Marginal Revolution has a very interesting point about the economics of the film industry that I hadn’t ever considered:
One interesting thing that I’ve always found about the film business from an economic point of view is that unlike in any other business I can think of, the cost of manufacturing the product has no affect on the purchase cost to the consumer. For example Honda can make a cheaper car with less features and cheaper finishes than BMW without losing all of their customers to the superior car because they sell their product for less. You spend less to make something, you charge less for it. Makes complete and obvious sense. Not so in the film business.
The comments are quite interesting as well as people puzzle over just how poorly theaters operate: They are constantly empty, all seats and movies cost the same no matter how popular they are and just how cheap the most profitable films in history were to make (thus why they’re so profitable).