Quicklinks: Summary, products and services | Data | Income and profitability | Expenses | History, strategy and challenges
Summary, products and services, market
Summary
The movie theatre business in the United States is a highly competitive industry with a large number of players. The top four movie theatre chains in the United States are Regal Entertainment Group, AMC Theatres, Cinemark, and Carmike Cinemas. These four chains account for approximately 30% of all movie theatre screens in the United States. So how does and movie theatre business make money?
The industry is fragmented with many small, independent movie theatres accounting for the remaining 70% of screens. The industry is driven by ticket sales, which are influenced by a number of factors, including the release of new movies, the availability of alternative entertainment options, and the state of the economy.
Movie theatre chains compete for market share through a number of strategies, including pricing, promotions, location, and amenities. The movie theatre business in the United States is expected to continue to grow in the coming years. The industry is forecast to generate $11.4 billion in revenue in 2020, up from $10.9 billion in 2015. This growth is being driven by a number of factors, including the increasing popularity of moviegoing, the expansion of movie theatre chains into new markets, and the continued growth of the US economy.
What products or services are typically provided by movie theatres?
Movie theatres in the United States typically provide a variety of services, including ticket sales, concessions, and restrooms. They may also offer a variety of amenities, such as reclining chairs, reserved seating, and online ticketing. Some movie theatres also offer food and drink service, and some even offer full-service restaurants.
Is the movie theatre business typically B2B or B2C?
The movie theatre business in the United States is typically B2C. This is because movie theatres sell tickets to consumers who want to see a movie. Movie theatres may also sell concessions to consumers, such as popcorn and candy.
Describe the market operating environment
The movie theatre business in the United States operates in a highly competitive environment. The top five movie theatre chains in the United States control approximately 60 percent of the total box office revenue. The remaining 40 percent of the box office revenue is generated by independent movie theatres and smaller movie theatre chains. The average ticket price for a movie theatre in the United States is $8.97. The average cost of a movie ticket in the United Kingdom is £7.21. The movie theatre business is also highly seasonal, with the majority of box office revenue being generated during the summer months.
The top five movie theatre chains in the United States generate approximately 75 percent of their total annual box office revenue during the summer months. The movie theatre business is also highly cyclical, with box office revenue typically peaking during the summer months and then declining during the fall and winter months. The movie theatre business in the United States is also subject to a number of external factors, such as the overall health of the economy, the performance of the stock market, and the level of consumer confidence. These factors can have a significant impact on the demand for movie theatre tickets and the box office revenue generated by the movie theatre business.
What industrial sector is the movie theatre business in the United States part of? (Describe this sector)
The movie theatre business in the United States is part of the entertainment industry. This industry includes businesses that produce and distribute movies, television shows, and other forms of entertainment. The entertainment industry is made up of four main sectors: film, television, music, and live entertainment. The film sector includes businesses that produce and distribute movies. The television sector includes businesses that produce and distribute television shows. The music sector includes businesses that produce and distribute music. The live entertainment sector includes businesses that produce and distribute live events.
Describe the three most successful companies in the business
The three most successful companies in the movie theatre business in the United States are AMC Theatres, Regal Entertainment Group, and Cinemark Holdings, Inc. These companies have been in business for many years and have built up a large customer base. They offer a variety of movie-going experiences, from traditional theaters to luxury theaters with reclining seats. They also offer a variety of concessions and have a loyalty program that gives customers discounts on tickets and concessions.
Data
[table id=1 /]
Expenditure: typical costs and percentage of spend for movie theaters
- Operating and maintenance costs: 30-50%
- Staff salaries and benefits: 20-30%
- Utilities: 10-20%
Pricing: Typical pricing of products and services for movie theaters
- Average ticket price: $9
Profit: Typical profit margins for water parks
- Bottom of range: 15%
- Top of range: 30%
Income, pricing and profitability
(AKA… how do movie theatres make money?)
What are the top three sources of revenue in the movie theatre business? Roughly what percentage of revenue does each contribute, as a range?
The top three sources of revenue in the movie theatre business in the United States are ticket sales, concessions, and advertising. Ticket sales account for the majority of revenue, typically around 60-70%. Concessions typically account for around 15-20% of revenue, while advertising typically brings in around 5-10%.
Pricing strategy: What are average prices? How does the market and competition affect this?
There are a variety of pricing strategies employed by movie theatres in the United States in order to maximize profits and stay competitive in the market. The average ticket price for a movie in the US is around $9, but prices can vary depending on the location, time of day, and day of the week. Movie theatres typically charge more for tickets on weekends and evenings when demand is higher. Discounts are often offered for matinee showings and for children, seniors, and students. Competition is a major factor affecting pricing strategy in the movie theatre business. Movie theatres must be mindful of the prices charged by their competitors in order to stay competitive and attract customers. Many movie theatres offer loyalty programs and discounts to frequent customers in order to encourage repeat business.
What are the profit margins in the movie theatre business?
There is no definitive answer to this question as profit margins can vary greatly from theatre to theatre and depend on a number of factors, such as the location of the theatre, the type of films shown, and the prices charged for tickets and concessions. However, a recent study by the National Association of Theatre Owners found that the average profit margin for movie theatres in the United States was around 15%, with some theatres reporting margins as high as 30% or more.
How profitable are companies in the movie theatre business in the United States
Movie theaters are generally profitable businesses in the United States. However, there are a number of factors that can impact a theater’s profitability, including the number of screens, the location, the type of movies shown, and the cost of operating the business. On average, a movie theater in the United States has between eight and twelve screens. The average ticket price is around $9.00, and the average concessions sales are around $4.00 per person. All this at an average cost to operate a movie theater around $1.50 per customer, which includes the cost of rent, utilities, and staff. The most successful movie theaters are typically located in major metropolitan areas, where there is a higher demand for movie theaters. Theaters that show a mix of popular movies and independent films tend to be more successful than those that only show one type of movie.
What surprising way do companies make money in this business?
In the United States, movie theatres make money in a variety of ways. One way is through ticket sales. Movie theatres typically charge between $8 and $12 per ticket. Another way is through concessions. Movie theatres typically sell popcorn, candy, and soda at inflated prices. For example, a small popcorn at a movie theatre may cost $5, while the same size popcorn at a grocery store may cost $2. Finally, movie theatres may also make money through advertising. Movie theatres may sell advertising space on their screens before the movie starts.
Expenses
What is the cost to build a movie theatre business in the United States
The cost of building a movie theatre business in the United States can vary greatly depending on the size and location of the theatre. A small theatre in a rural area may cost as little as $50,000 to build, while a large theatre in a major city could cost upwards of $10 million. The average cost of a movie theatre business in the United States is $2.5 million.
What is the staffing cost for a movie theatre business in the United States
The staffing cost for a movie theatre business in the United States can vary greatly depending on the size of the theatre and the number of employees. Generally, a movie theatre will need at least one employee per screen, and possibly more depending on the size of the theatre and the number of customers. The cost of wages and benefits for employees can range from $5 to $15 per hour, depending on the state and the type of position. In addition to wages, movie theatres will also need to budget for employee training, uniforms, and other supplies.
What are the top three ongoing expenses for a movie theatre business in the United States and what percentage of overall expenditure does each of these represent?
The top three ongoing expenses for a movie theatre business in the United States are film rental fees, labour costs, and marketing expenses. Film rental fees typically account for around 40% of overall expenditure, labour costs around 30%, and marketing expenses around 20%.
In-depth
What is the history of the movie theatre business in the United States
The first movie theatre in the United States was the Nickelodeon, which opened in Pittsburgh in 1905. The Nickelodeon was a small, simple theatre that showed short films. It was very popular, and soon there were Nickelodeons all over the country. The Nickelodeon era ended around 1915, when the first large movie theatres, called “movie palaces”, began to be built. These movie palaces were much more elaborate than the Nickelodeons, and they showed longer films. They quickly became the most popular places to see movies. Today, there are movie theatres of all sizes and types in the United States. Some are very small, independent theatres, while others are large multiplexes.
What business strategies are used by companies in the movie theatre business in the United States
There are a variety of business strategies used by movie theatres in the United States. One common strategy is to offer discounts and promotions in order to lure customers into the theatre. This may include offering discounted tickets on certain days of the week or giving away free popcorn with the purchase of a ticket. Another strategy is to offer a variety of concessions and snacks for sale in the lobby, as this can be a significant source of revenue for the theatre. Additionally, many theatres now offer online ticketing and reserved seating in order to make the movie-going experience more convenient for customers.
What recent challenges have been faced by companies in the movie theatre business in the United States
The movie theatre business in the United States has faced several challenges in recent years. One of the most significant challenges has been the rise of streaming services such as Netflix and Amazon Prime, which have led to a decline in movie theatre attendance. In addition, the COVID-19 pandemic has had a major impact on the movie theatre business, as many theatres have been forced to close their doors due to government restrictions. As a result, many movie theatre chains have filed for bankruptcy, and it is unclear what the future of the movie theatre business will look like.
What dramatic events have recently been faced by companies in the movie theatre business in the United States
The movie theatre business in the United States has recently been faced with a number of dramatic events. Firstly, the COVID-19 pandemic has resulted in the closure of many movie theatres across the country. This has had a significant impact on the business, with many theatres struggling to stay afloat. Secondly, the rise of streaming services such as Netflix and Amazon Prime has also had an impact, with many people choosing to watch movies at home rather than going to the cinema. This has led to a decline in ticket sales and has put pressure on movie theatres to adapt their business models. Finally, the recent increase in gun violence in the US has also led to some movie theatres increasing security measures, which has been costly for many businesses.