May 19, 2008 10:53 AM
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Tue Feb 9
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Going to the movies is already way too expensive. In Manhattan, two tickets, a large popcorn, and a drink will run you more than $30. And since most movies suck, it's a hefty gamble. But "the price of movie tickets is expected to skyrocket by as much as 30% this year." What? Shouldn't competition from the internet and Netflix be driving the price of tickets down? How the hell can this happen? Besides the fact that Adam Sandler ain't getting any cheaper, this cinematic economic time bomb all comes down to one thing: precious, precious corn.
Ethanol, the stupid fuel that the government loves for some reason, is going to take up 40% of next year's corn crop. Movie theaters make nearly half of their money from concessions, and a third of that money comes from popcorn sales. When concession prices go up, people buy less, "forcing" theater owners to raise their ticket prices. Eye opener:
In an interview with the Los Angeles Times in March, Mike Campbell, CEO of Regal Entertainment, the nation's largest theater chain, conceded as much: "If we didn't charge as much for concessions as we did, the tickets to the movies would cost $20." (According to the MPAA, last year's average movie-ticket price was $6.88.)
Three things immediately come to mind:
1. $6.88 average ticket price? In that case, how about just raising the prices everywhere that people pay $6.88? NYC is over eleven bucks already. Give us a break. Those heartland types probably bring their own corn, anyhow.
2. Considering the fact that "popcorn and soda are already at an 80% markup," how much of an economic imperative is this, really? Theaters can't eat any price increase on an item that's marked up by 80%? How about lowering the price of Reese's Pieces, then?
3. Iron Man was a worthwhile film.
[Read the full, excellent story at Ad Age]
Send an email to Hamilton Nolan, the author of this post, at Hamilton@gawker.com.
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