I just received an e-mail from a woman wanting to know why movie tickets & popcorn cost so much. It's pretty simple
Once upon a time, movie studios and movie theaters were in the same business. The studios made films for theater chains that they either owned or controlled, and they received almost all their revenue from ticket sales. Then the government forced the studios to divest themselves of the theaters. Nowadays, the two are in very different businesses. Theater chains, in fact, are in three different businesses.
First, they are in the fast-food business, selling popcorn, soda, and other snacks. This is an extremely profitable operation in which the theaters do not split the proceeds with the studios (as they do with ticket sales). I once heard a theatre owner describe the cup holder mounted on each seat, as "the most important technological innovation since sound." He also credited the extra salt added into the buttery topping on popcorn as the "secret" to extending the popcorn-soda-popcorn cycle throughout the movie. For this type of business, theater owners don't benefit from movies with gripping or complex plots, since that would keep potential popcorn customers in their seats.
Second, theater chains are in the movie exhibition business. Here they are partners with the studios. Although every deal is different, the theaters and the studios generally wind up splitting the take from the box office roughly 50-50. But, unlike the popcorn bonanza, the theaters' expenses eat up a large part of their exhibition share. They pay all the costs necessary to maintain the auditoriums, which includes ushers, cleaning staffs, projectionists to keep the movies in focus, and the regular replacement of projector bulbs that cost more than $1,000 each.
Third, the theaters are in the advertising business. They sell on-screen ads. Some advertisers are paying more to theaters willing to pump up the volume so we will pay attention. Since there are virtually no costs involved in showing ads, the proceeds go directly to the theaters' bottom line.
To keep this people-moving popcorn/soda thing going, theater owners prefer movies whose length does not exceed 128 minutes. If a long movie promises to bring in a big enough audience—a promise King Kong made but did not deliver—the theaters will play it. The ultimate test is: Will a movie attract enough consumers of buckets of popcorn and soda to justify turning over multiple screens to it? Theater owners know that the popcorn audience is mainly teens - they're the only ones who can afford all that popcorn - I know - I gave 'em the money.