Sales Down, Profits Up: How movie theaters do it.

February 14, 2007

Do you still go to the movies? Then your one of an ever dwindling number of Americans that still do. A factoid released by the good folks at Kagan Research puts a sunny face on the industries declining fourtunes. In it Kagan helpfully points out that movie theaters making money despite sinking sales by gouging anyone still not using Netflicks, GooTube or Bittorent for the movie needs.

Kagan points out that although sales have declined for the last four years theaters still managed to eek out a profit though higher price and advertising. Since 1997 ticket prices have grown by more then 4% a year which more then makes up for the decline in ticket sales. In Kagans view this news is a reason for the major studios smile. Think of it as an “honesty tax”. . .

Now, I dont have a raft of MBA’s running models for me or hordes of baby-faced analyst like Wade Holden crunching data but I dont think fewer people coming to my business and higher prices for my remaining customers is any reason to smile.

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