Report: $1 DVD Rentals Could Save Customers $1 Billion

A recent article in Home Media Magazine headlined that “$1 DVD Rentals Could Cost Industry $1 Billion,” according to an industry report. The report argues that lower revenue as a result of lower prices will lead to less movie production activity, hurting the economy as a whole.

What about the customer in all of this? Let’s re-write the article’s headline from his point of view: “$1 DVD Rentals Could Save Customers $1 Billion.” Continue reading →

Do Movie Theaters Really Make All Their Money From Popcorn and Candy?

The privilege of satisfying one’s sweet tooth while enjoying a flick on the big screen can be costly.  Prices as high as five dollars or more for a box of candy, soda or bag of popcorn alone are not uncommon in some cinemas.  That can be five times (or more) what these items cost in the super market or a typical vending machine.  These facts lead many to conclude that movie theaters make all their money from these concessions, a myth that has turned into urban legend.

Surveying recent public financial statements from the three largest theater chains—AMC, Regal and Cinemark—reveals the truth of the matter.  Each of these theater chains earned about 70% of its total revenue from ticket sales, about 25% from concessions, and the remainder from other sources (such as on-screen advertising, rental of the theaters to third parties, gift card fees and the arcade games you might see in the lobby). Continue reading →