Reasons Why Movie Theater Food Is So Expensive

In today's world of endless streaming platforms, where Oscar-nominated directors now produce Netflix-exclusive films, you're more likely to hang on the couch at home then spend a night out at the cinema. Who wants to bother with getting dressed and finding a parking spot, anyway? But when you do venture out for a movie at the theater, it doesn't take long to remember that there's still nothing quite like the old school magic of the movie-going experience. 

It's the excitement of waiting for the lights to go down, the boom of speakers, and the act of taking in a story on the big screen with a shared audience. And is there any food more synonymous with an experience like freshly made popcorn at the movie theater? Even with a classic dinner and a movie date night combo, the strong scent of buttered popcorn at the box office is enough to make anyone's mouth water. And while we'd never condone lining your pockets and purses with dollar store candy and snacks, it can be pretty tempting to do exactly that once you take a look at the high menu prices for movie theater food. So, why exactly is movie theater food so expensive? There are actually quite a few reasons why movie theater food costs as much as it does.

Ah yes, inflation, the great equalizer of money and price discrepancies. We've all had the older relative complaining about increased gas prices that once "only cost a nickel" back in their day. Or if you're lucky enough yourself (depending on your perspective) you may be old enough to have noticed market shifts in some of your favorite industries, like fast food, craft alcohol, or even general grocery store prices.

Just like any other market, movie theaters are not immune to the effects of economic shifts. In the last 20 years alone, the average cost of a movie ticket has more than doubled. In 1990, movie tickets were priced at around $4.22, while in 2019 the average cost of a ticket reached $9.16. And depending on where you live or what movie theater you prefer to see movies, that price can definitely be even higher. And just as movie ticket prices have increased over time, it is just as plausible that concession stand prices would also steadily climb right along with them.

While movie ticket prices have certainly climbed upwards alongside concession stand items, it's still not quite at the same level. But why is that? Wouldn't it make the most sense for movie theaters to simply raise the price of admission, guaranteeing more money up front even if only half of all customers actually purchase food? Economist Ron Baker explained that by not setting the bar for entry too high, movie theater owners are actually able to segment their customers with a "two-part tariff" pricing strategy. It's the equivalent of paying an upfront cost for the opportunity to then purchase a product.

Customers like students and senior citizens are usually less likely to spend, and in most cases, receive some sort of up front discount to begin with on their tickets. However, "the theater owner doesn't want to turn these customers away, and hence keeps the box office price lower by charging higher prices to snack eaters," said Baker in a post on his company's blog. "What you are really buying when you purchase a movie ticket is an opportunity — a chance to enjoy the movie, or to enjoy it with popcorn."

So, how did movie theaters and movie studios end up coming to terms on a split for ticket sales? For a long time, it was actually pretty one-sided. In the early days of cinema, studios actually owned most of the movie theaters in one way or another. It allowed them to not only distribute movies to whatever areas they wanted, but to charge whatever they wanted as well, maximizing total profits for the studios. Years of antitrust lawsuits from independent filmmakers like Charlie Chaplin helped to chip away at the issue, until finally the U.S. Supreme Court stepped in. In 1948 the United States V. Paramount helped to break up the studio's monopoly on the industry, opening the doors for more independent producers and movie theaters to have a chance to get in on the action.

But, interestingly enough, over 50 years later the outcome still affects how movie theaters and movie studios split profits. While most movie theaters and studios agree to around a 60-40 split in favor of studios, there are still some contingencies left over from 1948 that create an interesting angle. The studio still receives the majority of ticket sales in the first few weeks of a movie's run, sometimes up to 95 percent of the gross ticket sales, falling steadily each week after. Given the short end of the deal movie theaters are getting in this case, it feels like you're actually supporting the underdog with that $14 nacho plate.

Even the best movie theater snack bars could use an upgrade, especially as general movie theater attendance has fluctuated in recent years. Now the addition of alcohol is adding an interesting wrinkle to movie theater concession stands. And why wouldn't it? In one of the early scenes of Quintin Tarantino's Pulp Fiction, John Travolta's character, Vincent, explains to Samuel L. Jackson's Jules some of the subtle differences between America and Amsterdam. One of the first examples he gives, along with the classic "Royale with Cheese" line, is the opportunity to buy a beer in European movie theaters. "And I don't mean in a paper cup," he says. "I'm talkin' 'bout a glass of beer."

In 1994, beer in a movie theater was just a fantasy. Now, it's a potentially game-changing aspect for both customers who want to enjoy a film with a cocktail, and movie theaters looking to maximize their profits. AMC Theater VP George Patterson was quoted in a 2017 CinemaBlend article, calling alcohol the industry's fastest-growing amenity: "Dollar for dollar, alcohol doesn't cannibalize candy, soda or popcorn," he said. "If I put a bar in, I can almost guarantee my food and beverage revenue will go up. Over 70 percent of our guests are over the age of 21."