Business Model Of A Cinema Theatre

On a broader stroke, the fine line that every country has little variations in their local market either selling or buying. But most of the theatres share their ticket revenue details with the film distributors wherein the deal for each film may vary. On the other side the calculation can be done so easily that there will be at a minimum of 50 % on each ticket – in which it will be going to the distributor.

Cinema Theatre

Sharing between the film distributor and theatre management

In earlier day calculation, the majority share will be going to the film distributor and for the theatre management’s favor will depend on the number of shows and longer the days of show running. For some cinemas that get released out with no track records of attendance, there will be flat rate at minimum payment in which it also depend upon the market requirements and the title in the locality. Legacy Cinema LCI 98 is actually very open towards income tax department and keeps its records transparent in order to maintain the reputation.

Typical Costs

  • Staff
  • Building (own/rent/lease, heating, garbage disposal, property tax)
  • Water management
  • Power supply
  • Media server and Projectors
  • Sound system and Audio treatment materials
  • Show floor maintenance
  • Screen and Chairs
  • Raw concession
  • Business costs (POS systems, book keeping, payment costs, banking costs)
  • Signage and advertising

Typical Revenue

  • Concession profit
  • Ticket revenue (50% or less than/equal to)
  • Advertising revenue (on screen and before screening)
  • Rental profit (for special events)

When considering actual breakdown, the calculation will be wildly different. In the era of digital age, the above discussed typical revenue and typical costs will range at numbers triple the times right from the current dollar value. However there will be visual print charge for financing products that to help theatre management to bear the costs indeed.

Other calculation methodology

Most of the theatres in the United States of America often attempt napkin method of calculation. It is of keeping one screen for show open which costs averagely around 2000 dollars in an overhead week; hence movie theatre such as Legacy cinema LCI – 98 would have overhead costs of 18000 dollars a week.

For instance if the ticket price of 10 dollars calculated for 50% for each ticket, it require to sell at a minimum of 400 tickets per week, and per screen. Or else to break down even, the theatre management let alone have to pay down for the start up cost or pay own-self for venue operation. As an understanding concept, that many theatres have the chance of losing pennies on ticket sales itself and sometimes the profit can be saved by special considerations, advertising and special events et al.

Chain theatres

There are one another profit generating technique is that chain of theatres. In most of the cities, a single brand of cinema theatre do have chain series, in which some may with multi-screens or some may single screen. Anyways most of the independent cinemas have restricted limitation of classic titles, in which second run titles as an unwritten law are reserved for multiplex screens.

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