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OM in the News: Scheduling Star Wars to Maximize Profits

December 22, 2015
A Darth Vader serves popcorn to fans on opening night of Walt Disney Pictures And Lucasfilm's "Star Wars: The Force Awakens"

A Darth Vader serves popcorn to fans on opening night of Walt Disney’s “Star Wars: The Force Awakens”

Star Wars: The Force Awakens is playing in more than 4,100 U.S. theaters this week. And with many cineplexes running non-stop shows in multiple theaters, that adds up to tens of thousands of showings. For Disney, the math is simple: Sit back and watch hundreds of millions roll in. But for movie theaters, reports Marketplace Business (Dec.18, 2015), scheduling Star Wars in order to maximize profits requires some pretty elaborate calculations. There are many factors that come into play when setting a schedule: estimated ticket sales, number of screens devoted to the movie, time it takes cleaning crews to get in and out, and weather and holidays.

While it might seem easier to schedule Star Wars every 15 minutes, this actually is more difficult. First, because the movie is being released in 2D and 3D, theater owners have to predict the demand for both. They also have to decide which other movies they will stop showing to make room for Star Wars. (Theaters don’t start to cash in big on ticket sales until a movie has been playing longer.)

The real money is made at the concession stand. Theaters keep about 5% of ticket sales. Profit margins on concessions can run as high as 85%. It’s essential theaters schedule their movies to start and end at different times. They don’t want too many people coming and going simultaneously which create crowds that slow down the concession counter. Get it wrong, and they will have crowds waiting to buy tickets, in line for the bathroom–and not buying Junior Mints. Some theaters use algorithms and software to do their scheduling. Others still take their cue from Han Solo and go with their gut.

Classroom discussion questions:

  1. What scheduling tools could theaters use?
  2. Why is this such a complex issue?
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