I don’t like movie theater investing. About 85% of that $11 ticket you buy goes to the content creator for the movie you’re about to watch, and only 15% makes its way to the owners of the theater itself. The entire basis for owning stock in movie theaters is because you are compelled by the concession stand sales. Given that moviegoers encounter ballpark pricing with $4 candy bars and $5 soft drinks at the movies, I don’t see much room to raise concession stand prices without encountering an offsetting steep drop in demand.
This means that growth needs to come from increased foot traffic. I don’t see that happening either, as the proliferation of large in-home TVs and the rise of Netflix have dampened consumers’ appetites for the enjoyment of the theater experience. You can see this in the numbers, as movie foot traffic declined by about 2.5% annually from … Read the rest of this article!
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