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Author
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Topic: "Price Of Movie Popcorn To Jump"
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Jim Cassedy
Phenomenal Film Handler
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Posts: 1661
From: San Francisco, CA
Registered: Dec 2006
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posted 03-18-2008 09:31 AM
Oh Noooooo: "Movie Popcorn Prices To Jump"
John Horn / Los Angeles Times Monday, March 17, 2008
LAS VEGAS -- Global warming has had a strange effect on Hollywood, such as stars trading in their sports cars for hybrids and Al Gore hoisting an Oscar. But its latest effect might also be its corniest.
As a consequence of the booming demand for alternative fuels -- with farmers replanting acres of popcorn with more profitable crops that can be converted into ethanol and other biofuels -- the sellers of the nation's favorite movie snack say the salty tub soon will take a bigger bite out of your wallet when you're at the multiplex.
"The consumer will probably see an increase in popcorn prices pretty soon," said Carlton Smith, the chairman of Iowa's Jolly Time popcorn brand. While the price hike probably will be modest, perhaps no more than 15 cents a serving, the rise is inevitable and necessary, according to the popcorn providers and theater owners gathered here for last week's ShoWest, the annual convention of the National Association of Theater Owners.
Movie audiences have long complained that pricey concessions -- along with chatty moviegoers, in-theater advertising and the low quality of many new releases -- have made watching movies at home often more attractive than going to theaters. While box office grosses are rising because of higher ticket prices, with 2007's take totaling $9.6 billion, annual admissions are essentially flat, hovering around 1.4 billion tickets sold each year.
But if audiences worry that movie snacks are too expensive, they need to know those $5 buckets of popcorn is what keeps the average national admission price around $7.
"If we didn't charge as much for concessions as we did, the tickets to the movies would cost $20," said Mike Campbell, chairman and chief executive of Regal Entertainment Group, the nation's largest theater chain with 6,300 screens.
Concession sales are a theater's lifeblood, accounting for as much as 45 percent of profits at the nation's largest chains. Popcorn offers one of the biggest returns on investment for exhibitors, because the unpopped kernels used to make an entire bucket of popcorn cost just a few pennies.
But the price that the mostly Midwestern farmers are charging for raw popcorn has doubled in the past two years, and the wholesale fees popcorn providers are charging theaters is starting to climb almost as fast. Fans of microwave versions might notice a markup as well.
A year ago, a theater operator buying a 35-pound bag of Orville Redenbacher's Gourmet Popping Corn paid $7.50. At the 2008 ShoWest convention, it has climbed to $10.17, said Mike Donahoe, a national sales manager for Minnesota's ConAgra Foods, the country's leading theater popcorn manufacturer. "And I don't see it getting any better."
Despite the country's voracious appetite for popcorn -- Americans consume 4 billion gallons annually, or about 13 gallons a person, according to the Popcorn Board -- it is hardly one of the nation's biggest crops.
Norm Krug, the chief executive of Nebraska's Preferred Popcorn, said about 240,000 American acres are planted with popcorn, while 77 million acres are planted with seed corn, which is generally a less fickle variety and consequently easier to grow.
With the demand for seed corn rising, so has its price, which in turn drives up the price of popcorn. Two years ago, a farmer charged about $10 for 100 pounds of popcorn. Today it's about $20. "The farmers are in the driver's seat, definitely," said Jolly Time's Smith.
Source: http://www.detnews.com/apps/pbcs.dll/article?AID=/20080317/ENT02/803170330
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Monte L Fullmer
Film God
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Posts: 8367
From: Nampa, Idaho, USA
Registered: Nov 2004
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posted 03-19-2008 01:46 AM
When Cineplex Odeon was around, they did have the surcharge for extra butter..two free squirts and 25 cents thereafter on any size, plus would charge sales tax on top of the completed sale-not included in the sale as most theatres would do..
...and it was a mandantory upsale speech from the concessionaire to ask the patron to suggest extra butter ... and this was all back in the late 80's til they went under ...
Actually, Mr. Campbell of REG is dead right for the aggregated percentages of the film percentages that the studios take along with security deposits, plus the theatres are responsible for paying their own taxes which is taken out of the total tix price, there has to be a way to keep their business going in the limited selling time that theatres have-they're not like an Albertsons, or other huge grocery chain that can sell food items 24/7/365 a year, why they need to make at least a 20% profit each day to have an operating buffer..
This is why conc prices are high as they are since the theatres are in the business in showing movies, not in selling conc items.
-Monte
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Sean McKinnon
Phenomenal Film Handler
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Posts: 1712
From: Peabody Massachusetts
Registered: Sep 2000
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posted 03-23-2008 10:23 AM
I think one thing that Mr. Campbell is missing here is that if theatres didnt sell concessions you would lose a lot of your over head even if not totally eliminated some things could be drastically cut back like;
Concession Staff, Usher Staff, Stock, Concession equipment, uniforms, cleaning supplies, overnight cleaners, managers, POS equipment, lobby square footage, im sure there are more things that I am missing
Point is that while you would have to raise your ticket prices and while the studios do take a percentage of that you also lose a lot of operating costs maybe not enough to completely offset the extra money the studios are taking but probably enough to keep ticket prices lower than twenty dollars.
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