About the Cinema Industry
Many of our web visitors are people wanting to learn more about the cinema industry for various reasons. This page is to offer some basic information concerning how movie theaters operate, the acquisition of films, and some helpful links.
The Acquisition and "Payment" of Movie Prints
Movie theaters operate in two ways: (1) First run, and (2) Second Run. Films are distributed through "bookers" and these helpful folks setup a relationship between the theater owner and the various film companies distributing their wares. The booker arranges the shipment and booking times for your prints. They will charge a fee, usually per print, for their services.
Once you receive the print and start playing it at the appointed opening time, you are expected to keep records of all ticket sales for that print. You will be sending those records to the film companies on a regular basis during the course of the films run in your theater.
A percentage of each ticket is paid to the film companies for the use of the film in your theater. The percentage amount for first run is usually high the first week (could be as high as 90%) and each week you have the film, the percentage drops. So, the longer you can keep the film, the more percentage of money you can keep for the theater. This is why it is a good thing to have multiplexes which allow you to move the print from the largest auditorium to the smallest, depending upon the current draw of customers. Second run is generally based on a flat fee plus a much lower percentage of the ticket intake.
First run theaters must have enough seats available for ticket sales to make it worthwhile for the film companies to commit one of their prints for that theater. If you plan or have a small theater, you probably will not be able to be a first run theater. Second run cinemas can receive the prints only when the production companies determine the film is officially in the second run category. The more popular a film is, the longer it takes to go to second run.
How do Movie Theaters Make Money?
Since a good deal of the ticket sales goes to the production companies, the profit for the theaters is mostly in, you guessed it, popcorn. Concession sales are the main money maker for cinemas. Other methods include arcade rooms, advertising before the feature, cinema pubs with wine and finger food, and many more creative business ideas. What you use depends upon your area and audience. A nicely presented concession stand is one of the most important features for your theater.
It is always difficult to budget equipment until the general specifications of the cinema are known. For equipment package quotations, the more information we have, the more accurate we can be with prices. Since we offer new, rebuilt, and used equipment, there are many different ways to approach the outfitting of the cinema.
Often a feasibility study is the best way to get a feel for the practicality of your business plans. We do offer basic studies for $1,200.00 which would give suggestions for the number of screens, expenses, operating costs, and projected profit and loss.
Here are some links to assist you if you wish to research further:
Film Journal Magazine
In Focus Magazine
Box office Magazine
National Association of Theater Owners
Digital Cinema Industry Reviews & News