The Theater versus The Home Theater
In Canada, Cineplex Inc. is the largest movie theater operator. According to an article published on August 10, 2012 by The Canadian Press, Cineplex Inc. has reported record second-quarter profits directly from movies like The Avengers and the addition of higher ticket prices from their premium theaters.
According to this article (via CTV News which can be viewed here), sales have not been very good this year with standard ticket sales. The premium priced theaters, (3D, UltraAVX, IMAX, and VIP Cinemas), which also have premium ticket prices helped increase revenue. Add in the ultra-high concession prices and there is no wonder why Cineplex Inc. have record profits. Standard movie theaters are not the big earners they once were because people are deciding to stay home and watch movies instead.
If you eliminate the premium prices and the blockbuster, The Avengers, you will notice movie theaters are not as popular as before. Consumers have decided to stay home and watch movies from the comfort of their own home. Having a home theater has it’s benefits especially if you have children or lead busy lives and just can’t make it out to the theater. The cost of the ticket, transportation to and from the theater, concessions, and implicit costs associated, the long term benefit of a home theater is appealing. Long gone are the days of $2.50 Tuesdays at your local theater.
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