Popcorn Pricing in Movie Theaters
Movie theater popcorn is notoriously pricey due to a concept called ‘captive audience pricing.’ Theaters often rely on concession sales, like popcorn, for a significant portion of their profits, as ticket revenues are shared with movie distributors. With few alternatives available, moviegoers are willing to pay premium prices for the full cinema experience. What’s your take on this popcorn pricing strategy?
The fact concession sales were higher during low-attendance periods suggested some "die-hard" moviegoers would see any film and buy high-priced popcorn. So for popular films, moviegoers get more quality than needed to show up. That means theaters could charge higher ticket prices.
About three ounces of kernels make 12 cups of popcorn, a medium bag’s worth. This makes movie theater popcorn kernels $2.67 per ounce versus $0.12 per ounce for supermarket kernels. So why is movie popcorn 21 times more expensive?
Moviegoers pay premium prices for the full cinema experience. Movie theater popcorn costs more per ounce than filet mignon.
Cost Breakdown of Movie Theater Popcorn
The first factor is ingredients cost. Popcorn kernels are inexpensive, about $0.25 per pound. Oil, butter, and toppings add little cost. The total cost per bag is a few cents, much less than the $5-7 per bag price.
Why are movie snacks overpriced? Exclusivity is one reason snacks are expensive at movie theaters. Movie tickets are relatively cheap, so theaters use snacks like popcorn to help their profit margin. Much of the cost of movie tickets go to the production companies.
There are many theater patrons who either refuse to buy concessions because of the exorbitant prices or attempt to smuggle outside food and drink into the theater.
Concession Strategy and Profits
Concessions highly subsidize ticket prices. Theaters are essentially a concession selling business, and use movies to get you to come buy theirs. Cinemas only gain a tiny portion of their ticket money sold, so they make up for it by selling overpriced snacks.
Theater’s concession stand is the only sanctioned source for food and drink. Managers can legally place a substantial surcharge on sales. This is the same reason why snacks can also be more expensive at convenience stores or airports.
When an individual film flops, theaters need revenue from snacks to break even. Once you’re in the theater, the only option for food and drinks is concessions. Without anyone to compete with, concession stands can charge whatever they’d like.
Inflation and Healthier Options
There’s also inflation. Rising costs at grocery stores and restaurants apply to movie theaters too. During an earnings call, chairman and CEO Adam Aron said brand-name candy companies have been charging AMC up to 33% more for products in response to supply chain challenges.
Q: Are there healthier snack options available at movie theaters?
A: While traditional movie snacks tend to be on the indulgent side, many theaters now offer healthier alternatives. These options may vary depending on the theater.
Q: It should be said that movie food and beverage prices vary widely by factors. Huge price markup!
No matter if at the movies all the time or an occasional viewer, you have to have snacks! It’s almost illegal to go to the movies without snacks in hand. Bring your own snacks! Movie theaters that are in malls don’t have strict rules. If possible, try to find a movie playing at a theater that doesn’t care if you bring your own food.