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TOPIC: need start up information

need start up information 30 Jul 2002 17:42 #23372

  • yellowtail
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My wife and I are very interested in getting into the theatre business. We are looking for any good input on where to start, everything from business plan to grand opening and expansion. we are very curious about how the movies are priced from film distributors. Is the cost based on a percentage of ticket sales or a flat rate? I just read another post that stated this particular theatre had revenues of 2,000,000.00 and expenses of 1,800,000.00 are the movies that expensive? What are all of these huge expenses? Do banks seem to be interested in this industry for a new start up? Any info is greatly appreciated.
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Re: need start up information 30 Jul 2002 17:59 #23373

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I just went further back in the history and found some info but I would still like any input. thanks
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Re: need start up information 30 Jul 2002 21:37 #23374

Let me personnally welcome you to the forums.

We are currently working on a special collection of posts that will help you with start-up on a new theatre. You can ask Mike when that will be released. It was an idea that won first place in a new features contest.

Just a couple of tips:
-Ticket sales make nothing.
-Ticket sales are based on a high-percentage going to the distributor.
-The lower the ticket prices, the more that will be spent at the concession stand.

Can we have some info on near competition, location, population, etc.?

Thank-you.

"Would you like fries with that?"
Since 1987
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Re: need start up information 31 Jul 2002 00:06 #23375

  • CharlieBo
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As an independent theatre booker,I can tell you,YES,film is expensive!A first-run theatre will average 50-60% of boxoffice on film rental.Concessions are the real profit-maker,but you need to play the top films to get the people in to buy your popcorn.If you let us know some demographics,etc,you will find help on this forum.

Good luck
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Re: need start up information 31 Jul 2002 09:32 #23376

  • trackfood
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An above post states "The lower the ticket prices, the more that will be spent at the concession stand"

This statement is not true. Sub-run theatres, (theatres that play the movie AFTER all the first run houses are done with it always have a lower admission price. They also ALWAYS have a LOWER cents per person. The reason for this is the people who go to the budget theatres do so to save money, hence they don't spend at the concession stand. If they only paid $2.00 to get in to see the movie they're not going to buy a $5.00 popcorn.
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Re: need start up information 31 Jul 2002 09:38 #23377

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Hi, Thanks for the responses. We live in a small town of about 10,000 and we have one 4-plex. We do not have any intention to compete here locally. We have watched this owner and it has occured to us that he is making a nice living and we figure with the right location we could too. This information is our current best guess and will have to be verified with research, but we have lived in the area for our entire life and I am sure that we are close. The town in mind is in the 10,000 population range with outlying areas. This small town has a city of 100,000 twenty minutes away and they have 17 screens in use. We would have to compete and get good movies, but one would save 20 minutes in the car (each way) and a couple of bucks in ticket price. This city also has all of the screens stacked on top of each other on one end of town. The other end of town has nothing. Just recently Target Walmart and some other retail monsters have started opening new locations on the other end of town (opposite the 17 screens). My thought process is to follow the monsters and join them on the other side of town. We are very early in the process and willing to go wherever the best location takes us, but both locations seem viable options to research.

[This message has been edited by yellowtail (edited July 31, 2002).]
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Re: need start up information 31 Jul 2002 13:41 #23378

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Yellowtail,

When I said that we are going to make $2 millon and spend $800,000 what I am saying is yes it is expensive to run a movie theatre. But that $800,000 covers everything, film rental, concession cost of goods sold, staff, managers, my salary, insurance, advertising, theatre lease, new seats, the exterminater, the guy who puts those things in the urinals, janitorial service, buiding maintenance, fixing the projectors.

The $200,000 left over at the end of the year is profit. Thats a 10% profit margin. (Better than the stock market right now) That is the money we will be returning to our investors eventualy.
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Re: need start up information 31 Jul 2002 16:07 #23379

  • BECKWITH1
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Each forum hear normally shows only topics from the last 20 days. You can change that at the top of each forum by setting it to show all topics and clicking go. Then you can catch up on several years of information. It will take you either 2-3 nights all night or several weeks to read it all. I recommend starting here in the Back office because it has some of the best stuff for starting out and is shorter. The Lobby forum will take you forever but is a gold mine of information. I recommend that you try Concessions Stand 2nd as this is where we make most of what we get to keep and there are good numbers here. Good luck!

BTW - be careful about that city of 100,000 with the screens on one side of town. I suspect that you are not the first to notice that this might make a good place. The chains are probably ready to announce plans to start building any minute. You probably won't be able to compete with them when it comes to getting movies. You might want to find a less hotly contested area such as the smaller city. FWIW anyway.
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