How Do Movie Theaters Work?


Movie theater chains negotiate with distributors for the right to show a film. In some cases, the distributor is part of a larger studio system. In other cases, the distributor is independent of the studio system and acts as a middle man to bring the film from the studio to the theaters. The theater usually either bids for a film--paying a certain amount for the rights to show it--or pays the distributor a percentage of the box office. Most deals are percentage deals these days; they usually favor the distributor in the initial weeks of a film's release, then gradually give a greater and greater percentage of the take over to the theater. In today's environment, most films make the biggest chunk of their grosses on the first or second weekend, so the deals favor the distributors. (Films with "legs," which retain a solid audience for many weeks, are theater favorites for obvious reasons. ) Distribution deals essentially constitute rentals: The theater "rents" the print for a certain amount of time and then returns it to the distributor when the negotiated time period is done.


The vast majority of the theater's money comes from sales of concessions. The movies themselves are used as a draw to get people into the theaters (they're often considered loss leaders, which means the movie theater loses money if its costs are factored in by themselves). That's one of the reasons why concession prices are so high: If the movie theater didn't have money from soda, candy and popcorn sales, it wouldn't stay open very long.


Movie theater business is based around a schedule. Each movie has a given running time--along with previews and commercials beforehand--which dictates a certain number of screenings each day. The screenings are scheduled and advertised in order to provide the most screenings each day, but also staggered to help the theater employees handle the ebb and flow of customers. Customers line up a certain amount of time beforehand or just walk in if the crowds are light. A projectionist starts the film at its appointed time, and employees clean out the used snack containers after the credits roll.


The theater employs projectionists to run the projectors and similar experts to help keep the sound and screen equipment in working order. Beyond that, most of their employees perform menial functions. They collect money for the tickets, sell concessions, check the theaters for screen problems or troublemakers, and clean each theater after each screening. They may also be asked to solve electrical problems or deal with plumbing. A movie theater manager oversees all of the various positions and ensures that everyone does his job. A good sense of timing is a key skill set for managers. Movies must start on time and run a certain period, dictating not only the time people line up, but the ebb and the flow of concession lines, bathroom visits and the like.