Most of us do a lot of moaning and groaning when we get to the box office and have to purchase our tickets, forking out as much as $50 for a family of four. The good news is that, unlike a sporting event, at least the parking is free. No matter how much we pay for movie tickets, we still enjoy our time at the theater for the most part. It also might leave you wondering where that money from the ticket is going.
Movie theaters actually don’t make much money at all from the ticket sales. In fact, a majority of around 80 percent of tickets sold goes back to the movie studio during the opening week. The longer the film is in theaters, the more profit that particular theater will make as they only have to give about one-third of the money to the studio during the end of a run. Back in the 1990s when films (like “Titanic”) were pumping out ticket sales for months, theaters were doing quite well for themselves.
You can estimate that overall, movie studios take about 60 percent of the ticket sales during a film’s run. That’s just in North America, though, as the numbers are much lower overseas. That’s why domestic numbers have been important for studios, as they can get as little as 20 percent of the ticket sales in other countries. The movie theater tends to see the rest of the money, a lot of which is used just on overhead for running the theater alone.
The way that a movie theater makes money is mainly from concessions. If you have a popcorn machine in your house, you know how cheap it can be to operate. Popcorn costs next to nothing, so your main expense is butter and the one-time cost of the machine. Theaters charge a massive markup on concessions to make a profit, and people are willing to spend that money. Some of that money has to go to the concessions vendors themselves, too.
Because of the money that has to go to the theaters and the distributors of the films, studios find other ways to make money, as well. This is why you see so many sequels and remakes of established intellectual properties, because they can sell merchandise. Films like “Avengers” or “Star Wars” make more from selling toys and clothing than they actually do from the films, but the return that they’re getting from ticket sales is a nice cherry on top of a very expensive sundae.