Why Many Movie Theaters Make More Money On Snacks Than Tickets

For many people, a trip to the movie theater absolutely must include hitting the concession stand before the trailers start. And you'll do this knowing that you'll be shelling out a good bit of cash for a delicious tub of buttered popcorn (which always tastes better at the movie theater). If you've ever wondered why popcorn is so pricey at movie theaters, there are a few reasons. Basically, it comes down to the movie theater's economic survival.

According to data collected and analyzed by The Numbers, the average price of a movie ticket in the United States is $11.31. However, the theater doesn't get all that money. In fact, it only gets around 40% of the profit with the movie studio taking 60%. (This is just the average since the studio and theaters negotiate the cuts for each film.) With a smaller take at the box office, theaters have to find other ways to make more money, and concessions are one way of doing this. 

The profit margin on concession sales is considerably higher for movie theaters, standing at around 85% for items like soda. What's more, the average customer actually spends more on concession items than they do on tickets. A 2023 survey by Casino.org found that the average American spends $16.43 on concession items, making concession items many theaters' main source of income. 

While movie theaters stand to earn a decent amount from pretty much all concession items, popcorn is by far the theater's definitive and most lucrative snack. It costs less than $0.50 to make a serving of popcorn, but when the movie theater staff scoop it into a bucket with a squirt of butter-flavored oil, it can come to you with as much as a 1,275% markup. One of the main reasons movie theaters can get away with this huge markup is that customers are captive audiences; there are no other places to get snacks so customers either have to pay the high prices or go without.

Before you think movie theaters are making money hand over fist, it is important to note that these businesses usually have an overall profit margin of around 4%. This is because a lot of the profit made from concessions is used to pay overheads like rent, wages, and electricity. So, if you want your local cinema to continue to thrive, leave your store-bought candy at home (even though it is not illegal to bring snacks into theaters), and buy yourself a tub of that delicious popcorn.