Seniors at the Movies

(Photo: David Thompson)

Our local movie house in suburban London charges £11.90 for a regular ticket, and even seniors pay £8.90 (over $13).  But there is a special for seniors (ages 60+):  Every Tuesday they show a recent movie (e.g., Lincoln is showing on May 21) and charge only £3 ($4.60).  Moreover, you get “free tea, coffee and biscuits!” Such a deal—so how can they make money off this, or is it just altruism by the theater owners toward us old folks?

The movie costs no extra rental, and the only variable costs are the wages of the one or two workers who sell the tickets and make the eats.  The fixed costs—of the movie rental, the theater and heating/electricity, are irrelevant for the owner’s decision.  I should think that, if they can sell even 20 tickets, they will increase their profits.

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  1. Jerome Solanum says:

    Because then seniors get used to coming to the theater and have positive associations with it. So, they’ll want to come even when the deal isn’t going on, and also possibly even bring along non-seniors (who pay more).

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  2. greg says:

    One aspect that I did not see mentioned is labor costs. Even if the theater does not make a profit, they are giving their employees a chance to work more hours. Getting more hours of work per week may prevent good employees from leaving and seeking better opportunities at another place of employment. Retaining good employees saves employers money by reducing training costs and maintaining efficiency.

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  3. Joe says:

    Seniors can have some ‘different’ ideas about what things should cost. For example, a fair restaurant tip is $0.25, air for tires at the service station shouldn’t cost $0.25 – way too much.

    Some of them just don’t seem to adjust for inflation – ever – and they’ve seen a bit of compounding.

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  4. Graeme McRae says:

    Besides the ways you mentioned, here’s how the theater makes a profit:
    1. Theaters keep less than half of ticket revenue for first-run movies, but quite a bit more than half for older movies. They share the rest with the studio that produced the movie.
    2. Theaters keep all of the concession revenue. They’re banking on the geezers spending some of their savings on popcorn.

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  5. Tim Almond says:

    Exactly. Cinemas, like hotels are very much about large fixed costs. You already have staff in doing background tasks for the rest of the day like restocking confectionary and selling tickets, you might as well open up some screens. If you have a small number of people for a showing, staff can do multiple roles.

    And for most major films, cinemas pay out a large percentage of the box office to the distributor. This doesn’t happen with say Life of Pi which is showing as my “Empire Seniors”. They’ll pay for the showing and very little, if anything of the box office.

    On top of that, you’re going to sell a bit of overpriced sweets/food to people (which is why cinemas have £1 saturday morning shows). If you’re not aware, cinemas showing blockbusters don’t make money from tickets in the first few weeks, but from popcorn and Pepsi.

    As a side note – a lot of this innovation is because of digital projection. My cinema won’t be having to get Life of Pi delivered and a projectionist putting it on a reel. This is allowing cinemas to use the same screen for showing many different films. They can put on an 11am senior show of a slightly older film (or even a classic), then 2pm and 5pm they can put on a Pixar animation, then put a horror film on at 8pm.

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  6. Enter your name... says:

    I understand that there is a per-person charge for showing films commercially, beyond the rental for mere possession of the film. Also, the tea, coffee, cookies, coffee cups, etc., themselves are not free. The list of variable costs needs to include more than just employee wages.

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  7. RGJ says:

    Tad scary that this is a mystery to the author. Loss leader at worst.

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  8. JJ says:

    I am familiar with this chain, Vue Cinemas. They regularly have over 50 guests in watching the films which are generally second run. They will pay £50 fixed rental on the film and they are showing the film whilst they are already open. It is a great way to get lapsed cinema goers into watching films again. It gets the, excited about coming features and they are just as likely to make a second trip to watch a new film in the same week

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