You go to the movies and buy your ticket and enjoyed the movie, but have you ever wondered what happens behind the scenes? How does the movie theatre business work? When you go to the movies, you might not think about how the business works behind the scenes. Asides from a screen display and showing trailers, what goes into pricing tickets, what kind of contracts theatres have with movie studios, and more. This article will give information on how a movie theatre business work.
How Does The Movie Theatre Business Work?
The first thing needed to run a movie theatre is that the theatre needs to get a license from the Motion Picture Association of America. This license allows them to show movies that are rated G, PG, PG-13, or R. Next, the theatre needs to get its films. They do this by contacting one of the six movie studios: 20th Century Fox, Warner Bros., Paramount Pictures, Universal Pictures, Walt Disney Studios Motion Pictures, or Sony Pictures Entertainment.
The studio will then send them a list of movies that are coming out in the next few months, and the theatre can choose which ones they want to show. Once they’ve chosen their films, the theatre has to order the prints through Deluxe. Deluxe prints and sends out the physical copies of the movie (the actual film) that will be shown in the theatre.
Finally, before the movie can start playing, someone needs to set up the projector and sound system!
How Movie Theaters make Profits
As much as movie theatres get money from the fee charged to people who want to watch movies, there’s more to it.
First, they pay the movie studios, whose movies they show, a particular fee for the right and privilege to show their movies in their theatre.
Second, they are also responsible for the costs attached to putting on the show. This includes the cost of renting or buying the movie projector and screen, paying the employees who work at the theatre, and keeping the lights on and the theatre clean.
Third, they cover the costs of their bills. This includes things like insurance, taxes, and utilities.
Fourth, they have to make a profit. After all of these costs are paid, movie theatres usually charge around $10-$15 for a ticket.
Costs of Running a Movie Theatre
It’s no secret that movie theatres are facing some tough times, fewer and fewer people are interested in going to watch a movie at the theatre with the presence of streaming services like Netflix and Hulu.
Well, the cost varies depending on the size and location of the theatre, but on average, it costs around $1,500 per day to keep the lights on and the popcorn popping. That includes staff salaries, rent, utilities, and other expenses.
It’s a lot of money to keep a theatre running, but it’s still a popular destination for dates, family outings, and special events. So as long as people continue to enjoy going to the movies, we can expect theatres to stick around for a while longer.
The Future of the Movie Theater Business
So, now that you know how the movie theatre business works, what do you think the future holds for it?
There are a few things to consider. Firstly, online streaming services like Netflix and Hulu have made it easier than ever for people to watch movies and TV shows at home, without having to leave the comfort of their couch. This has led to a decline in movie theatre attendance, as people are choosing to stay home instead.
Additionally, Hollywood is churning out fewer and fewer original movies each year, which means that theatres are relying more and more on sequels and remakes. This can be a risky move, as audiences may not want to see the same old movies over and over again.
Overall, it’s clear that the movie theatre business is facing some challenges in the modern age. Nothing so far indicates that the movie theatre business will continue to decline. It’s an industry that’s been around for centuries, and there’s no reason to think that it won’t continue to thrive in the years to come.
Starting a Movie Theater Business
So, you want to start your own movie theatre business? It’s not that difficult. In fact, with the right planning and execution, it can be a very lucrative endeavor. Just follow the tips below:
- Location. This is a very critical factor to consider as you need to select a location that can be easily accessed and has high foot traffic.
- Have a clear business plan and budget in mind. This will help in smart decision-making moving forward.
- Invest in high-quality projection and sound equipment. This will ensure that your theatre looks and sounds top-notch.
- Have a good marketing strategy. Promote your theatre through online channels, social media, and word-of-mouth marketing.
- Offer concessions and special deals to attract moviegoers. This could include discounts for students, seniors, or military personnel.
- Finally, be open to customer feedback and act on them appropriately.
Conclusion
To run a movie business, there are a few things that need to happen, and as someone who enjoys watching movies in a theatre, questions might have popped up about how exactly the movie theatre business works and how they make a profit. To make money, movie theatres typically charge more for tickets than it costs them to show the movie. They also sell concessions, which is where they make most of their money.
