Spending an inordinate amount of money to see a movie at the movie theater happens to be a favorite activity for millions of people. The average price of a movie ticket at the time of this writing is $9.16, but it can be higher depending on if it’s a blockbuster. If you want only to see a movie, you may make it out of the theater with your wallet partially intact, but we all know a movie goes better with food.
In that case, a trip to the concession stand is in order, and it invariably includes a bag of movie popcorn, which costs around $8 for a medium size bag at many large chain theaters. Now, how does this break down into the actual cost of the kernels of popcorn?
About three ounces of kernels make approximately 12 cups of popped popcorn, which is about the size of a medium bag of movie popcorn. This makes the kernels of popcorn at the movie theater around $2.67 per ounce. Popcorn kernels that you can find at the supermarket run around $0.12 per ounce. This would make popcorn in a bag of this size $0.36 if you made it yourself. And for the sake of comparison, filet mignon at the higher end of pricing at $25 per pound costs just $1.56 per ounce and is cheaper than a medium-sized movie theater popcorn.
So why is movie popcorn about 21.3 times more expensive than the equivalent that could be made with supermarket kernels in your home? (Note: The cost for theaters to make popcorn in-house comes out to about $0.90 per ounce, and the markup is still about 789%) Is it because the popcorn is made from special corn seeds that have been cultivated into some rare concoction available only to movie theaters? No, they’re just regular popcorn kernels, just like those you could buy at the supermarket. What makes them different is that they’re attached to a form of entertainment, and it’s how the movie theaters stay in business.
When a theater shows a movie, they have to pay about 70% or more of the ticket price back to the studios that made the movie. On the price of an average ticket, the movie theater keeps about $2.74 to pay expenses. They didn’t pay to make the movie, so it probably makes sense that they don’t reap the lion’s share of the profits. But the theaters still have to stay in business, and they do that by the action at the concession stand.
Theaters get to keep 100% of the profits from their concessions, and this helps pay for the lights, sound systems, cooling, heating, payroll — anything that allows the theater to stay open. So if you paid a reasonable price for a bag of popcorn, which might be a dollar or two, you would end up paying the rest of the cost back at the ticket counter with this business model. This isn’t profitable for the theater owners or the studios. Since a ticket is required to see a movie, but a trip to the concession stand is not, the theaters at least want you to get in the door. It’s your decision if you’re going to indulge in their exquisite popcorn. And that’s what many of us do.
An additional fact about movie theater popcorn:
People not only buy more popcorn when there is a good movie playing, but a sad movie actually boosts popcorn sales over other movie types. Remember that when you’re ready to see the latest tearjerker.
Sources: 24/7 Wall Street, Calculate-This, ABC News, The Hustle, CNN