Alright, you know the routine by now. Here's the background article:
I thought I'd try formatting this more like an outline, just to see if it's easier to read, so here we go.
Summary: There is a report that a man in Michigan is suing his local movie theater for overcharging for food sold in the theater, given that the theater is also disallowing customers from bringing their own food in. It is estimated that movie theaters make about an 85% profit on the food they sell in theaters. However, movie managers are quick to note that the majority of revenue from the movies themselves go to the studios; thus, movie theaters are more readily in the food and beverage business.
Notable Facts/Ideas:
- Popcorn is usually sold at 9 times the cost of making it.
- The man who is suing was motivated to do so when he paid $8 for a Coke and a box of Goobers, about three times the price of purchasing those items in grocery stores.
- To restate, the majority of the price of a movie ticket goes to studios and distribution companies.
- Justifying/winning a lawsuit of this nature is unlikely.
My Take: Though I would love to take a look at some more concrete numbers outside of this article, I do sympathize with both sides, but particularly the movie theater managers. I don't go to the movies very often, but every time I walk in, I'm tempted by the smell of buttered popcorn and the sound of the fountain drinks being poured. It is certainly a bit egregious to pay nine times the cost for popcorn (as delicious as it is) and whatever massive markup exists on fountain drinks (which incur very low costs).
However, especially with newer technology such as high-end home theaters and streaming video, movie theaters certainly struggle more than ever to maintain a stream of revenue, especially when it's not high movie season and shows like The Hunger Games aren't out to yield big ticket sales. Movie theaters, as a business, are trapped by studios and distribution, given that they claim so much of the ticket sale revenue; thus, the theaters are forced to increase revenue however they can and logically, it occurs from food sales.
I do still think that movie theater food is overpriced, but I understand why I should pay a markup for it and am willing to do so. When it comes down to it, people are still buying enough of the movie theater food for the theaters to be able to maintain the prices, so from a business standpoint, they have no incentive to lower their prices until their sales drop. That's on the movie-goers.
Thanks for tuning in, and let me know what you think!
The format is definitely easy to read, but I miss your classic sign-off with something to the effect of, "and it's to that that I say, what the heck, man?" :)
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