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Considering the immense costs associated with the production of motion pictures and how much they need to earn from movie goers, cable, and streaming services, I couldn’t help but wonder how they break even – let alone become profitable. Since the 1990s the production, distribution, and advertising costs of numerous films have continued to spiral. Many of them have budgets well north of $100,000,000 – and we’re not just talking about super hero epics or other genres that may require a great deal of special effects. However, despite this, the price of the average movie ticket has been relatively stable for years – despite the dramatic rise in prices for attending other venues like sporting events and concerts or eating out at restaurants that account for so much of our current inflationary spiral.
Thinking about about movie ticket prices and inflation, though, I remember my father taking me to see Star Wars when I was nine in 1977. That was the first time going to a movie as a child where I was aware of any mention of the cost. The Star Wars tickets were about $2.25 apiece and with popcorn and sodas the total cost was maybe eight bucks for the two of us, So, looking back to those years, in my estimation this was a very affordable form of entertainment for that period – especially considering that movies were a rare treat in my family. We might have gone to the movies three times a year at the very most. Where my parents were concerned this would have related more to avoiding objectionable content (too much profanity, explicit sex, or graphic violence) than over any particular costs associated with movie attendance. For many years after seeing Star Wars, though, I scarcely thought about where the money from an individual movie went, or exactly how the pie was divvied up.
It wasn’t until many years later, around the 1993-97 period where I went to the movies with any kind of regularity (at least bi-weekly) and had fleeting thoughts about who or what determined ticket prices and where all that money ultimately ended up. Stuff like this wasn’t so easy to research back then (no Google yet!) and for many people like myself having a home computer and access to the fledgling internet was a luxury and quite out of reach. In any case, the cost of the average movie ticket, in say, 1995 was about $4.35 according to Axios.com – which isn’t a huge leap in cost from the Star Wars era almost two decades earlier. The Hollywood Reporter states that a typical movie entrance then was about $2.25, which is right in line with when I first went to see Star Wars with my dad.
Of course, as it turns out, it’s important to take into account other factors such as regional variations across the domestic box office spectrum (US/Canada market), how long a picture has been in release, and whether or not you’re attending a matinee showing. All of these things will determine ticket pricing at your local cineplex or arthouse venue. Another thing to consider is if you’re purchasing a “premium” ticket. In this case, buying a premium ticket is supposed to provide the best seating for audio and visual quality, and can usually be purchased in advance online. A premium ticket for an IMAX screening today can cost $18.00 or more – especially if you live in NYC according to the New York Times. Or, if you’re attending a movie in LA after 6 PM you’ll typically be shelling out $12.00 bucks. However, getting a little more down to earth, the-numbers.com informs us that the average movie price per person is typically about $10.53 per person in 2023 or around $17.33 for those who don’t mind paying premium prices.
To me, $10.53 doesn’t represent an outrageous increase from the 1995 average (after all, we are talking about nearly two decades later) but it’s all the concession stand extras (with high mark-ups) like soft drinks, popcorn, nachos, candy, etc. that really drives up the cost of a night out at the movies. This is where the actual theater chains (not the studios) seem to make the bulk of their money to remain profitable. Nonetheless, this still begs the original question as to where the money goes from each movie ticket purchased. It was necessary to investigate a number of web sources to find the best, most realistic answers. For a detailed breakdown of how the cash is supposedly divided, the best site is doughroller.net which first stated that going to the movies gets really expensive for a family of four, where the tickets alone can easily run $50.00 – to say nothing of concession items that can easily bring that total to $100.00 or higher. The doughroller site also stated that generally the theatres will get 45% of the ticket sale and the studio that created it will receive 55% of that.
However, these percentages can change considerably depending on the deals worked out between the studios (such as Paramount or Warner Brothers) and the cinema chains (such as Harkins or Regal) for each movie released throughout the year. If the percentages usually worked out as doughroller stated above, this means the theater chain gets $4.50 to pay its employees, providing food, maintain its properties, etc. and the studio which created the movie would get $5.50, which would be broken down in the following ways: $2.11 for advertising and marketing, $1.71 for every other cost (not including salaries of actors) such as locations, sets, various permits necessary to film in a given area, insurance, below-the-line talent such as electricians, carpenters, costume and make-up people, set designers and so forth. Then, there is $1.00 for distribution costs which is mainly about the costs of the prints or reels that need to be sent to each theatre. Finally, $0.68 cents goes to actors and actresses.
When we consider that high profile performers such as Tom Cruise, for instance, have often commanded $20,000,000 per film and/or tens of millions are spent on computer generated special effects for summer blockbusters in the Marvel Universe and other film franchises, then it’s not especially surprising as to why ticket prices keep marching upward to cover these staggering costs. It’s also easy to see why revenue from streaming services and premium cable like Showtime and HBO or ancillary revenue (such as merchandising tie-ins, like toys for kiddie films) is critically important to further generate profits.
Also, for each week that a hit film is on the screens, the producing studio usually gets a bigger take of the box office till, while the theater gets progressively less. This is important to consider since the theater sets the ticket prices, not the studios. All in all, I thought this was a fascinating and worthy subject to research, to always gain a better understanding of how capitalism operates – and as I’m becoming more and more concerned of how I spend my hard-earned income on various sources of entertainment.
