who advocate for higher ticket prices usually side with those who are willing to invest more money for the experience.
Yes, a popcorn bucket for $8 does seem crazy, but there are layers to why movie theaters structure their concession prices this way. Surely, the times have changed from when popcorn was priced similarly to a box of candy, but movie theaters have evolved and so have the popcorn prices.
Edited by Joyce Kristine Culong
Articles cited
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