Economics of movie theaters

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November 25th, 2015 at 2:25:09 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 722
Posts: 8413
I know we have discussed this before, but just looking at Carmike theaters latest financial numbers for last quarter (July-September 2015).
Average attendance is 59.1 patrons per screen day (multiple showings). Admission is $7.23 per person of which $4.01 is Film exhibition costs and average is $4.55 per person in concessions.That is average revenue of $696.20 per screen day of which $237.05 is film exhibition costs leaving $459.15 per screen day gross revenue less film exhibition.

Now Carmike is more of a small town theater company, so it doesn't make as much as AMC or REGAL. Carmike owns 269 theaters with 2,875 screens and makes less than $600 million in total annual revenue. But they are perpetually losing money because their razor thin margins can't keep up with interest expenses.

I keep thinking that the movie company could make more money renting small video rooms (10 seats or less) equipped with 84" televisions and Chromecast and selling snacks and letting the customers bring their own video content. I figure the square footage of a movie theater could easily accommodate 8 video rooms.

I say an 84" TV screen, because 65" TVs or less than $1000 at Walmart, and are too common at home.


The movie theater attendance is probably normally in groups of 2 to 4 people. You would need people to come in larger groups. Guys watching football games, kids watching the latest Netflix movie, mothers in the afternoon with groups watching children and movie.
November 25th, 2015 at 2:40:36 AM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 102
Posts: 6649
I don't see it happening, home is so comfy and home theaters so good that the difference is marginal. Maybe if they got into sports and put up the Super Bowl or Wrestlemania.

Remember, the whole thing is now a real estate play. Theaters simply can no longer make money on movies with the current model.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
November 25th, 2015 at 5:01:42 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 722
Posts: 8413
Quote: AZDuffman
Remember, the whole thing is now a real estate play.


Maybe ultra long term, but they don't build them and tear them down very quickly.
Carmike lists their operational income as about $11 per screen day, which is quickly swallowed by the $48 per screen day interest cost.

Demographics movie tickets sold relative to percentage of population
-11% Caucasian
-8% African American
+38% Latin
+29% Other

The demographics suggest that Latinos and Asians attend more than their fair share of movies.

But I just can't get over that 59 patrons on average per screen day. You have to figure that given 6 showings in a typical theater, there must be 500-600 available seats in a day.
November 25th, 2015 at 6:30:55 AM permalink
Nareed
Member since: Oct 24, 2012
Threads: 323
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Quote: Pacomartin
The movie theater attendance is probably normally in groups of 2 to 4 people. You would need people to come in larger groups. Guys watching football games, kids watching the latest Netflix movie, mothers in the afternoon with groups watching children and movie.


I don't know if they still do this. A local chain here, Cinemex, offered screenings of MNF at very reasonable prices, with seat side concession service (not that there aren't plenty of breaks to hit the concession stand). No idea how they made out.
If Trump where half as smart as he thinks he is, he'd be twice as smart as he really is.
November 25th, 2015 at 8:30:27 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 722
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Quote: Nareed
No idea how they made out.

I'm not sure what the licensing agreements are with television. If you start showing anything and make a profit, the company that produces the content will try and get a cut.

My idea was to rent the giant televisions with Google Chromecast and let people bring their own video content.

The movie theater business is y different in Mexico. Mexico has over 5000 indoor screens, while the USA has over 40,000. Mexico still draws more adults to the movies, while adults are fairly rare in the USA (outside of adults going with their children).

Cinépolis has 3,187 screens, while Carmike has 2875 screens, and Carmike is a smaller company in the USA. You would never have a chain of theaters in Mexico with an average as low as 59 people per screen day (i.e. all movie showings in one day). Carmike is the 4th largest chain in the USA.




Cinemark is based in Texas and has some locations in Latin America (particularly Brazil), they have the most number of people in a screen per day.



On June 2, 2011, Cinépolis invested $25 million and partnered with the South Korean company CJ Group to open 11 4DX theaters throughout Mexico. 4DX features motion seats, wind effects, water and air spray, and odors with over 100 scents. It first opened at the Plaza Acoxpa mall in Mexico City with the release of Disney's Pirates of the Caribbean: On Stranger Tides.
November 25th, 2015 at 11:14:30 AM permalink
Evenbob
Member since: Oct 24, 2012
Threads: 108
Posts: 11386
I'm amazed people still go to movies.
Last time I went was 2011. People
coughing and talking, having to breath
the air that 100 other people have just
exhaled. If I never go again it would be
fine with me.
If you take a risk, you may lose. If you never take a risk, you will always lose.
November 25th, 2015 at 11:23:23 AM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 49
Posts: 4703
Quote: Pacomartin
On June 2, 2011, Cinépolis invested $25 million and partnered with the South Korean company CJ Group to open 11 4DX theaters throughout Mexico. 4DX features motion seats, wind effects, water and air spray, and odors with over 100 scents. It first opened at the Plaza Acoxpa mall in Mexico City with the release of Disney's Pirates of the Caribbean: On Stranger Tides.
WOW. Someone sure saw a "market" somewhere... motion seats, wind effects, water and air spray/odors.... sort of like that scene where the cattle were being kept at the back of the movie theater for the stampede scene.

Small group electronic entertainment with specialty snack service.... heck, you got those all through Vegas in Korea town and China town. Usually the girls can't have tatoos but don't have to be Asian, the food is usually Asian stuff perhaps best described as Asian Finger Food.

The bars are usually red, the individual rooms black.
November 25th, 2015 at 12:36:13 PM permalink
FrGamble
Member since: Oct 24, 2012
Threads: 44
Posts: 5107
I heard a good line from someone who owns a movie theatre in Indiana. He said, "the key is to find a place where people like popcorn and build your theater there." Apparently he made more in concessions than ticket sales.
November 25th, 2015 at 12:47:27 PM permalink
Evenbob
Member since: Oct 24, 2012
Threads: 108
Posts: 11386
Quote: FrGamble
Apparently he made more in concessions than ticket sales.


Theaters have always made all their
profits from the concession stand.
Ticket sales pay for leasing the movie,
the concession stand has been the
backbone of the business since the
30's.
If you take a risk, you may lose. If you never take a risk, you will always lose.
November 25th, 2015 at 1:02:47 PM permalink
Ayecarumba
Member since: Oct 24, 2012
Threads: 83
Posts: 1365
Quote: Pacomartin
I know we have discussed this before, but just looking at Carmike theaters latest financial numbers for last quarter (July-September 2015).
Average attendance is 59.1 patrons per screen day (multiple showings). Admission is $7.23 per person of which $4.01 is Film exhibition costs and average is $4.55 per person in concessions.That is average revenue of $696.20 per screen day of which $237.05 is film exhibition costs leaving $459.15 per screen day gross revenue less film exhibition.

Now Carmike is more of a small town theater company, so it doesn't make as much as AMC or REGAL. Carmike owns 269 theaters with 2,875 screens and makes less than $600 million in total annual revenue. But they are perpetually losing money because their razor thin margins can't keep up with interest expenses.

I keep thinking that the movie company could make more money renting small video rooms (10 seats or less) equipped with 84" televisions and Chromecast and selling snacks and letting the customers bring their own video content. I figure the square footage of a movie theater could easily accommodate 8 video rooms.

I say an 84" TV screen, because 65" TVs or less than $1000 at Walmart, and are too common at home.


The movie theater attendance is probably normally in groups of 2 to 4 people. You would need people to come in larger groups. Guys watching football games, kids watching the latest Netflix movie, mothers in the afternoon with groups watching children and movie.


First run films will be distributed online and in theaters simultaneously very soon. I can see where the "boutique" theater could find a market in this environment. Rather than having customers bring their own discs, the boutique could offer a variety of films from a catalogue, much like a karaoke room. A 120" screen with an option for 3-D glasses, and a kicking surround sound system would be mandatory.
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