The FDA proposed new rules last week that require chain restaurants and other places selling food to post calorie counts. (This stems from a provision in last year’s health care overhaul.) The rules, which are expected to go into effect next year, exempt alcoholic drinks served in restaurants as well as movie theater snacks.
Why are movie theater snacks exempt? It’s not because they are so healthy or anything. It’s actually because theater owners lobbied the FDA and Congress, arguing that “the proposed rules are an unwarranted intrusion into their business because people visit theaters to consume movies, not food.” As the L.A. Times notes, “Theater operators have a vested interest in fighting the proposed rules, as they generate up to one-third of their revenue from selling popcorn, sodas and other snacks.”
What goes unmentioned in the story is the fact, reported last week, that movie theater attendance is down 20 percent so far this year compared to last year. Movie theaters are hurting. Ticket prices are at an all-time high, reaching $7.89 per ticket in the U.S. last year, but the number of tickets sold per person is plummeting. (Last year, there were 4.1 tickets sold per person, the lowest since 1993.) Theater chains have long made up for declining attendance by supplementing their income with pre-movie ads and renting out theaters for special events, but this doesn’t take away from a key fact of the film business: Theater owners are on the wrong side of the battle over movie revenue.
This isn’t much of a secret. Much of the money earned by a movie in its first two weekends goes right to the studios. Over the last decade and a half, the shelf life of major movies has plummeted; there are rare movies like “Avatar” and “The Hangover” and “Inception” that hang around for weeks, raking in the cash, but the majority of big movies earn most of their money in the first few weekends and disappear. The blockbuster-oriented summer release schedule rotates new movies in and out of theaters as well as the public consciousness (ramping up the ads in the weeks before release and promptly yanking those ads by the time the film has been out for 10 days in order to make room for the studio’s next offering) with incredible speed. The studios have found a way to work with this, since the theater releases often double as extended advertisements for the movie’s inevitable sale on DVD, Blu-ray and, now, digital download.
Audiences are opting to stay home more and more, and this is something theaters and studios alike have been fretting about for several years. Studios can make up for this financial loss by figuring out how to charge for digital content, selling copies of the movie, licensing their products for merchandising tie-ins and selling the cable broadcast rights. Movie theaters have a limited way to wring money out of audiences. Their ace in the hole has long been the snack stands. If you’re in the theater, you’ve already spent some money, you’re already there and it’s an “outing.” Why not get a soda and candy to enjoy during the movie? You’re already there. Besides, if you bring in outside food, it will be tossed (well, ostensibly, but that’s besides the point).
Movie theater owners are also not stupid. If audiences knew precisely how horribly unhealthy their snacks were — again, read this — they might be less likely to buy the overpriced popcorn and soda at the theater. The new FDA rules are supposed to make it easier for consumers to choose healthier options, because more information is better, right? You’d think that would also apply to consumers who are in a situation where they have only one option for food. I guess the silver lining here is that with fewer and fewer people going to the movies, at least that means fewer people are going to purchase such unhealthy eats.
