A study shows that the concession stand accounts for well over half
the profits at most theaters.  Given this, what are the benefits of
the staggered movie times allowed by multiple screens?  What is the
benefit to a multi-screen theater of locating at a shopping mall?

Hi boobee-ga,

Let's consider each of the benfits individually:

#1: Benefits from Staggered movie times

Staggering the start times of movies within a theater complex will
invariably result in moviegoers arriving at the theater at a
consistent rate. This means that the concession stand can minimize the
following sitations:
1. Extremely long lines
2. No business for a given time interval

Instead, customers arriving for different movies will come to the
concession at different times. This ultimately results in fast
service, encouraging additional purchases by those who would otherwise
bypass the concession if the lines were deemed to be too long.

#2: Benefits from Locating at a shopping mall

While the primary purpose of a mall is to purchase various goods,
there is certainly a group of people who would value a movie theater
in the mall (ie. a parent who needs to shop alone and requires
something to occupy the children). The fact that the theater is
multi-screen simply improves the odds that one of the movies currently
playing will appeal to those people who may see a movie depending on
what is showing. As a result, there are additional people coming into
the theatre to watch movies and there is now an increased probability
of a concession purchase. Furthermore, assuming that non-moviegoers
can access the concession, there is now a chance for people who just
want a snack to simply enter, buy, and leave.


I hope that helps you understand the economic reasoning behind these
types of moves. Feel free to post a clarification if you have any
problems understanding the information above :)

Cheers!

answerguru-ga