How large must a cinema be to receive release-date films from the studios? - AVS Forum
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post #1 of 23 Old 10-17-2012, 11:13 AM - Thread Starter
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If one were to open a small theater, possibly no larger than 40 person capacity, would we be able to get the new releases from studios? I'm not referring to Blu-Rays, but to the actual digital releases that are given to theaters to sell tickets and make money in the box office.

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post #2 of 23 Old 10-18-2012, 12:24 PM
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I have to say I have never heard of a single screen cinema with so few seats and because of that it is really hard to answer your question. Maybe with a digital projection system, a good booking agent and a large minimum rental price it could be possible but single screens are rarely profitable much less a 40 seat single screen.
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post #3 of 23 Old 10-18-2012, 03:43 PM
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Not sure what application you had in mind, but for $50,000, you can acquire a server and a license now. Then, for $500 per film, you can see them in your home on opening day.
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post #4 of 23 Old 10-19-2012, 12:41 AM - Thread Starter
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Originally Posted by Axel Fransberg View Post

I have to say I have never heard of a single screen cinema with so few seats and because of that it is really hard to answer your question. Maybe with a digital projection system, a good booking agent and a large minimum rental price it could be possible but single screens are rarely profitable much less a 40 seat single screen.
The application will be at a ski resort, so it's possible it could be larger than 40 people. Depending on the space we'd be able to get, it could end up seating around 75-100. However, the profitability will not be from the movies, but rather from the food and wine service. Think of it as a dinner theater, but one offering current films, depending on the quality of the current film. If there aren't any good movies currently out, then we'll pick from our extensive Blu Ray collection and show that instead. Do you think this could be possible?

Some advantages to keeping the size down are:
  1. The resort is still developing and, until we know how popular the venue is, we'd like to minimize the initial investment and ensure we can keep seats filled.
  2. Having fewer people keeps the wait staff small so they can offer individual service. This will be a high-end venue and we must offer a service that commands the price we will charge.
  3. Fewer seats means a smaller screen, therefore a home theater projector could likely be used instead of needing to invest in an ultra-expensive Christie or Barco commercial projection system. There are plenty of home theater projectors that are significantly better than the commercial ones that I'd prefer to use, but only if it will be bright enough.

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Not sure what application you had in mind, but for $50,000, you can acquire a server and a license now. Then, for $500 per film, you can see them in your home on opening day.
So you're saying that for about $55k I could show a current film (not including theater construction and other costs, obviously)? How do the royalties to the studios work out? I can't imagine they'd be too happy to hear that I'm showing their film and keeping 100% of the revenue from ticket sales.

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post #5 of 23 Old 10-19-2012, 12:28 PM
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Originally Posted by Frosteh View Post

The application will be at a ski resort, so it's possible it could be larger than 40 people. Depending on the space we'd be able to get, it could end up seating around 75-100. However, the profitability will not be from the movies, but rather from the food and wine service. Think of it as a dinner theater, but one offering current films, depending on the quality of the current film. If there aren't any good movies currently out, then we'll pick from our extensive Blu Ray collection and show that instead. Do you think this could be possible?
Some advantages to keeping the size down are:
  1. The resort is still developing and, until we know how popular the venue is, we'd like to minimize the initial investment and ensure we can keep seats filled.
  2. Having fewer people keeps the wait staff small so they can offer individual service. This will be a high-end venue and we must offer a service that commands the price we will charge.
  3. Fewer seats means a smaller screen, therefore a home theater projector could likely be used instead of needing to invest in an ultra-expensive Christie or Barco commercial projection system. There are plenty of home theater projectors that are significantly better than the commercial ones that I'd prefer to use, but only if it will be bright enough.
So you're saying that for about $55k I could show a current film (not including theater construction and other costs, obviously)? How do the royalties to the studios work out? I can't imagine they'd be too happy to hear that I'm showing their film and keeping 100% of the revenue from ticket sales.

If there are home theater projectors that are significantly better than DCI projectors that's news to me?, anyway you can not even play the digital files studios send you with home theater projectors because they are encrypted so that they can only be used on DCI compliant devices. Without 3D the cheapest projector+server prices are around 50K, the sound system could be another 50K.

The rental for the movie is either a percentage of the ticket revenue or a fixed weekly rate, how large a percentage and how much the weekly rate is depends of the movie and the theater so it's hard to say what your ski resort would have to pay. I would guess you could get most movies on opening week but if you can get your concept to be profitable I can't really say.
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post #6 of 23 Old 10-22-2012, 06:29 AM
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It seems to me that as time has passed, evaluation of projector quality has devolved into the single metric of on/off contrast. I find this to be particularly prevalent in the 3000k + forum, where many do not see the value of more expensive home cinema or dci projectors. On/off contrast is espoused as the reason why these more common projectors outperform their more expensive brethren. While obviously important to the cinema experience, I am not entirely sure why this metric has trumped all of the other metrics that contribute to overall image quality.

My guess is that this overriding on/off contrast metric is why the poster described the numerous home theater projectors available as superior to their dci counterparts.

Just my 0.02.
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post #7 of 23 Old 10-24-2012, 08:36 PM
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Frosteh I suggest you try Film-Tech.com and check out there forum. Many guys in the industry on there that could answer all our questions on starting up a cinema.

www.film-tech.com

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post #8 of 23 Old 10-24-2012, 08:39 PM
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Quote:
Originally Posted by Kevin Snyder View Post

It seems to me that as time has passed, evaluation of projector quality has devolved into the single metric of on/off contrast. I find this to be particularly prevalent in the 3000k + forum, where many do not see the value of more expensive home cinema or dci projectors. On/off contrast is espoused as the reason why these more common projectors outperform their more expensive brethren. While obviously important to the cinema experience, I am not entirely sure why this metric has trumped all of the other metrics that contribute to overall image quality.
My guess is that this overriding on/off contrast metric is why the poster described the numerous home theater projectors available as superior to their dci counterparts.
Just my 0.02.

+1

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post #9 of 23 Old 10-28-2012, 08:42 AM
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have you considered going the opposite route of renting classic film prints instead and getting a used 35mm system? Classic being anything from 1940-2010 BTW.
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post #10 of 23 Old 11-03-2012, 08:28 PM - Thread Starter
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Quote:
Originally Posted by Kevin Snyder View Post

It seems to me that as time has passed, evaluation of projector quality has devolved into the single metric of on/off contrast. I find this to be particularly prevalent in the 3000k + forum, where many do not see the value of more expensive home cinema or dci projectors. On/off contrast is espoused as the reason why these more common projectors outperform their more expensive brethren. While obviously important to the cinema experience, I am not entirely sure why this metric has trumped all of the other metrics that contribute to overall image quality.
My guess is that this overriding on/off contrast metric is why the poster described the numerous home theater projectors available as superior to their dci counterparts.
Just my 0.02.

I must disagree with you there. Most DCI projectors sacrifice picture quality especially contrast, for brightness. When I go to a movie theater, even the high end versions, the image looks flat compared to my home theater. Granted, this is a personal preference but I have yet to see a DCI projector that can match the picture quality of a JVC, Sim2, Runco, etc.

That said, each is designed for the space it will be put in and compromises must be made for each.

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have you considered going the opposite route of renting classic film prints instead and getting a used 35mm system? Classic being anything from 1940-2010 BTW.

I briefly considered it but I won't go that way simply because running one would be a royal pain. The people working at the resort are mostly 18-24 year old Australians that have no interest in working a film projection system. DCI would be much easier, and running a Blu Ray theater would be even simpler.

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post #11 of 23 Old 11-03-2012, 10:19 PM
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Quote:
Originally Posted by Frosteh View Post

I must disagree with you there. Most DCI projectors sacrifice picture quality especially contrast, for brightness. When I go to a movie theater, even the high end versions, the image looks flat compared to my home theater. Granted, this is a personal preference but I have yet to see a DCI projector that can match the picture quality of a JVC, Sim2, Runco, etc.
That said, each is designed for the space it will be put in and compromises must be made for each.

This is a common misconception because most people have never had the opportunity to compare a true high quality DCI projector in a completely darkened room with a consumer projector.

When you go to a theater there is all sorts of lighting that remains on during the movie which further leads to the idea the projector lacks contrast.

I currently have a Barco DP4K-23B and prior to that I had a DPI Titan Reference 3D. I have had other DPI projectors, SIM2, and Runco. While the Sim2 HT5000 and the DP Titan are top notch projectors, the Barco's contrast compares very well. Furthermore the Barco beats all of the consumer projector in every other category. Ie convergence, uniformity, color space, modularity and upgrade ability.

I was too a disbeliever. But once you see a properly setup DCI unit you will never go back to a standard consumer projector and that is just comparing alternative content. Ie blu-ray.

With DCI content, you can't even begin to compare. Like apples to oranges.
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post #12 of 23 Old 11-04-2012, 02:07 AM
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Originally Posted by Frosteh View Post

The application will be at a ski resort, so it's possible it could be larger than 40 people. Depending on the space we'd be able to get, it could end up seating around 75-100. However, the profitability will not be from the movies, but rather from the food and wine service. Think of it as a dinner theater, but one offering current films, depending on the quality of the current film. If there aren't any good movies currently out, then we'll pick from our extensive Blu Ray collection and show that instead. Do you think this could be possible?
Some advantages to keeping the size down are:
  1. The resort is still developing and, until we know how popular the venue is, we'd like to minimize the initial investment and ensure we can keep seats filled.
  2. Having fewer people keeps the wait staff small so they can offer individual service. This will be a high-end venue and we must offer a service that commands the price we will charge.
  3. Fewer seats means a smaller screen, therefore a home theater projector could likely be used instead of needing to invest in an ultra-expensive Christie or Barco commercial projection system. There are plenty of home theater projectors that are significantly better than the commercial ones that I'd prefer to use, but only if it will be bright enough.
So you're saying that for about $55k I could show a current film (not including theater construction and other costs, obviously)? How do the royalties to the studios work out? I can't imagine they'd be too happy to hear that I'm showing their film and keeping 100% of the revenue from ticket sales.

it is funny you mention this I have argued many times with people that the movie theaters should try to go this way. Mainly because now days anyone with a couple thousand can build a home theater that is good enough to be more comfortable than the dirty small seat packed movie theaters that are so common in America, and that does not even get into the noise that kids make and what not.

In other countries you see alot more of the Cinema being an event, and experience. You can buy things like a love seat instead of chairs and table. I do not live in the biggest of cities but I have not run into that in America. Lots of movie theaters are going out of business in every town I go to.
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post #13 of 23 Old 11-07-2012, 12:22 PM
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I have been involved with cinema exhibition for the last decade and a half or so. I can tell you that you will almost certainly not make money playing first-run films ina 50-seat single-screen venue, regardless of the kinds of concessions you are selling.

First, to book a first-run picture, you will potentially need to compete with other theatres in your area ("clearance issues")--for obvious reasons, distributors will not give the same title to two nearby theatres. You will have to check with the distributors about this. If you have no other first-run venues within, say, 5-10 miles, this might be a nonissue, in which case you would be able to potentially book whatever you want.

Second, when booking first-run titles, you need to commit to the distributor that you will show the picture, exclusively, on a screen (your only screen) for a specified period of time, typically at least two weeks, and often three. Most titles will be played-out after the first week and a half, which is why so few single-screen theatres are playing first-run. You will also need to commit to paying a minimum guarantee versus a per centage of the boxoffice gross (typically 50% or more over the course of the film's run--you pay either the guarantee or the per centage, whichever is higher). The guarantee would likely be a limiting factor for a venue with so few seats, so you would probably be losing money on every title that you play.

You also have other expenses that need to be paid, regardless of whether anyone shows up to buy tickets: rent, insurance, depreciation, staff, booker, film/hard disk shipping, maintenance, cleaning, etc. This will eat you alive in a single-screen theatre with 50-odd seats.

My experience in the industry is with 35mm (still an option), but digital projection doesn't change the economics in any sort of fundamental way (it actually makes them worse, due to the more expensive equipment and maintenance and faster depreciation).

In short, you really want to have at least 2-3 screens with at least 100-200 seats if you are playing first-run, even in a small town/open zone. You need to be able to always have a picture that people want to see, and a 3-week-old title won't be it (in most cases), and you need to be able to meet guarantees. Also, most people don't want to see movies in a 50-seat venue...that's a screening room, not a movie theatre. You need to be able to provide them with a reasonably large screen (say, 20-30' wide, at minimum) and an awesome "big room" sound system, which you can't do in a screening-room-size venue. Finally, with a dinner theatre especially, you need to justify the cost of the kitchen staff, and spread out their workload. A single-screen venue gives you the worst possible situation here.

A better option for what you are considering would be to try a cinema/drafthouse type of venue (playing older titles, possilbly art-house titles, without minimum run guarantees and typically at 35% flat). That way, you could play a double-feature each night (probably separate admission, though), charge less, and make more money. Art-house films also typically have longer shelf lives than mainstream hits, and play better late in their run.

Regardless of any of this, film exhibition is not a great business model in most cases. You could probably generate better grosses per square foot with just about any sort of retail. The only reason to do it in your case would be to get people into the building to show them whatever else you have to offer.

Finally, there is no way that you will be playing mainstream first-run anything on any type of projection system other than 35mm or DCI-compliant. The distributors are (wrongly, IMHO) super-paranoid over piracy and would never think of sending out unencrypted copies of their percious material.
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post #14 of 23 Old 11-07-2012, 03:55 PM - Thread Starter
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Wow, great reply.

We would be the only theater within a very long distance (at least an hour drive). So, that problem is then eliminated. However, we would still face, as you're saying, the problem of the booking fees. For such a small theater, I doubt the studios and distribution companies would agree to a percentage basis since that would net them very little revenue. This means we'd be paying a flat fee that we likely couldn't afford.

So far, it doesn't sound like this venue will work. Add in all the other costs of running our business and there is very little, and likely even negative, ROI.

That said, let's assume we go with previously released titles. Do studios release older titles within the past couple years in the DCI formats? If so, do those have the same requirements and minimum run guarantees as the current titles? For instance, let's say I wanted to show The Dark Knight. Being that it is long since in theaters, would a studio still require me to exclusively show that on my screen? Or would I be able to lease a few titles from them and show them at different times throughout the day?

Lastly, let's assume that won't work either. That leaves me with the only option of showing Blu-Rays. Do you know what the costs and royalites are for showing a Blu-Ray film, if there are any? This may be the best method out of all of these since Blu-Rays are readily available and inexpensive. That said, I don't want to start showing them and then receive a lawsuit for copyright infringement for not paying the royalty to show it.

Thank you very much for your help!

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post #15 of 23 Old 11-07-2012, 04:41 PM
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So, you have no clearance issues. That is good. If you play first-run, and want to pay for it, you could get pretty much any wide release that you want. But you will lose money on it.

Yes, the last couple of years' worth of titles should be available in DCP format. Remember that DCP didn't really take off until 2009/2010 or so, so older titles may or may not be available. Yes, once a title is no longer first-run (usually 4-8 weeks, but maybe longer for huge hits like Dark Knight), you can split the screen and will probably be paying something like 35% vs. a low guarantee like $250-500 per booking. You could do this without problems. The issue that you will run into there is that you will be competing with PPV/Netflix/etc. if you ar marketing to old people or teenagers, it might not matter. If you are marketing to middle-aged couples, it might. You would probably have to have lower prices (no one will pay $10 to see a movie that is already available on cable or video) and provide something very special in your venue. It can be done, and has been done.

You could potentially license titles on Blu-Ray or DVD, but I strongly discourage it for two reasons: 1) I don't trust the formats as being reliable enough for public exhibition...these are consumer formats that are likely to occasionally fail and dump you back at a menu screen. This might be OK once in a while for home use, but it is completely unacceptable for cinema use. 2) These are the same formats that people can buy for home use. If you went to a theatre and paid, say, $7.50 for a ticket, and then saw the movie playback fail mid-show an display a "Blu-Ray" logo, would you go back to the same theatre again? Most people probably would not, especially when they could go out and buy the same Blu-Ray for about the same price as two tickets. You need to offer people something different and special. If you do go this route, the booking terms would typically be the same as for late-run and repertory film and DCP (though with much lower shipping charges): $250-500 vs. 35%.

Note that, with repertory titles, some movies are taken out of circulation from time to time, usually to support marketing of newer titles. For example, you cannot book the Lord of the Rings (2001-2003) films in any format right now due to the impending release of the Hobbit. Similarly, the older James Bond titles usually get pulled when a new one is released. Some (Porgy and Bess is a good example) are in perpetual rights limbo, and are just plain not available. This may or may not be a concern for you. If you wanted to do a serious repertory program, you would need 35mm, and it sounds as if you are not interested in doing that.

Good luck with your venture. Let us know how it works out.
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post #16 of 23 Old 11-07-2012, 08:01 PM - Thread Starter
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That's good to hear. Keep in mind that, as with most public venue events, the admission price isn't the main business focus. Ours will be concessions, albeit significantly higher end. Being that this theater will be at an international ski resort, the demographic of customers will easily be able to A) afford the higher prices and B) also be looking for something exclusive and high end. The resort as it is is very nice, but hasn't developed a very large commercial setting for night life. There are four or five restaurants but, for the roughly ten thousand people staying on the mountain throughout the season (daily), the current selection of things to do at night is incredibly dull.

The market is definitely there. However, it hinges heavily on the content we offer. We've considered other business options as well such as indoor golf simulators and even a small bowling alley. The trouble we're having is finding a business that will be profitable in a somewhat small space. Most of these venues, including a theater, don't really become profitable until you have 3 or 4+ installed, be it golf simulators, theaters, bowling alleys (need about 15+ lanes to be profitable).

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post #17 of 23 Old 11-08-2012, 12:34 PM
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these are consumer formats that are likely to occasionally fail and dump you back at a menu screen. This might be OK once in a while for home use, but it is completely unacceptable for cinema use. 2) These are the same formats that people can buy for home use. If you went to a theatre and paid, say, $7.50 for a ticket, and then saw the movie playback fail mid-show an display a "Blu-Ray" logo, would you go back to the same theatre again
One can probably overcome that using a computer
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post #18 of 23 Old 11-09-2012, 10:11 AM - Thread Starter
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One can probably overcome that using a computer

I would definitely be using a computer to control the setup, not a Blu Ray player. I'd likely just rip the titles and find a way to show them without looking too much like a home setup.

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post #19 of 23 Old 11-14-2012, 02:35 PM
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I just wanted to say I found this thread very informative as to what it takes to be a first run movie theater
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post #20 of 23 Old 12-08-2012, 09:25 PM
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post #21 of 23 Old 12-12-2012, 02:56 PM
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Seating capacity itself isn't going to be the deal breaker, but 40 is probably too low for any major studios to bother with shipping out a hard drive because their assumption is that this will be a very low grossing theater. Also, if you happen to be within 3 miles of an already established theater you will probably be cleared and unable to get new product.
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post #22 of 23 Old 12-12-2012, 03:51 PM
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As you are probably not able to set this up before the next winter season. I would wait to see what RED are cooking with the RedRay player and what material ODEMAX will offer with their distribution model. The ODEMAX distribution details will be formally announced during Sundance in January. RED will have two Laser 4K projectors sometime next year. RedRay projector for HT and Crimson for larger venues. (the projectors will have RedRay player integrated)
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post #23 of 23 Old 01-02-2013, 02:54 AM
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Quote:
Originally Posted by bippy View Post

You could potentially license titles on Blu-Ray or DVD, but I strongly discourage it for two reasons: 1) I don't trust the formats as being reliable enough for public exhibition...these are consumer formats that are likely to occasionally fail and dump you back at a menu screen. This might be OK once in a while for home use, but it is completely unacceptable for cinema use. 2) These are the same formats that people can buy for home use. If you went to a theatre and paid, say, $7.50 for a ticket, and then saw the movie playback fail mid-show an display a "Blu-Ray" logo, would you go back to the same theatre again? Most people probably would not, especially when they could go out and buy the same Blu-Ray for about the same price as two tickets.

Note this is almost exactly what Landmark Theaters have been doing for years now.

The major studios have discouraged the use of 35mm prints and some studios (namely, Warner Brothers) have completely stopped distributing prints of catalog product altogether, and quite often will ship a Blu-ray unless the theater explicitly asks for and pays extra for a DCP copy, if available.

In fact, for some films not available on Blu-ray, WB will actually ship theatres an SD DVD. I wish I was kidding.

I've been in a Landmark Theater in Denver and have seen them insert what looked like a commercial Blu-ray they had received from WB into a Sony Blu-ray player to start the show.

Yes, at that point I got my ticket money back but they had already received their profit (concession sales) from me, and the other 80 or so people in the theater didn't even notice. eek.gif
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