In the past 5 years, I've probably been to a theater an average of once every two weeks to see a movie. Even though it costs a small fortune, I almost always get a soda and popcorn (topped with "butter"[1]) to go with the show. Many of the larger chains offer a deal if you purchase a large popcorn and a large drink together. This "Super Combo" costs a lot less than ordering a L popcorn and a L soda separately from the menu but often it will actually cost you less than a L popcorn/M soda, M popcorn/L soda, or even a M popcorn/M soda (?!??). Why such a steep discount when the theaters make so much of their money on concessions? I've developed a few theories over the years but would like to hear your thoughts before sharing them.
[1] The proper way to butter movie popcorn is to fill the bag half full, apply butter, fill the rest of the bag and apply more butter. This results in fairly even application of butter to kernel throughout the bag. Due to a lack of focus on service and an increasing number of theaters moving to DIY butter application, it's getting more and more difficult to buy a good bag of buttered popcorn at the movies.
Maybe next time I'll just order a pizza and let the delivery in the fire exit.
1. Purchase popcorn
2. Pour half the popcorn in the trash
3. Apply butter to remaining popcorn
4. Go back to concession stand looking sad
5. Say, "I just tripped and spilled my popcorn. Can you fill it back up for me?".
6. Enjoy.
So you feel good, and they now have $8 of your money instead of just $4 on a soda.
Then enjoy your movie and eventual heart attack.
My theory on the combo nature, though, is that people rarely buy popcorn alone, although they might be tempted to just buy a pop. So it's easier for the folks to upsell you with the combo, since the drink and the popcorn natually go well together, "and it's only an extra X dollars" to get both.
What the combo offers is a perceived value to moviegoers, who may buy a combo when they might not have otherwise. So even though it's cheaper than the smaller selections, the theater is picking up revenue with the Super Combo that it otherwise wouldn't have received.
Also a factor, many theaters have a policy of throwing out unsold popcorn at the end of the night (some will bag it and mix in day-old popcorn with freshly made at the beginning of the shift.) By selling more larges, even at a discount, the theater is able to avoid waste -- which may (I don't know) have to be accounted for on the books as a loss.
My theater would push a combo of: buy 2 medium drinks and one large popcorn and get free raisinettes. Of course, some people bought the popcorn and drinks anyway and refused the candy, in which case the employees ate it (had to be moved out of the drawer anyway to keep inventory on track). We also pushed the upsell of a larger drink for "just a quarter more".
They don't really tell you the reasons, but I do know that popcorn and soda are insanely cheap. I mean, do you know how much they waste?!
Anyway, it probably really is some empirical study that said that when people think they are getting a deal, they buy more even if they don't want/need it. Like you probably won't drink all of the extra-extra large soda, but they got more money off you by charging that extra .25 cents. .25 cents is probably more than that whole amount of soda cost anyway.
As for the guy who thinks he's getting new popcorn when it's from the machine, I hate to tell you, but sometimes that isn't fresh either. Any leftover popcorn from the night before was put in the warmers, and any that didn't fit was put in a giant (previously unused) trash bag so that the popping machine could be cleaned. In the morning the stuff in the bag was put back in the popping machine and maybe one small batch of new stuff was made to mix in, as well as provide that tempting aroma of fresh popped popcorn (which studies have shown people prefer. This is the reason why theaters pop their own corn. Smelling the popcorn generates more sales than when the stuff is bought pre-popped and therefore lacking that smell). But until mid-afternoon, unless it was very busy, you weren't getting new stuff. Sometimes when it was very busy we had pre-made bags of popcorn, but often we made them as we went, and that had little to do with the freshness. Sometimes the stuff in the warmers was just as new as the stuff in the popper--and STILL some people would INSIST on the popper stuff.
We did the buttering though, and I was always more than happy to oblige and fill half-way, butter, then fill rest of the way. In fact this was the way I ALWAYS did medium and large bags, unless someone said "only on top". This method doesn't work well on small bags, as it is too much butter and makes the bag leak.
Oh and I'm not sure how they inventoried popcorn and soda. Certainly they counted the 50 lb bags of kernels and the cases of soda, but so much is wasted for various reasons, not to mention we were allowed all the free popcorn and soda we wanted on the job, that it's probably very hard to tell exactly how much. I think this is why they were sticklers for taking inventory of cups and bags--for this reason we were not allowed to give out extra cups or popcorn bags w/o charging full price--they used these as the main indicator of items sold. This pissed off many people, but if we gave in, we'd hear about it from management. The best we could do was give out tiny dixie cups and cardboard boxes.
Oh and FYI, after seeing what the butter looks like before it goes in the butter warmer/applicator, I NEVER put it on my popcorn anymore. It starts out in this plastic jug in a mostly solid/semi liquid fat state. And if you spill any of it, it takes several scrubbings to get rid of the greasy feel. It's pretty nasty.
As a concessionist there was pressure to sell large everything due to the high margin. At one point I started offering "Purple Combos" which was a large popcorn and large drink for $7.50. The bag and cup were purple and most people never bothered to look at the price board once I did this suggestive sale. The catch was $7.50 is what you paid for a large popcorn and soda no matter what. People thought they were getting a deal though.
When it comes to fast food (and concessions), the cost of the food pales in comparison to the infrastructure necessary to deliver the food to the consumer. If the difference in cost between a small and large Coke or popcorn is negligible, the difference between a small and large fries or a burger and a double cheeseburger is *approaching* neglible. This is why we are seeing portions grow in chain restaurants -- a much greater perceived value at little additional cost. Mom-and-pops and one-offs have to keep up, though increased portion sizes impact them more. It's the Wal-Mart effect. The end is near!
Instructions for Texas, where butter-your-own kiosks and buy-the-large-and-get-free-refills-promotions are present:
1. Buy popcorn.
2. Dump out half.
3. Butter IY.
4. Ask for a free refill.
5. Repeat step 3.
In general the combo is about 2 medium popcorns give or take a few pesos. Although I'm with Kyle here, I'll just order a hotdog or a bag of lays with that movie.
(re: beerzie) Has anyone brought home made popcorn into the cinema?
I've read somewhere that concessions is where the movie theaters make their money, and the high-ticket cost only covers the licensing and marketing costs of the movies themselves. That's a whole 'nother bean counting exercise.
And BTW, anyone notice if you order a value meal at BK, they ask you 'do you want medium or large'... there is a small combo, at a lower price, and their hoping you're too stupid to notice, or question them... yikes
Hope his insights are of some use!
This post has led to an interesting distribution idea for those independent film producers who want to break into the big theatre chains, but don't want to use a major distribution company. As theatres get most of their revenue from the concessions instead of tickets, turn that relationship around. Distribute your film free in digital cinema format (recover production costs by selling sponsorship, previews, and/or prod placement at the start of the film). Just require that the cinema give a free medium drink and popcorn with every pair of tickets. Your customers are happy, they get something free, the theatre is happy, they get the ticket price plus any other concessions sold, and you're happy because you get wider distribution for your film.
It's a thought, anyway.
When I worked at Sony/Lowes Theatres 5-6 years ago, you did get a very small, VERY SMALL commission for selling combos.
Also, when I worked there the sizing scheme was changed. "Small/Medium/Large" became "Child/Regular/Value". Same amount of popcorn/soda, just used some Jedi Mind Tricks to get people away from the smalls and into the values...
So if you price singular items less than say 15-20% price of combo, customer is more likely to take combo. They will loose $/customer If price of M soda/pop is considerably less than that of smallest combo.
This way most will simply opt for a combo, and at the end of the day you get an increase of ~15-20% revenue with same staff hours, machines, promotions, rentals, cups/plates, hydrobill, etc.. All you got to do is sensitively mark the first combo cutoff. Then price all single items slightly lower.
The other two cut corners in order not to spend too much in supplies and make every popcorn kernal, nacho chip and wiener count. In the end, I don't think it made much difference either way -- people come for the movie, not the snacks. And much of what the other guy did was never witnessed by the public, but I bet they noticed the difference.
But I, too, must have popcorn and a Coke while viewing a film. And I only butter if it's real butter (Landmark Theatres) and not butter-flavored coconut oil substitute.
- Download movie onto computer (free or cheap)
- Pop some air-pop popcorn and use molly mcbutter
- Plug computer's "TV-Video out" and Headphone out into TV's aux in
- Watch movie, eat popcorn
Total Cost: very little. Boycott the big chains and create your own movie-going experience!
Or, take five minutes before you go to the theather and pop some popcorn yourself and stick it in your backpack.
Eww don't get me started on the hot dogs. If a lot were sold that day, you were in good shape, but on a slow day, the ones on the grill that were unsold went back into the fridge and were put out again the next day. They looked dark and shrively in comparison to the fresh ones.
Our theater did offer alternatives to the soda--we had two types of tea--regular unsweetened, and a raspberry flavor. We also sold bottled waters. However, despite these alternatives, they didn't sell nearly as well as the sodas. We even had some "healthier" candy, which also wasn't a big seller. Most people seem to like to go to the theater to eat popcorn and/or nachos and drink soda. Eating healthy just doesn't seem to factor in with most people who stand in that concessions line.
Elliot - that's hilarious. My wife and I have a running joke going with the teens that work at our local Dairy Queen. They have three sizes of Blizzards, but when you order one, they ask if you'd like "regular or large." Of course, by "regular" they mean "medium" and ignore the fact there's a small (which is plenty big enough for my tastes). We finally got one girl to admit to us they're trained specifically to "upsell" by asking that way, and we annoyingly make a point of bringing it up every time we visit (she loves it).
A few weeks ago, we stopped in on a busy evening. We ordered the usual (my wife gets the same thing everytime - a small Cookie Dough Blizzard made with chocolate ice cream with added pecans), but neglected to say "small." She asked her usual, and I said, "regu ... OH NO YOU DON'T! I'll take a small, you sneaky thing you." She rings us up, takes our money, then goes to wait on the next person (others actually make the items). She actually winks at me and says "watch this" as the guy steps up. He says, "I'll take a hot fudge sundae, please." She replies, "Regular or large?" He says, "Regular," and it's all the three of us can do to stifle our guffaws.
Shameless.
I am an unrepentant food smuggler! If it all possible, my popcorn is made at home (popped in coconut oil, seasoned with real butter/cheese) and sneaked in with my beverage of choice which may very well be beer so that I am not only violating the rules of a private establishment but also possibly real-live laws.
People like me are probably one of the reasons why prices are so high.
As Andrew says, the theater's cost is not significantly different for large or medium, or even small (remember, you are not only paying for the soda and popcorn but the full economy of the concession stand is part of the pricing for any serving.)
It's all about the image of value. The theater wants you to believe, deep in your heart of hearts, that they love you enough to give you a special deal. And they want other people to see you enjoying that love and thinking that they, also, could use a big tub o' love.
Additionally, promo tubs and drink cups are usually in the large size and that's another factor.
Why anyone at Regal would want to provide patrons with chum to toss at the screen during "The Twenty" is beyond me.
my routine now is to go to a drugstore with a big assortment of candy, there's always one near a big theatre. i bring a big bag, buy a soda and enjoy my cheap snacks in the theatre. sometimes i'll get an icee, since i can't really sneak that in!
speaking of alcohol in theatres, i've been to a few independant ones that serve beer, one even has a kitchen and can make you pizza. (the parkway in oakland, ca.) the theatre in point arena, ca. in mendocino county has a cute little theatre and they make fresh popcorn, with fresh butter, and it's a $1, because it's POPCORN, it costs like 15 cents to make! and the sodas are 75 cents.( and they show good movies. )if any of you are ever up there, i highly recommend it.
Most people I know get quite offended by the smell of hot food in movie theatres, especially of the Chinese variety. It's quite close to odor pollution.
grab a straw and stick it about 3/4 the way into the center of the bag of popcorn. put the top end of the straw under the butter dispenser. fill with butter, then slowly pull the straw out. voila - butter travels thru the whole bag of popcorn.
Why do people find the need to eat and drink whilst watching a film at the cinema anyhow? Isn't the film entertainment enough?
http://www.amishrobot.com/archive/000258.html
As such, I've actually started refusing to go to theaters that refuse to hand out a water.
I remember as a young child how embarassed I was when my dad would bring his own popcorn to the theater. Now I think it's a wise man. ;o)
Also, I've never understood the high prices period. Whenever I go to the $10 theater + $10 concessions, the place is MAYBE a 5th full. Whenever I go to the $2 theater where $5 will get you a large popcorn, soda and bag of candy, the place is nearly always packed. It seems like the latter model is a better way to make money.
This is genius! We've almost got enough buttering tips for chapter 1 of O'Reilly's upcoming Movie Theater Hacks book.
Or due to a lack of theater employees being paid anything more than minimum wage, possibly.
i agree with getting the kid snack pack deal. it has just the right amount of munchies without feeling sick after you finish.
Last week at a Regal in Union Sq, someone ahead of me was holding a large McDonald's soft drink and a brown McDonald's paper bag as he handed the ticket taker his ticket! Nothing was said.
I am beginning to believe that the theaters (or rather their employees) don't care.
I find that even after being aware of how much movie theatres are going to rip me off, they still manage to get away with it. I find that the prices are never properly displayed and what ever I ask for, they always tell me it would be 'cheaper' to go for the bigger deal...we need to break up the duopoly that exists down here in Australia...
The combos here are marginally cheaper (like 25p on £6), so I can only suppose the idea is to make people think they are getting a deal. For popcorn that is pre popped and reheated + coke from a machine, I reckon their profit margin is well over 80%. Which is shocking, but those of us who like the movie experience pay those ridiculous prices. When you consider a movie with coke and popcorn for two is near on £30 and you can get 2 DVDs for that, it'll be daylight robbery.
It'll be interesting to see if the cinemas change as people go less and less and watch more and more at home, with home cinema. Maybe we'll land up with less mass market chains and more niche cinemas like The electric in Nottingham
Here is London BTW.
The percentage markup pr Kg (from base product to end
product to the customer) for popcorn is the highest of any product if I remember correctly. Higher than diamonds and higher than cocaine. Popcorn-corns are extremly cheap to buy in bulk, are legal to transport and processing is cheap. You basically just inflate your product with air and watch the price increase with 1000% or so.
The percentage might not be correct, but The Times showed the value for cocaine as well, and popcorn was way ahead.
I guess the same goes for the soda sold.
So the cost to the seller is probably pretty much the same - say 15p,17p and 20p for the different sizes. In the end the only thing which matter for them is HOW MUCH of your money they get.
So why don't we all become popcorn sellers? Well, to take advantage you need a multiplex. And not everyone got one of those ...
---
"Popcorn" was of course also the title of an early electronic music by Gershon Kingsley (and probably the first example of electronic popular music I heard).
Listen to an extract of Popcorn at AmazonRøyksopp's new album carefully cites Kingsley's "Popcorn" on one of the tracks.
Thankfully, right near me there's a great little indie theater which still has butter for their popcorn. I go there wnenever I can, because real butter tastes a whole lot better than that motor oil stuff at the theater chains.
As for the topic the answer is in the question:
"Why such a steep discount when the theaters make so much of their money on concessions?"
You're still being ripped off. The price is still way above costs. But with the "steep discount" it makes you feel better about your purchase, so it's easier to hand over your money, thinking you got the discount, and get ripped off.
By the way the Brattle still uses fresh popped pocorn and pure melted butter. And thought I used do a little grown inside everythime someone asked, i routinely put butter in the middle for people. It's the place to go for popcorn. And if you don't let popcorn, you can bring food in. We used to laugh at the people carefully hiding their sub sandwiches outside the theater, when they could walk right in with a large pepperoni pizza if they wanted to.
We charge $3 for an adult movie ticket and $2 for students 17 and under. Our movies are usually about a month out from the release date -- we had Betwitched the weekend of the 22nd of July. Our upcoming features are War of the Worlds, Fantastic Four, Herbie (kinda old, but the kids will love it), and Charlie and the Chocolate Factory.
Our concession stand special is a large popcorn (85 ounce tub) and two large sodas (22 oz. each) for $4. The tub costs approximately 20 cents, while the cup and lid costs about 5 cents (6 cents with a straw). A 5-gallon canister of soda is $12 (that works out to 1.9 cents per oz. or 41.8 cents per large cup). Most larger theaters probably use box pop, which is about half the price of canisters, plus a lot less storage and mess. Don't ask my why we don't use box pop -- I can't remember that battle any more -- I think it has something to do with taste. The butter is expensive -- it adds about 20 cents to the cost of each tub of popcorn. The cost of the popcorn is about a nickel per tub. We pop the corn coconut oil, which runs about a nickle a batch. Throw in a penny for a napkin and you're looking at a cost of about $1.42 per special.
This is an extremely low-volume operation. We have between 200 and 300 customers on an average weekend -- we show the movie four times. We also do a little overkill with our popcorn. We pop it in seasoned coconut oil, which is scary fattening, but delicious. You would NOT need to use butter with our popcorn -- in fact the folks in Sioux City who sell it recommend that you don't butter it. However, try telling that to the movie-going public. So, we add butter that we buy from a local dairy farmer. If you know your butter, you know that butter has quite a bit of water in it. To get a really superior popcorn topping you have to remove that water. When you do that, you have butterfat. That's what we use and it's ridiculously expensive. It's tasty, no doubt, but does cut into our profit margin.
I'm not sure how relevant this is for all you big-city folks, but if we can make a go of it, you have to know that the big theaters are making a KILLING.
What usually happens when I go with my family to the local theater, which if you include dates equals 7+ people (my parents like a crowd I guess), is buy the combo with 2 sodas. You get unlimited refills, and the place will give you small tubs so you can distribute the food and drink around. Just hope no one has a cold or anything.
The big problem, with so many people it's usually for somewhat guaranteed good movies, it's hard to get someone to leave in the middle for refills.
The only limitation at The Flicks is that you get a plastic cup before you go in, for the obvious reason that glass cups and darkness don't mix.
1. The official name at most theaters is "extra buttery topping", which must be described as such because it cannot be sold as "butter" when it contains no butter. Interestingly, the word "buttery" is fine because it can mean "resembling butter" (or "unpleasantly and excessively suave").
2. Regarding the pricing equation, it's simple: Both soda and popcorn are so cheap that the paper containers which hold them are almost more expensive than the contents. As such, how much consumable content goes inside of each doesn't really matter much to the theater. It's all about raw gross cash intake. To maximize raw gross cash intake, you do everything possible to encourage the purchase of *both* food and drink. This takes the form of the "deep discount combo".
And to think all I learned from working in a movie theater was how to fake illnesses...
As noted by someone already, the US. The independent theater in Shepherdstown, WV sells beer and wine. In a glass no less. They also sell real butter and the popcorn is popped *nearly* to order and butter half-way up. All sodas come in bottles -- no fountain.
In France it is generally possible to have a beer at the cinema. (I've not noticed lately where it is not.) It would also be illegal to call what is sold in most cinemas as topping for popped corn, "butter". (They don't butter their popcorn anyway; it's in two bins, salted or sugared. It is often very nasty stuff.) Portions of everything have started to grow to match the efforts in the US.
Let's look to the bottom line though. Absurd sums of money are being spent to make many films today (although this not need be the case; we regualrly go to cinemas showing classics and it is amazing what one can do in making cinema with little). Theaters are often running films to empty seats. That tickets are incredibly expensive and are being noted above as just covering costs is pathetic. I keep waiting for the entire system to come crashing down.
Customer: I'll have a Coke, no Ice.
Bartender: You do realize the ice costs us more than the Coke?
(And I wasn't the customer, honestly.)
AMC Entertainment annual report, 2001
"Revenues for the Company are generated primarily from box office admissions and theatre concessions sales which accounted for 67% and 28%, respectively, of the Company's fiscal 2001 revenues."
Survey of Exhibition Industry Practices, 9 December 2002
"The London-based publication Screen Digest recently completed a sophisticated report on cinema concessions sales worldwide. They estimate that concessions accounted for 20% of the gross revenues of U.S. exhibitors in the year 2000. They further estimate that those sales accounted for approximately 40% of profits."
UK government Culture, Media and Sport Committee, 17 June 2003
Search for "cinema opened" to find the bit where Stelios Haji-Ioannou talks about opening his new chain of budget cinemas in the UK, and the financial costs.
Moviegeek: Why is popcorn so expensive?
A more general, anecdotal piece.
How Stuff Works: How Movie Distribution Works: The Need for Concessions
CNN: How a movie theater makes a buck
Many times the super sized cups and bags are branded by advertisers. It might only cost you an extra $.25 to upgrade, but the theatre actually pays less per transaction if you use a branded/subsidized container.
More sales also improve their exposure numbers thus making it easier to sell in other partners for more money.
not as impressive as the dude with the pizza.
Except that everyone knows bottled water is bought by rich people like myself, who are more willing to spend the big bucks.
As a sidenote: popcorn and other snacks in cinemas are equally expensive here as in the US and buttered popcorn is not sold here.
The cover graphics looked professionally made, and they were shrink wrapped and stamped with a price. I understand this is normal for Hong Kong or NYC, but in San Jose?
I think they keep raising the price of popcorn and drinks because less people are paying to see the movies.
This thread is closed to new comments. Thanks to everyone who responded.

