Motion Picture Herald (1954)

Population of Area Served THE QUESTION Up to 7.000 7,500-30,000 ?0, 000-700, 000 ■> Over 700,000 National Average For each dollar of admission gross the refreshment gross is . . . 340 310 360 42 0 39.5(1 The refreshment dollar is divided: For beverages 39 0 41 (1 44^ 49 0 43.2(1 For food 490 470 51(1 43^ 47.5(1 Candy and gum 120 12(1 5<j‘ 80 9.2(1 'h£uj\ NIBBLES ABE A BIG BITE AT DBIVE-INS FOR every dollar of gross at the box office, drive-in theatres nationally now gross thirty-nine and a half cents at their refreshment stands, giving them a total of about $120,000,000 of the $250,000,000 spent annually for food and drink by the movie-going public. Breaking down the box office dollar, drive-in theatres nationally spend four cents more on house expenses than indoor theatres, two cents less for the staff, three cents less for the show, about the same amount for their sales approach, and earn a paper profit, before taxes, of about one cent more. These are the salient facts in the second half of The HERALD Institute of Industry Opinion report on drive-in theatres. The first half of this comprehensive study of the operations, policies and procedures of the drive-in exhibition plant today, first of its kind, was published in The HERALD last week. It covered runs, competition, types of equipment, admission prices, most favored kinds of pictures, and average opening and closing dates. Refreshment Sale Role Now Determined Ever since drive-ins started to mushroom in the early post-war years it has been evident that refreshment sales were an important part of their operation but no exact determination of their role has been made until now. Estimates of the gross per admission dollar have ranged from 30 cents to 50 cents. The Institute’s national average of 39.5 cents is as of this summer but there are indications that the market is growing. In considering the size of the drive-in refreshment gross in proportion to the national total, it is to be remembered that as was shown in last week’s article only one-third of the drive-in installations are open all year. It is estimated that the refreshment gross in indoor theatres averages 10 cents per dollar of admission gross. A clue to the fact that the gross shown is HOW THE DRIVE-IN BUDGETS THE BOX-OFFICE DOLLAR Indoor Theatre Major Expense Categories Average* THE HOUSE Drive-in Theatre Average Rent or the equivalent, mortgage payments, depreciation of buildings and equipment, any other costs of physical operation of the real estate 21(1 250 THE STAFF All salary and wage payments to employees, regular and part-time. Cost of uniforms, etc. 27<; 250 THE SHOW Film rental, cost of stage shows, etc. 37(1 340 THE SALES APPROACH All advertising, publicity, exploitation and promotion costs; trailers, etc. V 90 OPERATING PROFIT Before state and Federal income taxes and without concession profits. . 60 70 *Established in Institute report published July 31. far from saturation is the rise shown in the table on this page from 34 cents of refreshment gross per admission dollar in drive-ins serving small population areas to 42 cents in those operating near the largest centers of population. The latter, of course, have the more elaborate facilities. More Is Spent for Food Than Beverages The breakdown of the refreshment dollar shows that more is spent proportionately for food than for bevarages in all population categories except the largest. Also, again reflecting the smaller installations in those theatres serving smaller population areas, the sales of candy and gum are proportionately the largest in these theatres. Differences in the "rule of thumb” or basic breakdown of the box office dollar, be tween indoor theatres and drive-ins are the result of differences in the essential operation. Thus the drive-in, with its enormously larger real estate investment, allocates 25 per cent for "The House” against 21 per cent for the indoor theatres. On the other hand expenditures for staff and for the show are lower, largely because of the shorter operating hours and smaller staffs and the generally lower rental that is paid for the lm. The profit figure, before taxes, indicates ine cent more than the average for indoor heatres. But it must be remembered that he six-cent average for indoor theatres inluded an indicated loss for many of the mailer indoor theatres in operation. Interestingly, the figure for advertisin ncl promotion is the same for both types oi heatres. 12 MOTION PICTURE HERALD, OCTOBER 2, 1954