The Economics of Your Local Cinema
This, as it turns out, isn’t a myth. Slate has an articled entitled The Popcorn Palace Economy, which discusses how the local cinema is, in fact, in three businesses: the fast-food business (where they make all their profit), the movie exhibition business and the advertising business:
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. “We are really in the business of people moving,” Thomas W. Stephenson Jr., who then headed Hollywood Theaters, told me. “The more people we move past the popcorn, the more money we make.”
There’s some further analysis of this article and the industry on Ars Technica.
