17 janvier 2012

Cinema admission pricing in USA (1929-2002)

Source: Uniform prices for differentiated goods: The case of the movie-theater industry (Barak Y. Orbach, Liran Einav; 2007; International Review of Law and Economics [PDF]

UNIFORM PRICES FOR DIFFERENTIATED GOODS: THE CASE OF THE MOVIE-THEATER INDUSTRY (Liran Einav, Barak Y. Orbach; Discussion Paper No. 337; 10/2001; Harvard) [PDF]

The Exhibition side gets the largest share (45%) of the ticket money, but they only bank locally, on however many spectators come to their cinema house ($3.4 multiplied by the auditorium capacity, multiplied by the number of shows per day, multiplied by the days it will be running) and they have many expenses/bills (real estate, upkeep, services, clerks, heating/air-conditioning, electricity...). Though they do make at least as much profit from concession stands and commercial space.
Meanwhile the Production side (in red) is split between various departments, but they bank globally on ALL spectators EVERYWHERE the movie has been screened. 
Also, the advertising gets the largest share (21%) but they have a huge investment to pay back, just like the Set production (in today's practices, the advertising budget for blockbuster movies goes between a third and a half of the total movie budget). And they have to split the benefits between a large team of employees. The Distribution's share is smaller (only 11%) but the cost of printing (or DCP Digital Cienma Package nowadays) and shipping is smaller (they also RENT the rights to project a film to exhibitors). 
The actors get only 6% but their investment is null and they bank it ALL for themselves.


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