Movie theater popcorn prices- Economics

I'm sure we've all had the concept that if movie theater popcorn and soda were cheaper, more people would buy, but I am curious if that is true. I searched the internet and couldn't find any reliable study. I know that popcorn and soda's high prices allow theaters to charge less per ticket, but does anyone have any ACTUAL information that shows this magical formula for profit?

1.) Will people who buy popcorn and soda always buy popcorn and soda at any price?
2.) Are there any "tweener" consumers who might buy at a lower price? Will this offset the loss of profit?
3.) Are there a ton of people who won't buy at any price?

Just curious if anyone has an real information.

I've always heard that theaters actually rely on concession sales and that they don't actually make money from ticket sales. I don't how true that is, but it's what I've always heard.
I took my girl to the drive-in recently on opening night, $8 a person for two movies and we brought our own snacks, and even beer.

kamalktk said:   economics 101. supply and demand curve.

jcb193 said:   I'm sure we've all had the concept that if movie theater popcorn and soda were cheaper, more people would buy, but I am curious if that is true. I searched the internet and couldn't find any reliable study. I know that popcorn and soda's high prices allow theaters to charge less per ticket, but does anyone have any ACTUAL information that shows this magical formula for profit?

1.) Will people who buy popcorn and soda always buy popcorn and soda at any price?
2.) Are there any "tweener" consumers who might buy at a lower price? Will this offset the loss of profit?
3.) Are there a ton of people who won't buy at any price?

Just curious if anyone has an real information.

I'm #3. Movie theater popcorn isn't very healthy.

MadAnthony said:   yes, of course there is an academic study on this

The idea is that it lets theaters get a modest profit from people who want to go to a movie but aren't willing to pay for concessions, and a larger profit from people who do. If they raised ticket prices, fewer people would go to the movies. The margin on movie tickets is tiny.

That is an interesting study.

"They compared concession purchases in weeks with low and high movie attendance."

Then they said this:

The fact that concession sales were proportionately higher during low-attendance periods suggested the presence of “die-hard” moviegoers willing to see any kind of film, good or bad––and willing to purchase high-priced popcorn to boot. “The logic is that if they’re willing to pay, say, $10 for a bad movie, they would be willing to pay even more for a good movie,”

An alternative explanation might be that the stupid tax is alive and well in Spain--just as it is in the USA.

What I mean is that there is a certain kind of movie goer who always buys the bundle of a ticket and a tub
of over priced popcorn. If this type of consumer is not very bright, they may not be able to tell the difference between good movies and bad ones.

Thus, at bad movies you have a higher proportion of concession sales. Not because of "die hard movie
goers", as the article proposes, but because there are more stupid people in the audience.

MadAnthony said:   yes, of course there is an academic study on this

The idea is that it lets theaters get a modest profit from people who want to go to a movie but aren't willing to pay for concessions, and a larger profit from people who do. If they raised ticket prices, fewer people would go to the movies. The margin on movie tickets is tiny.

That's not really what I was asking (but was an interesting article). I was wondering if there were any studies or logic that showed where the tipping point is for gaining additional concession dollars versus losing buyers.

In simple terms:
How many more people would buy popcorn if it was $1.00 vs. $5.00?

scrouds said:   Now that being said, I have a local theater that sells booze. If those prices were cheaper, I would partake. I wonder if the soda -> booze upsell would be profitable.
My ultra-conservative city has banned the sale of alcohol at movie theaters. If you've seen Footloose, that is pretty much what the community is like here. I think it's idiotic and hurts business owners. But I've never been a fan of $8 beers anyway, and I've found that watching movies on a big screen after drinking alcohol gives me a headache.

I'm really no help to theater owners, because I go to theaters only once or twice a year and never buy concessions. But I am pretty excited that one of our local theaters added one of those digital IMAX screens, and I will be one of the first people in line to buy tickets for The Dark Knight Rises at that theater. But I will not be buying popcorn or soda.

Everyone carries a back pack here so we sneak in our own snacks in our back pack.

Bought tickets through TicketsAtWork (6 tickets for $58 after tax)
Going to go see Titanic 3D with wifey tomorrow (will pay for the 3D glasses.. but overall will still be comparatively cheap.. ~$12/$13 per ticket with glasses)
Will sneak in our own snack so we dont have to pay outrageous prices that they have there.

What amazes me is the number of people who feel that they have to judge others who want to live a little and have a snack while watching a movie even though they have a healthy lifestyle with healthy foods and regular exercise and have lost 6 lbs in past month and half.

It's part of the experience.

You can't forget the capital costs as well. If you price tickets/concessions in a way that will for example triple attendance, you will need a bigger building to handle peak demands, more parking, etc.

jcb193 said:   MadAnthony said:   yes, of course there is an academic study on this

The idea is that it lets theaters get a modest profit from people who want to go to a movie but aren't willing to pay for concessions, and a larger profit from people who do. If they raised ticket prices, fewer people would go to the movies. The margin on movie tickets is tiny.

That's not really what I was asking (but was an interesting article). I was wondering if there were any studies or logic that showed where the tipping point is for gaining additional concession dollars versus losing buyers.

In simple terms:
How many more people would buy popcorn if it was $1.00 vs. $5.00?

But the point is that most movie theaters rightly don't just look at the price of the concessions, they look at the prices of everything they sell in relationship to each other. It's the same idea as grocery stores that sell loss leader items or fast food chains that have a "dollar menu" but make it up on high profit items like fountain soda. Theater owners are interested in maximum profit overall, not just how much popcorn they sell.

fasttimes said:   I sneak beer in
I did that when we were about 13

The theater near us used to offer "reel deals" that were under $5 for a large combo with free refills. Over the last three years they have doubled increased the ticket prices, concession prices, and started charging for refills. I understand the need to make a profit, but this business model ticks me off. I feel like they drew people in and once they had a steady following, they jacked up the prices.

I have done the only thing I can--I go to a different theater and tell everyone else to as well.