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Movie Theater Snack Scam: Can We Take on Theaters For Ripping Us Off?

Finally, one man is going up against corporate theaters for excessive concession stand mark-up.

Exorbitant fees have been imposed upon American consumers for years, but it seems like only recently have we begun fighting back en masse. (Or, at least, that our fight has made it to the media.) The widespread popularity of Occupy clearly shows that the country reached a breaking point somewhere between the economy wrecking, the big-bank bailout, the foreclosure crisis, and corporations' crusade to nickel-and-dime the already-strapped, average American consumer. The best example of this has been the Move Your Money campaign, which encourages consumers to transfer from big banks with ridiculous fees to more consumer-friendly credit unions and small banks, and which has had an impact. But other signs are emerging that America is becoming increasingly frustrated with high-price scams on a global scale.

Enter Joshua Thompson, a 20-something from Livonia, Michigan, who is suing his local (corporate) movie theater for its unwarranted and unfair pricing of concessions like candy, popcorn and soda. According to the Detroit Free Press:

Thompson said in his lawsuit that he used to take his own pop and candy to the AMC in Livonia until the theater posted a sign banning the practice.

On Dec. 26, he paid $8 for a Coke and a package of Goobers chocolate-covered peanuts at the Livonia theater -- nearly three times the $2.73 he paid for the same items at a nearby fast-food restaurant and drug store, the suit said.

The suit accused AMC theaters of violating the Michigan Consumer Protection Act by charging grossly excessive prices for snacks.

What’s most surprising about this story is not that there’s a law allowing Thompson to sue, but that it’s taken this long for someone to take action. When the Free Press rang the National Association of Theater Owners, it reported that a staff member “angrily hung up the phone when asked about industry snack pricing practices.” In 2007, a piece quoted a food service strategist that in comparison to restaurant profits, which is about 60 to 75 percent on food, movie theaters earn around an 85 percent profit on their concessions. In that same article, a director of operations at a local theater said that mainstream chains actually look at their theaters as food services. "I worked for Loews for five years,” said Ian M. Judge of LEI Theaters, “and I can tell you that I was told many times that we were not a theater but a restaurant that happens to show movies.”

That piece attributed the mark-up to Hollywood itself, and the film profit split between theaters and movie studios—theaters say that they’re trying to make up for the earnings they lose in opening weeks, when studios rake in about 90 percent of the profits. Which makes sense for independently owned theaters... but for corporate ones, without which the Hollywood movie industry simply would not exist, this seems like a disingenuous explanation. Knowing the power AMC and Lowes and the like have to distribute films, why wouldn’t they have negotiating power with studios? It does not compute.

So in 2012, grousing about movie concessions prices on one hand is a common enough occurrence. So why hasn’t anyone taken on theaters before? The answer lies beyond the current resurgence of people power. For over a century, movie theaters have been considered sacred spaces. When they were first developed in the late 1800s, they represented the new, bright future of America at the turn of the century, when Thomas Edison’s innovations were beginning to change the culture of the country.

By the time the 1920s rolled around, classic theaters with elaborate architecture—like Hollywood’s classic Grauman’s Chinese Theater, which was built in 1927—solidified the movies as a place for glamour, to be seen and to indulge in fantasy. This concept of the movie theater prevailed through economic flux time and again (including the Great Depression), and through several wars as well, so that despite its capitalist underpinnings, the modern movie theater became a sort of makeshift town square for America—a public space where all types of people could come together and have a shared experience. (Even if that shared experience has included smuggling in more affordable snacks, or reluctantly dropping $16 on a popcorn and soda.) Americans view movie theaters with inherent fondness, and so perhaps the economics of it have been a painful side effect to participating in an American pastime.

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