Income

Cinemas derive their income from several sources, the most important being:

• Ticket sales (and membership income if applicable)
• Food, drink and merchandising sales
• Advertising revenue (screen and brochure)
• Public funding

The majority of their income though, is from screening new release films and selling confectionery, fast food and ice-cream to the audiences who attend. A hit film results in high ticket income and high concession sales. And vice versa. There is comparatively little that a cinema can do if there is a poor run of film releases, as the large cinema circuits in the US and UK found during the disappointing summers of 2000 and 2010. Income is calculated as total admissions x average ticket price, while concession revenues are based on average spend per admission.

Illustrative Income Projection (all figures exclude VAT):

Estimated annual admissions 80,000 for a 3 screen cinema

Average ticket revenue £6.00

Annual ticket income £480,000

Film rentals (@38%) (£182,400)

Net ticket income £297,600

Concession income (£1.25 x 80,000) £100,000

Concession cost of sales (£40,000)

Net concession income £60,000

Screen advertising £20,000

Brochure advertising £5,000

Bar & Cafe net profit £30,000

Total annual net income £412,600