A movie ticket is not revenue for the theater in the way a restaurant bill is revenue for a restaurant. Most of an opening weekend's money leaves the building, and the terms explain much of how American exhibition operates.
The split slides across the run
Distributors and exhibitors agree in advance on how box office receipts are divided, and the division shifts as the weeks pass. The studio takes the largest share at the start.
In the first week of a major release, the distributor's share is very high, leaving the theater a thin remainder. By the fourth or fifth week the proportions have moved substantially toward the exhibitor.
The logic is that the studio funded the film and the marketing that created opening demand, while the theater's contribution grows as word of mouth rather than advertising fills seats.
Long runs are worth more than they look
A film still playing in its sixth week may draw modest crowds, yet the theater keeps far more of each ticket than it did at launch. Small audiences late in a run can outperform large ones early.
This is why exhibitors resist shortened windows and why they hold successful films longer than the crowds alone would justify. The economics improve as attendance declines.
It also explains the appeal of re-releases and repertory programming, where terms are simpler and the theater retains a larger portion of a smaller gross.
Concessions carry the business
Food and drink margins are very high and are not shared with distributors. A theater keeps essentially all of what it sells at the counter.
The building's fixed costs, including staff, projection equipment, rent and utilities, are largely covered by that stream rather than by admissions.
Pricing follows from this directly. Concession prices are set against the need to fund a building, not against the cost of the popcorn, and outside food policies exist to protect the arrangement.
Guarantees and holdovers shape bookings
Agreements often include minimum commitments, requiring a theater to play a film for a set number of weeks on a set number of screens.
A disappointing opening therefore occupies auditoriums that would earn more showing something else. Booking is a portfolio decision made weeks in advance under uncertainty.
Smaller independent theaters, with fewer screens, feel this most acutely, which is part of why their programming diverges from the multiplex.
Premium formats change the arithmetic
Large-format and enhanced screens carry surcharges, and the additional amount is divided under separate terms that often favor the format's licensor.
Building and maintaining those auditoriums is expensive, so the payoff depends on a steady supply of films shot or finished for them.
The result is a two-tier exhibition business, in which a handful of premium rooms subsidize a larger number of conventional ones.