The Popcorn Mafia

 

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I recently went to a mall to watch a movie along with my family members. Everyone reached the theater in the mall on time after parking the car (by paying an exorbitant parking fee) and somehow we managed to find some space in the elevator and reach the top floor (Cinemas). Then we rushed in with our tickets (booked online: Meaning collected the tickets at the counter) and after all the washroom dressing/ refreshments we managed to sit in our seats.

The Vicco Cream ad (the one with Rakul Preet Singh) was going on in the screen. Then we sat at the front rows; the 3rd row to be precise as the rows behind costs very high. We were an entourage of 6 members, all geared up for the latest block buster. I always feel happy to reach the movies on time when the ad is playing because I love watching the movie from the beginning. By the interval time all of us were hungry and we wanted to eat something, as we had traveled for an hour in traffic. (Hint: Bangalore’s traffic).

So I went to order some popcorn, our all time favorite during movies. I usually don’t buy anything in a mall while watching a movie, but this was different as we did not eat anything before the movie. The moment I saw the illuminated sign board, I was gasping for breath. The cost of popcorn, cool drinks or even water was charged very high.

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This is the situation happening in malls/ multiplexes.  Apart from prices of movies and parking being exorbitant, what was too shocking and alarming was the cost of popcorn. They can charge Rs. 20, Rs.30, or Rs 40, for small medium and large respectively, but that is not gonna happen folks.

Size of Popcorn Original cost  Cost in a Mall Profit
Small 10 150 140
Medium 15 180 165
Large 20 220 200

Assumptions:

  • 200 seats in a movie hall
  • 140 on an average seating per day per show(average occupancy) considering weekdays and weekends together
Size of Popcorn Audience Per show No of shows 50% buy popcorn Profit
Small 140 4 70 140
Medium 140 4 70 165
Large 140 4 70 200
Size of Popcorn Profit per show Profit per day profit per month Profit per year Profit (for 10 screens)
Small 9800 39200 1176000 14112000 141120000
Medium 11550 46200 1386000 16632000 166320000
Large 14000 56000 1680000 20160000 201600000

The numbers are humongous!!! So the profit per year is Rs. 14,11,20,000 or 14crores on an average which is before expenses. (And this is only for the small sized cup of popcorn!!!)

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But after expenses, it might be around 13.5 crores as this is only for popcorn. This is a conservative cost estimate. If the number of seats go up or if the cost goes up even by a small amount the profits jump many crores. As it is a monopoly inside, there is no other alternative. Outside food is not allowed and although some try to sneak food or drinks into the theater, but it’s usually just not worth the trouble and now they frisk all the eatables and even lunch boxes should be submitted before entering. The fact is that your options are limited once you enter the theater, so you can either eat their food or not eat at all.

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On the contrary

It helps to understand that a theater gives half of the ticket price to the distributor/studio, but keeps the concession revenue for itself. Some say that 90 percent of the profit goes into the pockets of production companies. Hence, theaters engage in “metering price discrimination” so that price sensitive audiences (students, seniors, teens, e.g.) can afford a ticket, and less price-sensitive audiences can supplement the theater’s profit by purchasing popcorn at a 90% profit margin. Food from outside is banned because it is a business. The same analogy of a restaurant would apply. Does any restaurant allow you outside food? No. These are the reasons given by several theater owners. But they are in the business of showing movies; they are not into the business of selling food. They say that if people have a problem with the prices they are free not to buy the food or rather they are free not to come to the multiplex in the first place.

But in the case of cities like Bangalore, even the ticket prices are high, touching Rs.270 to Rs.400 even on weekdays. Anyway my point is from a middle class perspective. These costs do not come into the picture when you belong to an upper class segment.

I also saw an online petition recently which urged people not to buy anything from theaters and then explained that the cost might come down if no one is buys for around 3 months. That is a long shot and the petition itself was signed only by around 100 people (yes very few to even notice). Fun and entertainment comes at a cost and that’s the direction the whole world is moving towards now. So the next time when you are going to a multiplex, make sure you eat something before going inside the theater or be ready to shell out everything you have in your purse.  🙂

Simple right!!!

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