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This topic comprises 4 pages: 1 2 3 4
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Author
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Topic: How do you buy a movie theater and get into business on your own?
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Mike Blakesley
Film God
Posts: 12767
From: Forsyth, Montana
Registered: Jun 99
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posted 11-18-2010 11:00 PM
Well Robert, you just always seem to think that all movies today are based on violence, sex, foul language and the like and it's just not true. Just pick any year and look at the top-ten list for that year and you'll see what I mean. I hate it when people paint today's entertainment "scene" with such a broad brush.
Just picking a year at random, here's our top ten list (in terms of tickets sold) for 2008. There's not an R-rated movie in the bunch. There's not a sex scene to be had in any of these that I know of. And foul language is pretty nonexistent in them too. There are a couple with violent scenes, but certainly not gory ones.
Marley and Me
Alvin and the Chipmunks
Indiana Jones and the Kingdom of the Crystal Skull
Wall-E
Dark Knight, The
Horton Hears a Who!
Chronicles of Narnia, The: Prince Caspian
Madagascar Escape 2 Africa
Bolt
Iron Man
Aside from the fact that there are a lot of wholesome movies around today, movie values in general tend to reflect society. Is there more foul language in movies today? Absolutely, but there is more foul language in middle schools, too. Is there more depiction of "unwed people living together" in movies today? Definitely, but consider that in today's paper there was a story that almost half of the U.S. population views marriage as "going out of style."
By the way I've been in the business for 34 years, with 31 of them as an owner/operator so I'm not exactly a spring chicken either.
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Mike Frese
Master Film Handler
Posts: 465
From: Holts Summit, MO
Registered: Jun 2007
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posted 11-19-2010 01:58 AM
Okay here we go.
That mall theater that has been closed for at least 3 years.....stay away from it as I am sure many people have already done their due diligence and passed on it.
If I was to own my a theater today it would be either of these circumstances; 1) I could open up at least a 6-screen and have a market to myself (at least 15,000 people-but do not expect to get rich here) or 2) Be in a older theater with potential in a market where the closest megaplex is more than 30 miles away. (Both scenarios assume you are the owner-operator).
Mike, I believe you are pretty insulated in Forsyth from a megaplex right? But Mike does not take advantage of his customer. He has spent money well before most would have.
Scenario 1 would take much money.
Robert:
This has been on my mind for years what you say about hollywood pushed movies on both db's. To say that there is money that can be made by other movies: independent, bollywood, faith-based, classics, etc. is just wrong. When you say that, you are saying that 1000's of theater owners are making horrible decisions about what we play. Only a select few theaters could make some money on these movies. Maybe 1 theater in a market of 100,000 or more with some demographics in their favor.
KC has a 28 screen chain theater and they have played everything that is out there. Over 220 movies the last year alone. Representing movies from all over the place. Less than 5 would be movies you talk about in their top 100. This theater can run basically anything they want (unless of course movies are only in very limited runs like NY/LA only).
According to Rentrak (in the KC area) based on who allows their numbers to be seen, Toy Story 3 played in over 100 theaters while three top independent movies: Winter's Bone, Get Low, & Girl Who played with Fire played in 13-16 theaters with the first two in mine. They rank in the bottom 15%. Those two also attracted heavier than usual senior citizens which means 1) concession sales were weak, and 2) decent amount of complaints about why their was not a senior citizen rate (we charged $5 for all seats on these shows).
I will continue to play these movies in the hope that I might attract more people, but I will take the hollywood pushed movie on the break anyday. Unfortunately I am only seasonal first run and move-over does horrible for me as I have a 8-plex 12 minutes away from me.
I have also owned video stores for 20 years and it is just as difficult to get people to take these same movies.
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Scott Norwood
Film God
Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99
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posted 11-19-2010 12:28 PM
I am not a theatre owner, nor have I ever been. I wouldn't mind being one someday, but I've seen someone do this very wrong and the right set of circumstances would have to exist before I would even consider doing it myself or recommending cinema ownership to anyone.
The ownership-done-wrong situation was at the first theatre where I worked (about twelve years ago, when I was in college). This is all old information and none of it was proprietary, anyway. The theatre was open and operating as a single-screen art-house venue when the nonprofit foundation (whose primary purpose was something else entirely) that had been running it decided to get out of the cinema business. They put it up for lease for 10% of whatever the business grossed. In return, they took care of basic building maintenance issues (not including interior fixtures, seats, projection, screen, and sound, but including HVAC and structural issues). This could potentially have been a reasonable opportunity, given that the place was already operating and was in a high-traffic retail/tourist/college area.
At the time of the change of management, it was losing something like $30k per year (secondhand information), and probably could have been made to at least break even with better management and possible off-hours rentals.
The couple who leased it (and for whom I worked) had intended to run it as a movie theatre and also use the building two nights per week to put on magic shows (they were professional magicians). Unfortunately, they were not experienced with either the film industry or how to run a business.
I could probably write a book on the mistakes that these people (who were actually very nice and well-meaning and always treated me and the other employees fairly), but here are the major ones:
- they were seriously under-capitalized (they started with something like $15-20k), and had to make some major expenses at the outset to re-configure the screen/stage and to produce and distribute advertising materials for the magic shows
- they chose to do their magic shows on Friday/Saturday nights, which precluded booking many films, and threw away their biggest-grossing evenings
- they did not know the market, did not particularly care for art-house programming, and hired a film booker with similar limitations
- they experimented with first-run films for a short period, but found that the result was that they ended up doing more work to service more customers, but netted less than they would have if they had stuck to late-run art-house titles (which have a much longer shelf life)
- they got into trouble with some film distributors for late payment, thus causing problems for the booker
- they hired the owners kid brother to be a projectionist; unfortunately, he did not know or care about doing the job properly, and they gained a reputation for offering poor presentation (the previous management was not great in this department, either, but they were on the right side of acceptable)
- their magic show (which was actually pretty decent) was marginally successful (it probably did better than break-even), but did not cover the losses suffered due to inattention of the film programming
- they regularly distributed film schedules a week late, thus making it hard for people to know what was playing (this was before it became common for people to look up film showtimes online)
- they cheaped out on important maintenance and presentation issues, did not ever have a projection or sound service call, and let many things fall into a state of disrepair, alienating what few customers they still had
- they did not take advantage of the location for off-hours rentals or special events
Note that many of the above issues would have been somewhat mitigated if they had gone into this operation with substantially more reserve capital, with the idea that they would be building an audience over the long term. They should have hired the previous booker and taken care of physical and presentation-related maintenance issues before opening. They should have known and cared about what they were showing.
Eventually, they somehow managed to get out of the lease without declaring bankruptcy (I'll never understand how, but that was after I had graduated and left the area).
For me, this was an educational experience, but I wouldn't wish it on anyone. Do _not_ go into this without substantial capital and a full understanding of the risks involved. Research your market thoroughly, and try to find an under-served area with a growing population. Don't jump on the first theatre that you see for sale, and consider other areas and other types of theatres (indoor, drive-in, live/stage, first-run, dollar house, art house, etc.).
Get management and booking experience at as many theatres as possible (preferably in different markets and with different types of programming) and make mistakes on someone else's dime. Alternatively, if you don't want to do this yourself, find a great manager and a great booker and hire them. Get a great projectionist and a great service technician. Hire great staff, train them well, and make sure that customer service is your top priority. Make sure that the building is immaculate when you open, and make sure that your film presentation is perfect. Keep both that way. Don't be cheap. If you will be doing multiple types of programming (concerts, etc.), hire people who have experience with same. If you take over an existing location, find out what went wrong there and fix those problems. Listen to your customers and consider what they say.
This is not a good business if you want to get rich, but I have known several independent operators who enjoy their work and are able to support their families with it, while improving their theatres
If I were going to buy or open a theatre, I'd want to make sure that I had at least a year's worth of expenses in the bank. Then, I would make a point of visiting some successful independent theatres. Mike's theatre would definitely be on the list. Jack Ondracek and Barry Floyd each have successful drive-ins that I would want to see as well. I would then try to find an existing, structurally sound building or drive-in in an under-served market or growing market.
Features that I would look for in a potential indoor location:
- easy accessibility to major roads and/or public transportation
- convenient parking
- non-cinema revenue opportunities (retal rental spaces, potential for daytime rentals to nearby schools or businesses, etc.)
- stage facilities or other features that would make various types of non-cinema programming possible
- compliance with fire and handicapped codes
- state of HVAC system
- condition of seats (you don't want to know the cost of re-seating an auditorium; that can potentially require re-grading the floor!)
- space for expansion to add additional screens or other facilities
- population demographics and trends
- location of other nearby theatres and the effect that this may have on film availability (check with a booker)
- size of screen(s) and potential for increasing screen size
- any architectural issues that may affect picture and sound quality
- size of lobby and ability to run an efficient ticketing and concession operation
- any fire/safety code or historic-preservation issues that may affect the ability to improve the building
- state of electrical service to building
- state of any existing stage rigging (can be a major safety issue)
- local laws that may regulate midnight shows, etc.
- possibility of serving alcohol and/or hot food to patrons
- any other features of the building that are special or unique (organ, etc.)
I wouldn't be too concerned about existing concession or projection equipment. This is all fixable at relatively low cost, especially compared with, say, a leaky roof or a malfunctioning HVAC system.
Personally, I'd stay away from a long-closed mall theatre. Older ones are typically pretty dumpy, with small screens, and the better locations are typically already operated by major chains.
Disclaimer: I have never owned a theatre. You probably should seek out the advice of those who have done so.
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Martin McCaffery
Film God
Posts: 2481
From: Montgomery, AL
Registered: Jun 99
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posted 11-20-2010 11:36 AM
quote: Mitchell Dvoskin
No, they are serving their community responsibility by providing programming that the majority of their community wants to see. If that were not so, people would stop attending.
I don't disagree with your bigger point, but unless it is a really, really small town, the majority of the community don't go to any given movie, obviously. I think the average movie goer goes 2 or 3 times a year (it's been awhile since I've seen any stats). The prime demo for movies, the ones at whom most movies are directed are the 13-25 group, do go to the movies much more often.
So what you need are enough people to make money, not the majority of the community.
Of course, if the majority of the community hates you, you're doing something wrong;>
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