Besides selling movie tickets, how do movie theaters make a profit?

Movie theaters receive most of their profit from selling movie tickets. However, in order to further increase their profit, movie theaters offer their customers other goods in addition to their ticket. Specifically, theaters offer popcorn and candy in order to gain a larger profit.

In 1905, nickelodeon theaters were introduced across the United States. By 1907, about 3,000 theaters opened their doors and by 1914, these theaters were filled with the 27% of Americans that went to the movies each week. These theaters attracted concession stand workers to sell their goods to moviegoers. Though independent from the theater, the concessionaires would sell their candy and popcorn to consumers at the movies. At first, theaters refused to offer concessions at their theaters. Looking down on the concessionaires, theater owners were concerned that selling food at their theaters would degrade the theater’s value. Theater owners were looking to keep the cinema an upscale environment that serviced the elite. In order to distinguish themselves from lower grade shows, movie theaters elected to not sell food.

            It wasn’t until the Great Depression that theaters agreed to sell snacks at their theaters. In an effort to gain more profit during the hard economic times, theaters offered consumers snacks and concessions. Theaters made popcorn accessible to the general population, selling a portion to each costumer for nearly ten cents. This price allowed for some of the poorest Americans to purchase the snack.

            In the late 1940s, television became a direct competitor of the movie industry. Allowing families to stay at home and enjoy their favorite television shows, television caused movie attendance to decrease by 50 percent. Losing a portion of their consumers to television, movie theaters became more aggressive in selling popcorn. At the close of World War II, sugar that was being rationed during wartime became available to the public. Theaters used this influx of sugar to introduce more snacks such as Goobers, Sno-Caps, Chuckles, and Black Crows as well and the still popular Junior Mints and M&Ms.

            With the success of their food sales, movie theaters increased their profits. Allowing the theater to become a place that sold more than movie tickets, the movie theater became a culture that appealed to many people. In attracting a wider consumer market and providing consumers with more options for purchase, the movie industry was able to expand the success of their business.

 

What other amenities have increased theater profit?

 

Works Cited

“A Short History of Movie Theater Concession Stands. Plus: A Candy Quiz!” Slate Magazine. Web. 18 May 2012. <http://www.slate.com/articles/news_and_politics/summer_movies/2007/06/make_it_a_large_for_a_quarter_more.single.html&gt;.

 

How did the movie industry stay afloat during the Great Depression?

It is assumed that movie attendance would drop considerably during times of economic hardship. A ticket to the movies is considered a luxury, something that is not essential to survival. However, in taking a closer look at movie ticket sales during the Great Depression, one can conclude that economic hardship did little to diminish success of the movie industry.

Though the movie industry met success during the Great Depression, it had to go through a period of adjustment in order to successfully adapt to the plummeting economy. In 1933, when the Great Depression reached its peak, close to a quarter of the United States was unemployed.  In the early days of the Great Depression, the movie industry was under fire for its debt. Converting from silent films to ones that incorporated sound, the movie industry suffered from debt reaching roughly $410 million in the late 1920s. Movie ticket sales had fallen by 40% by 1933. However, the movie industry pushed to stay afloat.  Cutting employees’ salaries and closing nearly one third of theaters across the nation, the movie industry looked to decrease their factors of production.

 In order to attract customers, theaters offered incentives. Theaters offered consumers raffle tickets for cash prizes as well as reduced ticket prices in an effort to lure them into buying movie tickets.  Implementing these benefits, the movie industry made movie tickets more available and accessible for a wider audience. In fact, 60 – 70 million Americans purchased movie tickets per week during the Great Depression. In broadening their market of consumers, the industry was able to stay afloat despite the economic turmoil.  

In cutting the prices of their factors of production and providing movie goers with incentives to buy tickets, the movie industry was able to maintain its success through the Great Depression.

 

What was the opportunity cost of purchasing a movie ticket during the Great Depression?

 

Work Cited

“Digital History.” Digital History. Web. 11 May 2012. <http://www.digitalhistory.uh.edu/historyonline/hollywood_great_depression.cfm&gt;.