How Are Movie Ticket Prices Calculated?


Quick Answer

Movie ticket prices are determined by overall industry demand combined with the amount of tickets movie studios and theaters need to sell in order to earn profits. Since movie studios consider these expenses as a whole, ticket prices are universal regardless of which movie patrons choose to see.

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How Are Movie Ticket Prices Calculated?
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Full Answer

Each year, movie studios determine a budget for new films. That project determines which and how many new films they can green light. Studio executives must also consider which films are set to be released in a given year and determine a marketing budget to draw audiences. Other costs that are considered include standard operating costs, salaries and distribution. Once they have combined all of these factors, they must determine how many tickets must be sold that year in order achieve their profit goal. Not all movies are equally successful at the box office, however, so a margin of error is factored in to account for unsuccessful films. That number determines how much cinema owners can be charged to show films and the number of screens to which a film will be released. Cinema owners must then weigh the expense of the movies they agree to feature with their own operating costs, salary expenses, and other fixed costs. Together, these expenses determine the final cost of movie tickets.

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