The Economics of Hollywood: Movie Theatres

The video discusses the business model of movie theatres, highlighting that they primarily earn from food and beverage sales rather than ticket sales. AMC is used as an example to illustrate financial performance, showing that despite high food and beverage margins, overall profitability is low due to revenue-sharing agreements with studios. The video explains how these agreements work, with theatres receiving a small percentage of ticket sales initially, which increases over time. Disney's pricing power is examined, showing how their popular films can dictate terms to theatres, emphasizing the dynamics of free market economics.

What percentage of AMC's total revenue came from food and beverage sales according to their 2019 annual report?

Explain why AMC's financial performance may appear poor despite having significant food and beverage profits.

How does the revenue share between theatres and studios change over the weeks a movie is shown?

What was the backlash Disney faced regarding their revenue share policy with theatres?

Discuss the argument about Disney's market power and how it relates to their movie quality.