Many struggling cinemas depend on sales of pricey food and drink as ticket revenue mainly goes to film studios. But does banning outside supplies really add up, asks Stuart Heritage
Unfortunately they’re trapped. If they lowered the price of food and raised the price of admission to compensate people wouldn’t notice. In fact, they wouldn’t even make it to the food to see, they’d just know that one cinema has $10 admission and the other has $20.
They could advertise that they have lower concession cost to attract people, but there would be enough people thinking “I’ll just go to the cheap one and bring my own food/not buy food.” that momentum wouldn’t move into their favor.
Unfortunately they’re trapped. If they lowered the price of food and raised the price of admission to compensate people wouldn’t notice. In fact, they wouldn’t even make it to the food to see, they’d just know that one cinema has $10 admission and the other has $20.
They could advertise that they have lower concession cost to attract people, but there would be enough people thinking “I’ll just go to the cheap one and bring my own food/not buy food.” that momentum wouldn’t move into their favor.
That sounds like the invisible hand of the market weeding out failing competitors.