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Movie theaters fail Economics 101

Have you been to a movie theater lately?  Neither have I.  In fact, I think the last movie I went to see at the theaters was a pre-screening of Serenity last year.  One of the main reasons that I skip out on the big screen experience these days is that while ticket prices are increasing, the customer’s ROI is rapidly declining.  Think about what you get for that $8 ticket price (here in Atlanta).  You get on average 20 minutes of ads and previews before your movie actually begins.  I’m not a rocket science or anything but don’t the big 3 networks offer television for free with about 20 minutes worth of commercials per one hour show?  I know their show’s don’t have multi-million dollar budgets but it seems that the ticket prices are increasing along with the total number of ads before the show. 

Another reason I don’t go to the movies is because we are preprogrammed to eat while we stare at movie screens.  The movie industry knows this and charges tripple the retail price for your theater munchies.  I mean $3 for a 20 oz soda should be a crime.  If you don’t think the snacks are over-priced, chew on this:

“Just $30 worth of raw popcorn can translate into as much as $3,000 in sales at the movie theaters...At Regal Entertainment Group, the nation’s largest theater chain, with more than 6,200 screens, concession sales last year generated $659.8 million in revenue, more than a quarter of Regal’s total income.”

Now the theater chains are complaining that their snack revenue is on a downward spiral.  The problem isn’t a decline in the number of moviegoers buying snacks (go to a theater and nearly everyone will be munching) but rather a decline in the number of moviegoers themselves!  Like I said, I haven’t been to the big screen in over 6 months and have no plans to go anytime soon.  The decline isn’t due to piracy either.  It’s pure and simple.  The ticket price is too high for what you get in return.  You have to sit through 20 minutes of commercials while munching on your $20 in snacks and hearing all about the person in the next seat’s day while they talk on their cell phone.  If I wanted all of that, I’d wait until it came on TV and watch it with a group of people.  It would be nearly the same experience for less cost. 

Source: LaTimes

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