Watching the newest blockbuster with your family in a multiplex is always great fun. And when you get hungry during intermission, there is nothing better than the sound of crunching popcorn to open up your appetite. But why are these tasty snacks so expensive?
Popcorn Is Absurdly Priced
A medium sized portion of popcorn costs less than a dollar to make, but it is sold seven or eight times that price in movie theaters. How could they do that and why are people mostly comfortable with that?
Multiplexe Cinemas Get Only a Tiny Percent of Ticket Sales
First of all, these cinemas do not earn much from the movies. They claim that more than ninety percent of tickets revenue goes back to the production companies, which leaves them with a very, very low profit.
Building a Multiplex Is a Huge Investment
Second of all, building a multiplex is a huge investment, and it usually takes years for the investors to get only a part of their investments back. Actually, when you think about how fast are these things built and how big they are, it's no wonder that they start off with a massive debt.
This Is Where the Food Comes In
So if multiplexes cost so much and ticket sales are no good profit, how could they be sustained? The real earners are actually the snacks for which every starving movie fan craves for!
Food Is Always Sold by the Third Party
Food parlors are usually not owned by the multiplexes, but they are rented by a third party instead. Their main concern is quality, and higher quality also means an even higher price.
It's Not a Competitive Market
Have you ever noticed that you can't choose the food brand? You are buying their product and you are paying their price. Without the competitive market, that price can be as high as they want to set it.
The Price of Concessions Doesn't Actually Matter
That's right. People are going to the movies because they are driven by their desire to see a certain film, not because of the prices of tickets or food. It's a unique experience, and no one really cares how much money do they spend on having it.
The Price Is More Important Than the Amount
Multiplexes don't loose much money if you decide not to eat any of their food. It's not a restaurant and your belly is not their primal concern. If they were to lower the food prices so more people would enjoy their snacks their sales would increase, but their profit would go down.
Children Are the Biggest Consumers
Studies show that children are the biggest food consumers in movie theaters. And you know how much they care about the food price? As same as they do about everything else - not at all.
No One Will Risk Sneaking Their Own Food
Movies are usually long, and sooner or later you'll probably have to eat. If you don't want to pay inside, sneaking food in is not a good alternative. Not wanting to pay for a $15 Coke is not worth getting kicked out of a theater and losing the $50 you paid for the ticket.
Cinema People Have Explained It Simple
Theater owners consider expensive popcorn as a part of an experience: "If you can afford a ticket worth 350 bucks per head, can you not shell out a humble 120 bucks for the coke and a meager 180 bucks for that popcorn tub which will only make your time out memorable?"