How does multiplex theatre work

The distributor leases out the movie to theaters that promise to return a percentage of ticket sales. This percentage of this profit sharing scheme changes over the life of the lease. But who goes to see a movie four weeks after its release? This leaves the theatres with no option but to raise ticket prices and charge as much as they possibly can get away with at the concession stand.

However, it's not all about the popcorn. Theatres also make money the same way magazines, radio stations, and websites do: by selling ads. The local advertising that shows before the movie begins generates a good percentage of revenue for the theater. As for the previews, the studios give trailers to theaters, and pay for each showing based on the number of people who saw them. Per a theater owner in Long Island, "we have to call in our numbers every night to the film companies, and they give you 'x-amount' per person.

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At present, the total revenue of the Indian film industry is Rs. But do you know that how Box office collection is calculated? If not, then read this article to understood that how the total collection of a film is calculated. Box Office-. This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy.

From a distance, the movie business might look pretty glamorous. Celebrities and producers glide down red carpets, clutch their Oscars, and vacation in St. Barts—just because they can. While there's a lot of money to be made in the film industry, the economics of making movies are far from simple. The public can be fickle, and the industry is in flux.

Just about any movie is an extremely risky investment, even a film starring big-name actors and actresses. It is not nearly as straightforward as the early days of cinema when a movie would come out in theaters, make the vast majority of its revenues via ticket sales, and then disappear. Major studios and indie filmmakers alike now spend much of their days looking for new sources of revenue, because ticket sales are no longer the be-all and end-all for films. Unfortunately, the closing of most theaters during early makes other streams of income more important than ever.

This mystery arises in part because it costs far more to make and market a movie than most people expect. Once you factor in marketing and advertising costs , the budget spikes.

Romantic comedies or some children's films need to promote themselves via TV commercials and media advertisements, and those costs add up quickly. For any type of film, whether a blockbuster or an indie production, things like tax breaks and revenues from product placements can help pay the bills. If they're given an incentive to shoot a film in Canada or Louisiana, producers will usually hustle to do so. Still, there are a few tried and true ways to make money from films.

Theater attendance has been challenging over recent years, making it even harder for studios and distributors to profit from films. Usually, a portion of theater ticket sales goes to theater owners, with the studio and distributor getting the remaining money. Traditionally, a larger chunk went to the studio during the opening weekend of a film.

As the weeks went on, the theater operator's percentage rose. The percentage of revenues an exhibitor gets depends on the contract for each film. Many contracts are intended to help a theater hedge against films that flop at the box office. That is achieved by giving theaters a larger cut of ticket sales for such films, so a deal may have the studio getting a smaller percentage of a poorly performing film and a higher percentage of a hit film's take.

You can see the securities filings for large theater chains to see how much of their ticket revenue goes back to the studios. Studios and distributors generally make more from domestic revenue than from overseas sales because they get a larger percentage.

Despite this arrangement, foreign ticket sales became more important in the early 21st century. That is part of the reason why you see more sci-fi, adventure, fantasy, and superhero movies. Action and special effects require no translations. It is much harder to build a foreign audience for an indie comedy. It all started with Star Wars. Since the George Lucas sci-fi saga began back in , the franchise has made billions in revenue from toys alone, not to mention licensing income from other third-party companies.

This strategy obviously doesn't work for every film. You don't see a lot of action figures for romantic comedies. However, merchandising is a cash cow for big-budget films that appeal to kids and Comic-Con fans alike. On the other hand, some analysts suggest remaining on the lookout for movie fatigue.