Film rental

A cinema does not keep its box office. A negotiated share goes to the distributor, and on a major release in its opening week that share is the larger half. It then declines week by week as the title ages, which is why the fourth week of a hit can be more profitable per admission than the first.

Three structures cover most deals. A sliding scale sets a percentage per week of run — highest at the start, stepping down thereafter. Firm terms agree one percentage for the whole engagement, which is simpler and common for smaller titles and smaller circuits. A house nut deal, now rarer, allows the cinema to deduct an agreed operating allowance before splitting what is left.

Aggregate rental across a year typically lands somewhere around half of box office revenue, higher for circuits weighted towards blockbusters and lower for those playing more independent and repertory product.

If roughly half of every ticket leaves the building, ticket revenue alone will not carry a cinema. Concessions do — the margin there is retained in full, and spend per head is the number that separates a good year from a bad one at identical admissions.

This is also the commercial logic behind loyalty schemes, advance booking and app ordering. Anything that raises attach rate or basket size lands on the side of the P&L the distributor has no claim on. A ticket price rise is shared with the distributor; a concession attach rate rise is not.