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TOPIC: Number Of Seats

Number Of Seats 07 Jan 2001 16:34 #1085

  • Ed Jurich
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If someone were to start a multi-media theater which would run 35mm, 16mm and possible some form of video, what would be a minimum number of seats to insure some profit.
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Re: Number Of Seats 08 Jan 2001 00:05 #1086

  • RoxyVaudeville
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Ed...not an easy question to answer. One would have to have a great deal more information before any kind of estimate could be given. There is a lot more to operating a theatre then just renting a movie. Obviously once you know what your house overhead is then you can begin to calculate the number of seats you would need based on the admission price(s)and number of shows per week, or even per day if you are changing films more often then once a week.

Some of the other costs that make up your complete overhead will be: rent or mortgage, electric, heat, water/sewer, payroll & payroll taxes, telephone, insurance, film shipment, booking, advertising, advertising materials as in posters, & trailers, debt service, maintainence & repairs, office expense, petty cash expenses, taxes, and of course film rental and concession supplies. However the last two should not be considered part of your house expense.

Are you talking about a single screen or multiple screens? Lets assume that you are talking about a single screen, and you determine that your total house overhead (everything except film rent and conncession supplies)will be $3,000 per week running two shows per night plus a matinee on Sat. & Sun afternoons. Are you going to be first run, or subrun, or maybe even discount? Or maybe art or classic or a mix? Your ticket price will be determined a great deal by which policy you choose, and the ticket price will of course determine how many seats must be filled to break even.

Let's also assume that you will have an average ticket price of $5.00, maybe based on $6.00 for adults, $4.00 for kids, seniors and matinees. Your concession sales will be an important part of the overall equation which will of course be based on your concession prices and per capita sales. We will assume a concession per capita (the average spent per person) of $2.00 and an average film rental of 50%. We can now calculate that you would need to sell 770 tickets per week to break even.

Example: 770 admission at $5.00 = $3,850.00 with an average film rental of 50% would leave you with $1,925.00. Your house overhead being $3,000 you would be in the hole for $1,075 based only on ticket sales. However your 770 admissions averaged $2.00 each in concession sales for a total concession gross income of $1,540.00. Your cost of goods would be around 30%. Your 70% share would be $1,078.00. Deduct your $1,075 loss at the box office from your concession profit of $1,078.00 and your left with $3.00 profit.

Remembering that you are running 16 shows a week and need 770 total admissions you would need about 50 seats per show average. Now of course you must consider that the weekends make up 60% or more of your weeks sales and Saturday night will be the single largest sales night of the week. The 7 PM show will most likely be the biggest on Saturday night. Based on normal percentage breakdowns I would predict that the Sat 7 PM show would sell about 175 tickets out of the 770 for the week, and as you are never able to get people to take every last seat, the number of seats needed for that show would be about 200. Lets also remember that this example is to just break even. To make money you will need to sell more tickets, and therefore will need more seats, unless you're content with selling more tickets at the less popular shows and turning people away on the Saturday evening shows.

There are many other formulas that would come into play for other policies, but I hope this gives you somewhat of an idea.
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Re: Number Of Seats 08 Jan 2001 02:38 #1087

  • BurneyFalls
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Darn, RoxyVaudeville, where were you when I was writing up my business plan?
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Re: Number Of Seats 08 Jan 2001 11:18 #1088

  • buddy
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Roxy,
This information is great. Thanks for posting it. As far as the overhead expense including payroll....do you count yourself in the payroll or do you pay yourself with the profit. This has always confused me about small businesses.
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Re: Number Of Seats 08 Jan 2001 20:41 #1089

Cost of goods 30% ??? Hmmm I seem to recall if mine got over 14% I was in deep do
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Re: Number Of Seats 08 Jan 2001 22:41 #1090

  • RoxyVaudeville
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buddy

As my theatre is a corporation, I am a salaried employee and therefore it is included. If you are not incorporated and are a proprietorship or a partnership, or an S1 corporation you would not have to. Basicly, it's up to you to do your books whichever way you want. I like to know if I'm making a profit after I've been paid.

One of my exhibitor friends that often posts here as well, when he hears me say that I'm not making any money often comments that I pay my manager too much (meaning me!). If I deducted my salary from the overhead, then the theatre would always be making too much money, and I'd have to pay more corporate income tax, and then pay myself out of the profits which would then get taxed again.
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Re: Number Of Seats 08 Jan 2001 22:51 #1091

  • RoxyVaudeville
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GTE

Remember that when they were yelling at you for going over 14% you were working for the big guys. They buy in quanity and get a discount. I don't know any independents that can get those kind of breaks. If you know of a place please tell me...please tell ALL of US!

I've shopped around for years and haven't found anyplace here in the east that delivers direct to the theatre with better prices.

Also you must keep in mind that the percentage will vary depending what you sell your goods for. I keep my prices low for my patrons. Candy - $1.00, $1.25, $1.50; Drinks - $1.25, $1.50, $1.75 and Pop Corn - $1.50, $2.00, $2.50.

I have found that all of my competitors charge more for their small items then I do for my large items!
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Re: Number Of Seats 09 Jan 2001 08:46 #1092

I forgot about those bulk discounts and kickbacks oops did I say kickbacks. If I do find a cheap place I'll let ya know. (i know no such place I have not shopped that far yet)
I am going the Corp route paying myself a salary. to keep those darn taxes lower. (well there is an oxymoron "lower taxes")
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