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Do you like my Cable TV business suggestion?
Carmike Cinemas is the 4th largest cinema circuit in the USA, although it is considerably smaller than Regal or AMC.
In their annual report of last year they give the following information out of 50 million ticket sales.
$6.85 Average admission per patron
$3.69 Film exhibition costs
$4.20 Other theater operating costs
Resulting in an average loss of $1.05 per ticket
From concession sales the Carmike corporation makes up the above loss, pays for the cost of the candy, general and administrative expenses (front office expenses),severance agreement charges, depreciation and amortization, loss on sale of property and equipment, impairment of long-lived assets.
Most people understand that a business has overhead, and the candy sales are what pays the front office, the other business expenses and makes the company profitable.
Why would it make any difference if a cable company revealed their costs to the networks over the last 10 years? Perhaps they could bill double the transmission costs plus a small customer fee of about $10/month.
The advantage is that it might make some customers sympathetic to the cost of providing cable service if they see how much syndication fees increase every year. Instead I think that keeping customers in the dark, makes them angry. Some customers are perpetually changing their service looking for the best teaser rates.
