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.

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