Tell us about your experiences with Marketplace. Enter To Win

How movie theaters will make the most of ‘Star Wars’

Adriene Hill Dec 18, 2015
HTML EMBED:
COPY

How movie theaters will make the most of ‘Star Wars’

Adriene Hill Dec 18, 2015
HTML EMBED:
COPY

“Star Wars: The Force Awakens” is playing in more than 4100 U.S.  theaters this weekend. And with many cineplexes running non-stop shows in multiple theaters, that adds up to tens of thousands of showings for millions of fans.

For Disney — the studio behind the movie — the math is simple: Sit back and watch hundreds of millions of dollars roll in.

But for movie theaters, scheduling “Star Wars” in order to maximize profits requires some pretty elaborate calculations.

“This is a very complicated problem,” said Josh Eliashberg, a professor of marketing at the Wharton School of the University of Pennsylvania, and a man who knows a thing or two about optimal theater scheduling. He’s spent about a decade researching it. 

Eliashberg said there are many factors come into play when setting a schedule. Among them: estimated ticket sales, the number of screens to devote to the movie, and smaller things like the time it takes the cleaning crews to get in and out of theaters before the next audience arrives.  Weather also plays into the mix. So do holidays.

And, while it might seem easier to schedule “Star Wars”–just show it every 15 minutes until the crowds stop coming — Eliashberg said it might actually be more difficult. First, because the movie is being released in 2D and 3D, so theater owners have to predict the demand for both. They also have to decide which other movies they will stop showing to make room for “Star Wars.”  Most of the box-office revenue from opening weekend and the first few weeks movies are in theaters  goes to the studio.  Theaters don’t start to cash in big on ticket sales until a movie has been playing longer.

“The real money to be made is at the concession stand,” said Jack Oberleitner,  a theater consultant from Oberleitner Associates.  He says a well-run theater can keep about five percent of ticket sales. Profit margins on concessions can run as high as 85 percent. 

That’s why it’s essential that theaters time their movies to start and end at different times. They don’t want too many people coming and going at the same time and creating crowds that could slow down things at the concession counter. “If you have enough staff and your crowd control procedures in proper set up, you’re going to be guiding people right past the concession stand,” said Oberleitner. Get it wrong, and you’ll have crowds waiting to buy tickets, waiting in line for the bathroom, and not buying Junior Mints.

Some theaters use algorithms and software to do their scheduling. Others, still take their cue from Han Solo,  and go with their gut.

 

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.