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" for the 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.
The equipment.
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.
Feasibility.
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.
Links.
Here are some links to assist you if
you wish to research further.
Film Journal Magazine
www.filmjournal.com
In Focus Magazine
www.infocusmag.com
Box office Magazine
www.boxoff.com
National Association of Theater Owners
www.natoonline.org
