Lion of the Blogosphere

Movie theater concessions (libertarianism part 6)

$4 for a bottle of water? $7 for popcorn? Movie theaters can rip you off on these things because they have set things up so that there is no competition within the theater. If other vendors was allowed to set up in the lobby and sell stuff, the price for a bottle of water would sink to down to $1 where it belongs and popcorn would cost $1.50. This demonstrates why businesses hate, hate, hate competition. Competition causes lower prices and profits evaporate. Therefore, the main goal of business is to change the environment so they can sell stuff without competition.

Libertarians will say that you are free to go to another movie theater. Maybe in the past there were lots of small mom & pop movie theaters, but today the movie theaters are huge megaplexes and there may only be one conveniently located near you. And if there is more than one, they are probably from one of the four big movie theater chains: Regal, AMC, Cinemark and Carmike. Like just about every type of business in the United States, movie theaters are an oligopoly, and they all have the same unconscionable prices for food and drink. There is no choice for the consumer.

After you bring up the oligopoly argument, liberals will fall back and say you don’t have to go to the movie theater at all. In the case of movie theaters, libertarians actually have a point. In the past, movies had more of a monopoly on motion picture entertainment, but today substitute goods like Netflix rentals or illegal torrent sites (of course you should not violate the law, just pointing out that some people do) allow you to watch as much entertainment as you want in the comfort of your own home without being ripped off by movie theaters.

Why do people still go? The answer is that it has become part of the culture, and the movie theater oligopoly will do its best to brainwash you through advertising into thinking that it’s still part of the culture. And once in the theater, they do their best to brainwash you into thinking that buying popcorn is an essential part of the movie experience. If all of your friends decide they want to go to the movies, you can either join in or be a hermit. Thus, the best way to save money is to dump your spendthrift friends and acquire more frugal friends. Or you should attend a quality school like Harvard so you can get into a good career track so that you make so much money that spending a hundred dollars to take your family to the movies doesn’t seem like a big deal. For example, you can make $4.45 million dollars per year as the CEO of a movie theater chain.

Written by Lion of the Blogosphere

April 23, 2015 at 9:33 AM

108 Responses

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  1. The consessions subsidize the cost of your ticket. If there were no concessions, they’d have to charge more. But the great thing is you don’t need to buy any concessions. Just watch the movie without putting stuff in your mouth for 2 hours. Then go out to dinner after and talk about the movie (or how the restaurant marks up its food because it has a monopoly on serving food there, if you want to bore your date).

    Dave Pinsen

    April 23, 2015 at 9:39 AM

    • I updated my blog post to mention that movie theaters also try to brainwash you into thinking that buying popcorn is an essential part of the movie experience.

      You are correct that logical frugal people don’t have to put up with it, but they are in the minority, and looked down upon by the greater spendthrift society as “cheap.”

      Lion of the Blogosphere

      April 23, 2015 at 9:44 AM

      • “You are correct that logical frugal people don’t have to put up with it, but they are in the minority, and looked down upon by the greater spendthrift society as ‘cheap.’ “

        Indeed. As a frugal person myself I’ve been subject to this. Which is unfair because I’m frugal in my purchases but generous in tips, gifts and donations. So it’s not that I’m cheap but that I don’t piss away money on crap. I’ve noticed those who object to my frugality most are spendthrifts. I think it’s like the heavy drinker who insults the teetotaler because the teetotaler illuminates his weakness.

        ***

        “This demonstrates why businesses hate, hate, hate competition.”

        You seem to be arguing against the free market on the basis that businesses don’t like competing and some will try to undermine it. It doesn’t really matter whether businesses hate competition. In a free market they still have to compete.

        “Libertarians will say that you are free to go to another movie theater.. and say you don’t have to go to the movie theater at all.”

        One is and one doesn’t. But that’s not really the issue. The issue is “Who owns what?” The movie companies own the movies and have every right to restrict their distribution. The cinema chains own the theaters and have every right to restrict who can sell there. No one would say Tiffany’s should be required to open their stores for other jewelers. Nor would anyone claim Tiffany’s was being unfair by charging higher prices than other jewelers. So why should a cinema chain allow others to sell snacks in their theaters? And why are their prices any more unfair than Tiffany’s?

        destructure

        April 23, 2015 at 1:29 PM

      • “So why should a cinema chain allow others to sell snacks in their theaters?”

        In other words, corporations will do anything to make a buck, even if it seems sneaky and dishonest, as long as it’s not dishonest in an illegal manner, and even then sometimes they cross the line.

        Yes, this is how corporations behave. They are not our friends. Sometimes they actually create value, but even when they do that, it’s just one of many strategies for making more money, and not because they want to do good.

        Government should allow corporations to profit by creating value, but should not allow them to profit by other schemes.

        Lion of the Blogosphere

        April 23, 2015 at 1:51 PM

      • I don’t find it sneaky or dishonest at all. As others have pointed out, the ticket sales are subsidized by concessions. If they charged less for concessions they’d just charge more for tickets. As a frugal person, I would prefer to eat ahead of time and pay less for tickets. What they’re doing is no different than the typical “loss leader” strategy to get customers in the door in hopes they’ll buy something else. Or offering free checking and credit cards in hopes people will get charged fees or carry a balance so they can make money by charging interest. Or restaurants charging 40% markup for wines or corking fees and bottle charges. It irritates me to pay things like that so I won’t. But I also realize I’m being subsidized by irresponsible spendthrifts who do.

        I never said businesses were “friends”. But if businesses engage in shady practices like leasing cars, renting furniture or offering extended warranties then whose fault is it? They wouldn’t do it if ignorant people didn’t create the demand. Now, that doesn’t mean I like it. There are plenty of things I don’t like. But I’m not going to micromanage everyone’s life. I don’t want to live in a nanny state. And even if I did I’m practical enough to realize that corporations who “hate, hate hate competition” would merely bribe politicians to pass laws giving them an unfair advantage over their competitors.

        destructure

        April 23, 2015 at 4:41 PM

      • There are reasons other than frugality to avoid the concessions. First, it’s another line you have to wait in, second, you’re stuck with garbage after you’re done, third, you’re going to need to go to the (likely, filthy) bathroom to wash the butter off of your hands, etc.

        Dave Pinsen

        April 23, 2015 at 8:29 PM

      • “and looked down upon by the greater spendthrift society as “cheap.” ———————-

        This theme, of feeling middle class conspicuous consumption angst, keeps coming up, most recently in your post about the young associate and the car. I have no doubt that of the slob TOOS I’ve known in my life driving old cars and wearing casual to grubby clothes not a single one has given a rats arse what some angst filled middle class neurotic sitting near them in a movie theater thought of them. This is the greatest of life’s luxuries that comes from having money. You really don’t have to care and as a consequence, don’t. In fact, I suspect many get a kind of thrill from being looked down upon in this manner. TOOS, and even some upper class, love to dress down and go slumming. Some (many) live much of their lives on the edge of perpetual slumming. I guarantee you Sam Walton had the experience of being out and about in his beat up old truck wearing his cowboy attire and got glared at by some middle class housefrau. He probably loved it.

        Curle

        April 24, 2015 at 6:45 AM

      • This post is just a mess.

        Businesses dont allow other business to sell things *inside* their establishment. Why would they? They have to provide the floor space, power, insurance etc for some else to set up a water stand in the lobby?
        This is a ridiculous example of “businesses hate, hate, hating competition”.

        The Walgreen near the movie theater sells water, as does the grocery store. How much time per day do you think that manager of the movie theater spends with his fists clenched hating Walgreens? Zero.

        And no one is even required to buy the snacks in the first place to see a movie. You either go an hour and half without stuffing your face, or you smuggle in whatever you want.

        Lion of the Turambar

        April 24, 2015 at 10:59 AM

      • “Why would they?”

        Right, we are so used to businesses acting in their greedy self-interest rather than the good of society, or fairness, or to favor competition, that the very idea of business acting differently seems like crazy talk.

        The issue of not being “required” to buy snacks was addressed already.

        Lion of the Blogosphere

        April 24, 2015 at 12:50 PM

      • Yes- a rival business setting up shop *inside* another business’s store is crazy talk.
        I dont see how this demonstrates “hate hate hating competition”.

        Lion of the Turambar

        April 24, 2015 at 1:36 PM

      • Leon — “we are so used to businesses acting in their greedy self-interest rather than the good of society, or fairness”

        destructure

        April 24, 2015 at 6:31 PM

  2. [Why do people still go?]

    One reason is the number of hispanics in the country. They love going to the movies and do so more than other demographics.

    It is interesting that the advent of video was thought, at the time, to be the death knell of movie theaters, but in fact more people go to the movies these days than back then. (They were the death knell of porno theaters however.)

    A parallel could be applied to ebooks vs print. Just a few years ago people were convinced print books would cease to exist but consumers seem content to augment print books with digital, not use them as a replacement.

    As far as concessions, last time my kids went to the movies they snuck juice boxes in their socks. This wasn’t under my advisement. My husband views the popcorn purchase as “part of the experience” so doesn’t mind the price.

    slithy toves

    April 23, 2015 at 9:56 AM

    • It’s the same sort of phenomenon where, often (but certainly not always), the best thing that can happen for an independent coffee shop is Starbucks setting up shop nearby.

      Some Guy

      April 23, 2015 at 1:34 PM

    • “last time my kids went to the movies they snuck juice boxes in their socks…”

      How ’bout that? When I was in college in the late 70s, we would sneak a half-pint bottle of Seagram’s 7 into the theater in my date’s purse, and buy 7-Up at the snack bar. Part of the movie-going experience.

      Sgt. Joe Friday

      April 23, 2015 at 11:03 PM

  3. I used to smuggle hoagies into the movie theater when I was in early high school.

    rdorsey

    April 23, 2015 at 10:15 AM

    • When I was in high school I worked in a movie theater and ate the popcorn and candy bars when the manager wasn’t looking. I wasn’t a very honest employee.

      Mark

      April 23, 2015 at 5:08 PM

    • I guess you were within 50 miles of Philadelphia

      Copperhead Joe

      April 24, 2015 at 1:48 PM

  4. Off topic, I’ve noticed that “don’t go to movie theaters, get a Netflix or equivalent account and watch movies from the comfort of your home, movie theaters suck because of x” is a popular internees meme. But ironically movie theaters make sense if you don’t particularly like movies, just enough to watch one or two a year. Then it’s less hassle to not bother with setting up the account and just go once or twice a year. If you go that rarely, it’s not a big deal to overpay a few dollars for popcorn either (but I don’t like popcorn).

    Ed

    April 23, 2015 at 10:22 AM

  5. Tweet I saw earlier this week:

    McFly

    April 23, 2015 at 10:34 AM

    • This is the point that seems to elude Lion’s recognition. His super cognitive powers are somehow immune to the idea that centralized government and centralized corporate power grow together.

      culdesachero

      April 25, 2015 at 3:13 PM

      • Well it’s true that there is not much centralized corporate power in Somalia where there is also no centralized government.

        Lion of the Blogosphere

        April 25, 2015 at 8:25 PM

      • Marxists frequently throw Somalia in libertarian faces as if the only two options are all government and no government. Somalia might be a good argument to use against anarchists who believe in no government. But libertarians believe in limited government. In particular, libertarians believe the proper role of government is to protect citizens from exactly the kinds of abuses one finds in Somalia.

        (https://www.youtube.com/watch?v=QmeeMYrnweg)

        destructure

        April 26, 2015 at 9:09 PM

  6. Going to chain movie theaters is extremely prole. Have you seen the disgusting people there? It’s the same crowd that used to hang out at malls.

    SWPLs go to film festivals or indie theaters (Rocky Horror is borderline). They don’t go to big box theaters where high schoolers and wannabe gangbangers movie hop.

    George

    April 23, 2015 at 10:38 AM

    • There is some truth in this, although I think that going to the movies is still one of the few activities that cut across class boundaries.

      Lion of the Blogosphere

      April 23, 2015 at 10:39 AM

      • (Fun) activities that cut across class boundaries is a good idea for a post.

        I’m drawing a blank right now, though. Maybe walks along the Brooklyn Promenade/riverfront area.

        rdorsey

        April 23, 2015 at 10:47 AM

      • @ rdorsey

        Great idea for a post.

        Renault

        April 23, 2015 at 11:26 AM

      • @rdorsey

        I agree this is a good idea for a post.

        Religious congregations were another place where people of all ages, walks of life congregated. Still somewhat true in small cities.

        Pro sporting events bring together proles and SWPLs.

        McFly

        April 23, 2015 at 12:03 PM

      • Hunting and fishing cut across class boundaries. The way the classes hunt and fish are different, but members of every class do hunt and fish — except maybe class x members.

        CamelCaseRob

        April 23, 2015 at 12:27 PM

      • [(Fun) activities that cut across class boundaries is a good idea for a post.]

        Going out for pizza. Even lady diana ate pizza in public.

        slithy toves

        April 23, 2015 at 1:05 PM

      • one of the few activities that cut across class boundaries.

        I don’t think polite middle class people can bear to go to theaters with other lower class patrons. I know I can’t. Although I live in an area where lowerclass means lower class blacks.

        Lloyd Llewellyn

        April 23, 2015 at 10:35 PM

      • The market is being segmented. I now mostly only go to luxury movie theaters where the tickets cost $20+, they have reclining leather lounge chairs, waiter service, have adults only showings of most movies, etc. The popcorn is even more expensive, but they have more variety, better food, and alcohol.

        Truth

        April 24, 2015 at 2:18 AM

      • Uppers and Xs go to the theater, live music performances or out to dinner. From my experience, rarely the movies. I’ll see thirty concerts or theater performances for each movie watched in a theater. But, perhaps that’s an age thing. Movies seem to me to be directed at teenagers and women mainly.

        Curle

        April 24, 2015 at 6:32 AM

      • Using marijuana.

        Beets beets

        April 24, 2015 at 6:45 AM

    • The first time I went to a fancy SWPL theater was to see “Wolf of Wall St.” I had an artisanal, free-range, pork sandwich, luxury popcorn, and washed it all down with an indie pear cider. IT WAS AWESOME! SWPLs have great taste.

      DSGNTD_PLYR

      April 23, 2015 at 10:55 AM

    • There is seriously no more terrible group of people than the film festival crowd.

      I often go to Sundance (the best two weeks to ski Utah each winter, as the local mountains are literally empty), and end up spending my evenings out dreaming about face punching a good 90% of the people that I encounter. Film festivals are such a bizarre combination of loser film fags, scenesters, and douches from Los Angeles: Obama t-shirts and True Religion jeans everywhere you look.

      Renault

      April 23, 2015 at 11:25 AM

      • Right. Worse even than rock critics. Though I have a near equivalent dislike of foodies.

        Curle

        April 24, 2015 at 6:25 AM

      • There’s the wonderful scene in “Annie Hall” where they’re standing in line at a movie theater overhearing pompous patrons talk about film.

        Anthony

        April 24, 2015 at 10:38 AM

      • I watched a bit of this on Netflix until I got bored with the self-seriousness and quit. http://www.showrunnersthemovie.com/. The thing that stood out to me was the people who kept mentioning what seemed to me relatively insignificant events as if they were unimaginably momentous. One guy, a writer on Star Trek Next Gen was effusive about being able to ‘experience’ killing off Kirk. Another, a woman writer broke down associating a friend’s death with a drama she wrote. I’ve had career successes but to tell the truth, they don’t occupy my thoughts much beyond the event in in the way these writer’s experiences (not exactly warfare BTW) affected them. Seemed weird, contrived and too dramatic. As if they were trying too hard to convince themselves they were leading meaningful lives.

        Curle

        April 25, 2015 at 10:31 AM

  7. We’ve got some independent theater start up around here who will sell wine, tapas, flatbread, and sliders at their concession. It is 2-3 bucks more expensive than $7 popcorn and it’s tasty restaurant quality stuff.

    Innovation! Theaters have to innovate or die. The movie theater “oligopoly” is yet another industry that is slowly dying because it didn’t innovate, making it a bad example for Lion to try and disprove libertarians with,

    Also, you could just as easily say that the food restrictions are part of the price of the ticket, not a separate monopoly.

    Rotten

    April 23, 2015 at 10:45 AM

    • Unless you’re telling me that proles are no longer interested in eating junk food served at the concession, where they would want food items catered to SWPLs. Proles are less discerning when it comes to shoving food down their esophagus.

      JS

      April 25, 2015 at 3:55 PM

  8. Maybe De Blasio can open the caverns of these rogues to honest competition, or, even better, put in a state owned concession stand of his own (no big gulps).

    These sorts of libertarian injustices will drive me to drink, I tell you, though not at a bar, of course.

    Glengarry

    April 23, 2015 at 10:48 AM

  9. Movie theaters are a terrible example of Libertarians being wrong Lion. People don’t have to go. It’s not like the power/water monopoly.

    Related. Movie theaters can’t own the films they show. A similar law should be passed wrt pay-tv and the channels they air (Comcast and NBC Universal are the same company).

    DSGNTD_PLYR

    April 23, 2015 at 10:59 AM

    • No, it’s not a bad example. The overwhelming vast majority of stuff you buy you don’t really have to buy, but that doesn’t mean there isn’t monopoly power and value transference happening. (Only real exception is when you are taken to a hospital and doctors will just do stuff to you without you having much choice.)

      Lion of the Blogosphere

      April 23, 2015 at 11:25 AM

      • Hospitals and insurance companies have outmonopolied doctors– hospitals have a monopoly on the places medicine is practiced, and insurance has a monopoly on billing.

        Most patients are aghast at the idea of paying 50 dollars a month cash for a concierge medical practice, but are perfectly fine spending 1000’s a year to random bureaucrats that want to impoverish doctors and nurses.

        jjbees

        April 23, 2015 at 11:27 AM

      • Worse, people who earn a lot of money and are very nickelish and dimeish with their essentials. Yet, they make no complaints when it’s tax time, where 50% of their money is already with Uncle Sam or going towards his slush fund.

        JS

        April 23, 2015 at 12:50 PM

      • If everyone is taxed the same, then one’s relative position in the hierarchy doesn’t change, to it doesn’t mean anything. Lower taxes would just drive inflation. The price of everything you want to buy would just increase in proportion to the tax cut, so the lower tax rate would not increase your purchasing power. This is because we live in a value transference economy and not a value creation economy.

        Lion of the Blogosphere

        April 23, 2015 at 1:28 PM

      • I can watch the movies at home (which is good because I don’t have to worry about other people) and eat cheaper popcorn. That’s not a monopolized market.

        And what monopoly pricing? I can see movies at non-prole theaters in the DC area for as little as $5. That’s cheaper than on-demand, and that’s for the latest releases.

        dsgntd_plyr

        April 23, 2015 at 7:57 PM

  10. Lion, what do you think of people who pirate yet still spend lots of money in the industry? For example, I pirate lots of books but also buy lots of books every year, both online and at barne’s and noble. I also pirate many movies, but love going to the cinema with friends and family and, with my family, pay for a netflix, huluplus, amazon streaming video, acorn, and buy rare films if I can’t pirate them.

    So, despite my high levels of piracy, I am probably in the top quartile among consumers supporting the industry.

    Why do I pirate? Same reason Willie Sutton robbed banks…because it’s there. But I still like the experience of watching movies in person with other people. I went and saw Fast and Furious 7 two times just to be social with family and friends (I know, I know, completely prole). I think I represent the majority of heavy piraters.

    jjbees

    April 23, 2015 at 11:25 AM

    • I read an article that people who pirate music actually spend more money on music than those who don’t. One might conclude that piracy is actually good for business. Or one might conclude that people who don’t care enough to pirate also don’t care enough to buy.

      destructure

      April 23, 2015 at 12:41 PM

      • I read an article a year ago that HBO uses torrent data to determine how much to charge foreign broadcasters to air Game of Thrones (more pirating, higher fee). I pirated season one, loved it, then subscribed to HBO.

        dsgntd_plyr

        April 23, 2015 at 8:04 PM

      • I agree with this.

        The media companies assume that everybody who pirated their movies and songs would have been willing to pay full pricce for them. That is a faulty assumption.

        ScarletNumber

        April 23, 2015 at 11:00 PM

  11. I think you absolutely hit the nail on the head with the “brainwashing” business, and I’d like to see you develop that point further in a future post, Lion.

    The large role that brainwashing — which is to say, marketing and advertising that’s based on aggressively peddling lies or nonsense in order to manufacture demand for useless products — plays in the modern economy is something else libertarians don’t really have a good intellectual handle on.

    A libertarian could argue that if a company says “our hamburgers are delicious” and they’re not, they will pay for that lie in the long run, but what if they say “our hamburgers will make you cool and popular and fit in” or any of the other host of “lifestyle” claims that now form the bulk of modern advertising? Would libertarians say an entirely snake-oil based economy would be a moral one?

    Morris

    April 23, 2015 at 11:28 AM

    • Correct, Pepsi stopped saying their cola tastes better than Coca Cola and now it’s just about being a cool thing to drink. (At least I don’t think I’ve seen a Pepsi Challenge ad since the 1980s.)

      Lion of the Blogosphere

      April 23, 2015 at 11:35 AM

      • Soda isn’t cool anymore.

        jjbees

        April 23, 2015 at 11:45 AM

      • Well, Italian-Style sodas in glass bottles are cool now.

        Queue MaryK.

        jjbees

        April 23, 2015 at 11:46 AM

  12. Wait, you actually buy that stuff? Why?

    And does this issue actually have anything to do with libertarianism?

    Carl

    April 23, 2015 at 11:50 AM

  13. Getting beat up by youfs is free. Lots of competition for white victims.

    islam isn't peace

    April 23, 2015 at 1:43 PM

  14. “Why do people still go?”

    Well I don’t go often, but if I do there’s two main reasons.

    1. Big screens. Even with big home TVs, certain movies are just more fun to watch on a big-ass Imax screen, with blaring sound and sometimes 3-D (though I’m not crazy about 3-D). When the new Star Wars comes out, ya gotta go see that thing on a big screen.

    2. I don’t want to wait. This is usually the case with smaller, indie movies that I really want to see. Like I really want to see “While We’re Young” and I don’t want to wait for DVD or Netflix. But I will see this in the local art house cinema, where the audience is pretty much older Jewish people who like cultural activities and young hipsters. The audience is about 95% white (or SWPL Hispanic) and 5% Asian, so it’s safe and pleasant. And you can get all kinds of natural stuff at the concessions counter if you want, or a nice cappuccino, etc.

    peterike

    April 23, 2015 at 2:03 PM

  15. Yes, I sometimes read about absurdities of markets and get angry or depressed. But then when I read about the absurdities of government, I know there’s no comparison. Behold, the National Raisin Reserve:

    http://marginalrevolution.com/marginalrevolution/2015/04/abolish-the-national-raisin-reserve.html

    Do you really think that the answer to high concession prices is some kind of board setting reasonable rates? In 50 years, after movie theaters were long gone, it would still be around funded by the taxpayer and providing free Apple TV to LGBT youth of color, or something equally absurd.

    Hepp

    April 23, 2015 at 2:35 PM

    • “Do you really think that the answer to high concession prices is some kind of board setting reasonable rates?”

      Did I say that’s the answer? Did I ask a question? The purpose of the example was to demonstrate that there’s no competition because businesses have monopoly power.

      But if this problem was severe enough that we would want to fix it, my recommendations would be:

      1. Splitting up the largest movie theatre chains into smaller companies so there would be more competition.

      2. A regulation requiring movie theaters to allow people to bring into the theater any type of food or drink that’s sold at the theatre concession, and to post signs that explain it’s the policy.

      These answers are both examples of where government regulation can help bring about fairer prices NOT by having a “board” set the price, but by allowing more market information and more competition. In other words, by creating the market that libertarians imagine exists today but in reality doesn’t.

      Lion of the Blogosphere

      April 23, 2015 at 2:59 PM

    • A national raisin reserve does sound like a dumb regulation that wastes resources without providing much benefit. Maybe I’m wrong though; it would be good at least to hear the argument of proponents of the reserve. A benefit of the reserve is that it does provide jobs for government bureacrats, which I consider a benefit in this time of high unemployment, however the proponents ot he reserve will probably not tout that as one of the benefits.

      Nowhere did I say that every single government law and regulation was a good thing. Probably half the laws could be removed. The problem is that Republicans are too busy pulling stunts like shutting down the government in order to do anything useful like make the laws and regulations we have better and removes those that aren’t necessary.

      Lion of the Blogosphere

      April 23, 2015 at 3:09 PM

      • At this point, the National Raisin Reserve seems to be maintained legislatively by the farm lobby. In light of this, I’m not sure this effectively illustrates the point you were trying to make.

        Negro of the Bongosphere

        April 28, 2015 at 8:50 AM

      • Whoops – that comment should be to Hepp, not to Lion.

        Negro of the Bongosphere

        April 28, 2015 at 9:07 AM

  16. A couple of items come to mind:

    First, my grandparents were “mom & pop” theatre owners back in the day and the story my granddad told me is that the studios had such control over royalties and ticket prices that he could do little more than break-even. Popcorn and soft drinks have a huge margin even when they sold them pretty cheaply (as they did back then). Concessions saved their business.

    Even at today’s rip-off prices, I wouldn’t mind paying for popcorn and soda, if only the popcorn tasted like it was made in the most recent month. When I helped in the little theatre my grandparents ran, we had the popcorn maker running continuously from right before the door opened until the show began. The machines are really fast, so there is no need to make a bunch way ahead of time.

    dbp

    April 23, 2015 at 2:40 PM

  17. It’s not just the movie theater industry that charges absurd prices for concessions. Food and drink prices at most sporting events are a complete pyramid scam. As are most food options at airports (though that is changing in some places).

    Peter

    ironrailsironweights

    April 23, 2015 at 3:26 PM

    • One exception, is that football stadiums generally have tailgating.

      Maybe people need to tailgate outside movie theaters.

      Raoul Duke

      April 24, 2015 at 12:05 AM

  18. I agree with most of your installments on libertarians, but this is a very weak and flawed example. Theaters ostensibly compete against other theaters– if byof (bring your own food) was a viable business strategy and rewarded by movie-goers, it would’ve happened.

    I’m thinking that any potential non-competitiveness in this industry would stem from movie production company restrictions on whom they are willing to sell licenses to. But I know nothing of that market…

    anon

    April 23, 2015 at 3:26 PM

  19. I bring a six pack of store brand diet cola (1.99), and a few bags of 80c (each) salted popcorn. I have never, not once, been able to finish everything I bring with me.

    Jesse

    April 23, 2015 at 3:29 PM

  20. We always stopped at the gas station to pick up candy before going to the movies. Mama put it in her purse. “Ain’t no way I’m paying five bucks for a soda,” she’d thunder.

    Dain

    April 23, 2015 at 3:47 PM

    • It’s prole to sneak junk food into the theaters. However, 99% of the snacks sold at the concession booths are prolish anyway.

      JS

      April 23, 2015 at 4:41 PM

      • I don’t think it’s prole.

        Being able to afford concession stand prices and sneaking food in = SWPL
        Being poor and not sneaking food in = dumb prole behavior.

        jjbees

        April 23, 2015 at 8:49 PM

      • If that’s the case, I call it dumb NAM behavior. blacks have demonstrated over again, that their lower intelligence and lower future time orientation means less opportunities to exploit the sociopathic American system to their favor, where every other group has taken advantage of it and done well in some point in time!

        JS

        April 23, 2015 at 11:32 PM

  21. I concur movie theaters suck. The disgusting and loud proles are a huge turn off, in addition to the overpriced trash called “food”. As a millennial I have always pirated movies but not so much anymore thanks to Netflix…I have some guilt over pirating new TV and movies but not so much over old films. It seems film companies could careless about the oldies.

    Augustus

    April 23, 2015 at 4:26 PM

  22. Netflix -$10/Mo
    Spotify unlimited – $10/Mo
    Public library for literature and some pop non fiction – Free
    Half.com for anything else.

    One can be poor and get a lot of culture for free (of course proles disdain culture). Now if only higher ed could be reformed a la Germany life would be good.

    Augustus

    April 23, 2015 at 4:38 PM

    • Can you explain what higher ed in germany is like?

      And I doubt reform would help much. The problem isn’t the system, it’s the inhabitants. Ancient Greece had good institutions AND strong social capital. Good institutions are necessary but not sufficient.

      jjbees

      April 23, 2015 at 8:51 PM

      • This I would agree. Welfare subsidies given to lower IQ individuals with poor future time orientation means black america, and also our white trash demographic. Yes, we aren’t Germany, Scandinavia or some Nordic Nation. Hell, we aren’t even Spain or Italy!

        JS

        April 23, 2015 at 11:43 PM

      • The best and brightest are culled for college prior to high school. Smart kids go to college prep high schools while the rest go on a vocational track. Germany has much less college graduates than any other first world country and are doing fine growth wise.

        Augustus

        April 24, 2015 at 1:32 AM

      • I’m viewing profiles of American expatriates who are now living in Canada, and comparing those who are European and White Latin American descent, and it just irks me how so many Americans look like sorry asses, where quite a number of them are overweight, and not very classy looking individuals.

        If you’re a status whore, you would not want to associate with them (what irony for a nation that only cares about status signaling)!

        JS

        April 24, 2015 at 1:21 PM

      • It is believed that Canuckistan gets its fair share of talented Americans, as they send their imbeciles down to our border, guys like William Shatner, Jim Carey and Justin Bieber just to name a few. Maybe times have changed, and both nations are seeing a shuffling of idiots!

        JS

        April 24, 2015 at 1:25 PM

  23. This post could be more succinct, “Capitalism – creating needs in order to satisfy them!” Only the smart can avoid keeping up with the Jones’… for the other 95 percent they will rack up debt to pretend they are something they are not.

    Augustus

    April 23, 2015 at 4:45 PM

  24. OT, sort of. No word on the Seattle CEO who voluntarily took a pay cut to pay all his workers a minimum of 70k a year? How does this CEO square with libertarianism?

    Augustus

    April 23, 2015 at 6:20 PM

    • Publicity stunt. In other words, he’s going to guarantee each of 100 workers approximately $4K per year more than the city average with no mention of the number of hours he’s requiring. How many are already at or near that amount? Plus, it kicks in over three years at which time it will be the city average. So, he’s guaranteeing to pay his workers (100) an average wage for Seattle. Assuming, of course, he’ll be in business in three years.

      Curle

      April 24, 2015 at 6:17 AM

  25. The last movie theater I went to was an iMax to see a documentary on Africa about 20 years ago, and it was very good. My complaint is why do bars charge double the price for a non-alcohol beer than they charge for a regular beer?

    E. Rekshun

    April 23, 2015 at 8:02 PM

  26. the only movie theatre in my town is next to a supermarket. everybody just grabs food from the supermarket before they see a movie.

    james n.s.w

    April 23, 2015 at 9:06 PM

  27. What is your argument? That the current system is biased against people that buy concessions in favor of those that don’t and that there ought to be competing models? That’s probably the case in every industry in some way or another.

    Lloyd Llewellyn

    April 23, 2015 at 10:47 PM

  28. Aren’t cruises much worse?

    Raoul Duke

    April 24, 2015 at 12:16 AM

  29. FWIW, I am going to see Ex Machina this weekend.

    Raoul Duke

    April 24, 2015 at 12:21 AM

  30. I frequent bars/restaurants that are within walking distance of theaters simply because seeing a movie gives me time to sober up before driving home.

    Raoul Duke

    April 24, 2015 at 12:39 AM

  31. I don’t understand why people are arguing that concessions “subsidize” ticket prices. Opening weekend most of the price of the ticket goes to the studios. In later weeks, the theater gets a bigger take, but that’s an incentive to keep showing the picture. Movie theaters derive the vast majority of their revenues from selling overpriced snacks loaded with sodium and sugar.

    I can see how this is a pretty good example of a firm attempting to capture a monopoly. Disneyland has a monopoly on water within “the happiest place on earth,” and can charge obscene prices. As others were quick to point out, you don’t have to go to a theater, and if you do, the government forces them, like Disneyland, to provide water fountains.

    The release windows of Hollywood films are a textbook example of price discrimination. People susceptible to marketing MUST go the night a movie opens, which means they’re paying top dollar. Some people wait for the video, others wait for the rental, and still others can wait until it’s shown on cable, or broadcast on network television.

    Vince

    April 24, 2015 at 1:25 AM

  32. Lion,

    Another thing libertarians get wrong is fundamental innovation. As Mariana Mazzucato pointed out some ideas would never come into being without the government funding during times of very high uncertainty. In her book “The entrepreneurial state”, she amusingly tells how _every_ technology in the iPhone was developed by government agencies/money; how most NME (new molecular entities/drugs) were developed by state agencies. I recommend you read Mazzucato, because she’s one of the few high profile economists who seems to subscribe to your value transference idea.

    In a purely free market, the internet would have never come into being. It would have been too unsure for success & too unprofitable for too long for venture capital to be interested in a worldwide net. The same with the Manhattan project. Or Tesla. Or green energy sources like solar power. And something like CERN would’ve never been built. Nobody would try to develop nuclear fusion.

    One of her recommendations is that VCs shouldn’t have had tax cuts on their investments, because they jump in after all investment risk has gone down. Mazzucato argues they’re transferring value from gov investment to themselves, while they shouldn’t be entitled to it.

    Maciano

    April 24, 2015 at 7:31 AM

    • It’s not proven yet that “green energy” subsidization is going to pan out in favor of value created, but otherwise I agree.

      Lion of the Blogosphere

      April 24, 2015 at 8:12 AM

    • Yes – DARPA, NIH and NSF grants, university endowments, In-Q-Tel, etc., funded the development of virtually every technology in everything you list.

      The Soviet Union, of course, having basically been run by engineers in the post-war period, understood the government’s role in R&D and behaved accordingly with regard to protecting their intellectual property. Unfortunately, though, governments tend to fail at running manufacturing and consumer goods businesses. Who knew.

      As I’ve noted before in commenting on this blog, most intellectuals and class x types are concretely better off in a socialist society – particular with regard to eugenic breeding. The US tax system subsidizes only the extremes of the income distribution, yet the vast majority of Americans vote to encourage same. One can only come to certain conclusions about Americans as a result.

      Negro of the Bongosphere

      April 24, 2015 at 10:07 PM

      • The US tax system subsidizes only the extremes of the income distribution

        Very good point. This comment would make an excellent post discussion.

        E. Rekshun

        April 26, 2015 at 6:19 AM

    • I haven’t read Mazzucato’s book but I’m familiar with some of her claims. People should be careful what conclusions they draw from them. It’s not entirely accurate to say the government created all those innovations. That’s not how advancements in technology happen. Advancements happen through many different people working on different research projects over an extended period of time with each advancement building on the previous. In the cases of the technologies she mentions regarding the iphone, the government didn’t start most of them and they didn’t finish most of them. They were one player in a long line of players. Nor was the government funding the kind of central planning one finds in controlled economies. It was funded by the military to solve specific military problems. Moreover, much of it was outsourced with the government primarily acting as a customer of private contractors and university researchers. That’s very different from using government to manage and manipulate markets.

      destructure

      April 25, 2015 at 1:50 PM

      • The point is that the US government receives zero compensation from their IP, regardless, while VCs and private industry reap the benefits, often not paying any taxes at all. This is the crux of the issue – no need to “be careful” about it.

        Negro of the Bongosphere

        April 26, 2015 at 5:31 PM

      • “The point is that the US government receives zero compensation from their IP”

        It was funded with tax dollars. I see no reason government should charge people to use something they paid for in the first pace.

        “often not paying any taxes at all. “

        I wish.

        destructure

        April 27, 2015 at 1:21 PM

      • Well that’s really the question – are these firms paying? Some firms have an effective 0% US tax rate; others do not. There are lots of ways to concretely deal with this problem – perhaps licensing fees (as many high-tech firms are accustomed to paying) on a scale weighted by tax burden as a percentage of net revenue – but everyone in this discussion seems to be more interested in making rhetorical points.

        Negro of the Bongosphere

        April 28, 2015 at 8:54 AM

  33. No, most libertarians would likely say end antitrust which raises costs, and stop taxing movie theaters, which historically have paid enormous special taxes (originally designed to shut down their use as free venues for union meetings) and must endure discriminatory food licenses.

    This is a really good rule libertarians generally use–if something seems odd, look for the coercive tax or regulation. Don’t examine things out of context, as most economists and commenters do.

    rob

    April 24, 2015 at 7:56 AM

  34. The popcorn I make at home on the stove tastes infinitely better than movie theatre popcorn. I would probably pay the theatre 10 bucks to let me make my own popcorn. The 2 times I’ve been to the theatre in the last year we have brought our own alcohol, but bringing in a bag of cold popcorn seems like more trouble than it’s worth. So we just don’t have popcorn

    Anon

    April 24, 2015 at 10:26 AM

  35. Or you should attend a quality school like Harvard so you can get into a good career track so that you make so much money that spending a hundred dollars to take your family to the movies doesn’t seem like a big deal.

    Lion – Going forward, I’m not even sure if any of this makes any sense. Further, when were most Americans ever rational with their money? Spend now, and deal with the consequences later!

    Sidetracking your discussion again, how is this relevant for the under 30 crowd?

    JS

    April 25, 2015 at 11:19 AM

  36. From Liberal Fascism by Jonah Goldberg. Chp. Fascist Economics (The Fascist Bargain).


    Democrats want to “rein in” corporations, while Republicans clam to be “pro-business.” The problem is that being “pro-business” is hardly the same thing as being pro-free market, while “reining in” corporations breeds precisely the climate liberals decry as fascistic.
    The fascist bargain goes something like this. The state says to the industrialist, “You may stay in business and own your factories. In the spirit of cooperation and unity, we will even guarantee you profits and a lack of serious competition. In exchange, we expect you to agree with -and help implement – our political agenda.”

    Does this pretty much mirror the problems you’ve been claiming to tackle in your little series of barbs at Libertarianism, Lion?

    Later, Goldberg shows how “the Federal inspection of meat was, historically, established at the packers’ request.”

    A spokesman for “Big Meat” (as we might call it today) told Congress, “We are now and have always been in favor of the extension of the inspection , also to the adoption of the sanitary regulations that will insure the very best possible conditions.” The meatpacking conglomerates knew that federal inspection would become a marketing tool for their products and, eventually, a minimum standard. Small firms and butchers who’d earned the trust of consumers would be forced to endure onerous compliance costs, while large firms not only could absorb the costs more easily but would be able to claim their products were superior to uncertified meats.

    He also explains how “US Steel was the product of 138 merged steel firms,” and tried to fix prices with the other large firms. When that failed, they looked to government but the Democrats were still to Liberal (classical) to pass it through congress.

    Under the New Deal, FDR had industry “leaders” gather to write codes for themselves. “For example, the owners of the big chain movie hoses wrote the codes in such a way that independents were nearly run out of business, even though 13,571 of the 18,321 movie theaters in America were independently owned.”

    I’m sure if Lion were King, he’d pass a law forcing all theatres to have at least 3 separate concession vendors. Vendors could come and beg him for the right to be one of the 3 just to ensure that there would be NO CORRUPT KICKBACKS! NONE! NONE! NONE!

    If you want to continue along this fascist line of reasoning, Lion, go ahead. Hand over your conservative card. You’re no longer a member.

    culdesachero

    April 25, 2015 at 3:40 PM

  37. I don’t have a problem with theater owners operating concessions as long as you can bring in food from outside. Why can’t someone buy something and bring it in? These movies today suck anyway. There’s about two pages of dialogue and plot with ninety minutes of sex and violence.
    Whole families used to go to movies back in the day, but now these theaters are filled with hoodrats and lonely old ladies without a man. I wouldn’t watch Fat and Furiously Stupid anyway, but if I wanted to see a movie I could wait a month and see it on DVD without some assclown screaming into his sailfoam and hearing a baby crying because some welfare queen can’t afford a babysitter!

    Joshua Sinistar

    April 26, 2015 at 7:39 AM

  38. A better way to understand personal spending is everyone has something that they are a spendthrift on and something that they are are cheap on. People who claim they are cheap at the theater because they do not purchase food probably are a spend thrift when it comes to something else. Every few people are cheap on everything (just look at housing).

    A general rule of thumb for any business is that most of the profits come from 20% of the customers whether it is theaters, clothing, car sales, or vacations.

    superdestroyer

    April 26, 2015 at 10:52 AM

  39. Am I the only guy who used to sneak beer and booze in?

    Tanked

    April 26, 2015 at 11:37 AM

  40. Speaking of lack of transparency in the remuneration of executives, there are closed end funds specializing in reinsurance. They must detail their fees. So why no just buy the shares of a reinsurance company? Perhaps only because it takes some digging to find out what their expense ratio is.

    Every insurance company does nothing other than take money in and pay money out just like a hedge fund pays out when it’s short a dividend or coupon paying security. Insurance companies are basically super crappy hedge funds.

    selecao

    April 27, 2015 at 12:38 AM

  41. Certainly here in the UK you can take your own food and (non-alcoholic) drinks in with you. I do it all the time and no-one’s ever tried to stop me.

    Jonathan

    April 28, 2015 at 7:37 AM


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