I may be completely off on this, but the way that I understand it to work is the film companies sell the movie to theatres, and the theatres make their money by selling tickets. I don't think film companies get a share of the ticket price. The movie companies in this case perhaps figured it's more profitable to sell to the streaming sites under different terms.
I will research it some more.
If anyone has additional insight or a better understanding of this process, please elaborate.
**PROCESS**
It has long been stated that movie theaters only keep 10% of the box office sales. It’s not that bad, and it’s not that simple. In practice, it really depends on the specifics of the negotiated contract. The distributor/studio makes separate deals with the various theatres. The terms are generally undisclosed. My personal observation is limited and possibly outdated by now but, as I saw it, theaters actually get to keep more than 10%.
For starters, there’s a “house allowance,” which the theater keeps to cover the “overhead” expenses associated with showing movies (e.g. electricity and staffing). I’ve seen this figure calculated based on the number of seats in whatever specific auditorium the movie is playing in. The value of each seat is a negotiated value. The point is to minimize the extent to which the theatre is financially exposed. The house allowance ensures that if nobody comes to see the movie, the theatre won’t lose the money spent on lights, air-conditioning, etc. They’ll make ends meet.
The house allowance is subtracted from the actual ticket sales, and the remaining money is divided or “split” between the distributor and theatre in an agreed-upon fashion.
For a typical release, the split might be 90/10 for the first x weekend(s) during which time the studio gets 90% and the theatre keeps 10%. The ratio gradually becomes more favorable to the cinema over time. [Unfortunately, movies don’t stay in theaters as long as they once did. The original Star Wars, for example, stayed in theaters for over a year. So, unless this “sliding scale” arrangement has been updated, it means the studio gets the lion’s share of today’s box office.]
In order to compete for the right to play a highly-anticipated blockbuster, the cinema might need to “guarantee” a certain dollar amount to the studio. Let’s imagine there are two theaters in close proximity—that is, they are in the same “catchment area”—and each of them wants to play the next big superhero movie. Theatre #1 might guarantee the studio $50,000, whereas Theatre #2 might make a $60,000 bid. In that case, Theatre #2 wins the movie. In this example, the “split” will remain in the studio’s favor until the studio has been paid the $60,000 that was promised. [Exception: If the movie fails to attract audiences, Theatre #2 might opt to simply pay off the guarantee and cut their losses, as dropping a bad movie gives them the freedom to utilize that screen to play a movie that’s performing better. Alternatively, the studio could counter with more favorable terms in an effort to keep the movie playing.]
So, with studios getting preferential treatment at the box office, how does the cinema make a profit?
Concessions.
Cinemas are essentially in the snack-food industry. The movie is simply the attraction. (Hence the term “Coming Attractions.”) A good movie brings people out to the theatre. A considerable portion of those folks will buy snacks. The snacks—especially popcorn and fountain beverages—are marked-up by a large enough margin to ensure profitability, taking into account not only the cost of the food items, but also the high cost of operating the entire cinema facility