A personal finance expert has revealed how movie theaters actually make their money. It’s quite surprising.
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Humphrey Yang has over 3.3 million followers on TikTok, where he talks about all things money. The financial guru explained how big and small theaters generate revenue. It turns out that movies are just a small slice of the pie for many cinemas.
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“I was shocked to learn that movie studios actually take 80% to 100% of a theater’s revenue in the first two weeks,” Yang explained. “Then, over the next few weeks, the ratio becomes progressively more movie-friendly, typically resulting in a 50:50 ratio.”
This means that movie theaters make their income elsewhere: in concessions. Cinemas inflate the average price of cinema popcorn by 1,275%, and about 70% of cinema customers buy snacks at the cinema, Yang found.
According to Yang, small theaters get 80% of their revenue from concessions and 20% from ticket sales. Meanwhile, the big chains, like AMC, tend to earn 35% of concessions and 65% of ticket sales.
Ultimately, the ratio will depend on the theater’s ability to broker a deal.
“I’ve known that since 1976. Concessions are where the money is. Our parents used to sneak in snacks,” someone wrote.
“Another reason to go to the movies after a while,” another commented.
“We saw the awards, it was obvious that’s how they make their money,” one person joked.
“I bring the whole dollar store with me,” one TikToker replied.
“Nobody makes popcorn like movie theaters so I will always buy it,” one user added.
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