Tag Archives: Movies

Is the movie business a tenth the size of the TV business?

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How much do movie tickets cost (on average)?

$8.38 at the theatre.  However we also have to watch ads, which account another for 7% of revenue ($.61), so $8.99 total. At 110 minutes per movie, movies cost  $4.90 per hour.

However unlike TV, only 13% of us watch a movie in a theatre every month. In the USA+Canada 1.36B tickets were sold for $10.8B. With a potential audience of 332M, that’s 4.1 tickets per person per year. The average USA/Canadian spends $3 per month on movie tickets. The average frequent (1 or more movies per month) moviegoer spends ~$12 per month.

Question: Is the movie business one-tenth the size of the TV business?
Answer: No*. In the USA we spend $10B on movies and $140B on TV so it’s only 7%.

*However, if we add in movie rental, sales and subscription service revenue … [future post]

Interesting that movies ($3 or 40 minutes/month) get so much Media attention and TV (~100 hours and $50/month) so little…

Bonus question: I can get a season pass to the ballpark. Why can’t I get a season pass to the movie theatre?

Since all-you-can-eat (e.g. Netflix) is the optimal (maximal revenue) media business model, why don’t theatre owners offer it?

With the typical theatre holding 225 seats, a fraction of the 20,000+ of a sports stadium, theatre owners must ration seats and spread out demand over several weeks. Unlike the steady demand for sports tickets, movies draw the largest audience in the first weekend and smaller audience after that. Theatre owners would like to increase revenue through (all-you-can eat) subscriptions, but keen movie fans don’t want passes that deny them from watching when the movie is most in demand. Nor do wall-sized movie displays offer any advantage to the closest seats, unlike live performances.

Over the past 100+ years, theatre owners have learned to optimize revenue with all-you-can-eat soda and popcorn, but don’t sell the tickets to seats this way, as the number of seats (unlike soda and popcorn) can’t be super-sized at near-zero cost.

Answer: Despite the problems listed above, MoviePass is trying to offer ‘Unlimited Movies” for $29.99 per month, a safe 10x ‘normal’ ARPU (average revenue per user).