Question: How do movie theaters make money?


Movie theaters make money through concessions sales, advertising, and (in many cases) video game revenue.

If they make any money from the box office take, it’s like a little bonus – like when you find a dollar and you’re all excited and you don’t know what to spend it on. Except since they’re businesses, they pretty much just spend it on operating expenses.

One of the reasons so many of the answers below cite such different percentages is that there is no “flat fee” or “flat percentage” to license a film print for exhibition.

You can think about it like this:

The booking agent for SuperCinema is in negotiations with Ego Films Distribution to run Ego’s new superhero blockbuster “Catman: The Sunbeam Bandit” in its flagship theater, the Suprema 30.

Ego says, “We’ll give you four prints of ‘Catman’ as long as you agree to run five shows a day of ‘High Budget Hijinx: This Film Is Gonna’ Bomb but We Already Paid for the Blasted Thing, so We Gotta’ Get It On Some Screens’ for two weeks.”

SuperCinema says, “I’d really like five prints of ‘Catman,’ and I’ll take ‘High Budget Hijinx,’ but I’ll only run it four times a day during the week, but five on the weekend.”

They go back and forth like this for a while and finally agree upon the following:

Suprema 30 gets six prints of “Catman” for the first week, but it has to run at least one of those prints in its largest auditorium for three weeks, regardless of performance.
It will also run “High Budget Hijinx” for two weeks, five shows a day on weekends and three on weekdays.
And SuperCinema agrees that when “Blockbuster X: The Final Chapter” is released in November, they’ll run it six times a day on their two largest screens through Thanksgiving weekend.
They’ll pay for these bookings during the first weekend as follows:

“Catman” – $10,000 OR 90% of the box office take, whichever is higher (these numbers are arbitrary for math purposes but the percentages are realistic)
“High Budget Hijinx” – $5,000 OR 70% of the box office take, whichever is higher
So, let’s say opening weekend of the two features, “Catman” brings in $20,000 at the box office. So SuperCinema owes Ego $18,000 because that’s higher than the $10,000 guarantee they agreed to.

“High Budget Hijinx,” on the other hand, brings in $3,ooo. So, the $5,000 guarantee is higher than 70% of the box office take for “HBH.” That mean SuperCinema owes Ego $5,000.

So, there goes the $3,000 in ticket sales for “HBH” PLUS $2,000 more . . . which, thankfully they have lying around because of “Catman’s” success.

Good thing they also sell concessions!

Obviously all this is much more complex when you have 30 screens, multiple distributors, and a wide array of guarantees and percentages involved. And assuming SuperCinema owns multiple multiplexes, that all gets multiplied.

Which is why being a booking agent is like being an air traffic controller, a magician, a financial advisor, and a hostage negotiator all at the same time.

And why movie theaters don’t count on box office revenues to cover operating expenses.

Really, when you think about it, movie theaters are basically concession stands that rely on movies to bring people in the door.