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This topic comprises 7 pages: 1 2 3 4 5 6 7
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Author
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Topic: Small theaters struggle as Hollywood goes digital
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 09-11-2012 11:42 AM
quote: Mike Blakesley
However I don't think there is contempt of small theatres in general, just those operators who from the beginning have refused to plan for the digital conversion even after being told repeatedly that it was really going to happen.
There may be some theater operators out there who simply refused to see the proverbial writing on the wall and refused to plan for a mandatory digital cinema conversion even though they had the ability to do so. I'll agree that one is on them for not planning ahead.
However quite a few small town theaters have simply not been generating enough cash flow to finance a digital cinema conversion.
All of us know full well there is a LOT more that costs money hand over fist in operating a movie theater than simply buying some new electronics gear for the booth rack. The Vaska Theater here in Lawton is a really old building. Old buildings have lots of maintenance issues. Add to that the wear and tear customers will do to the seats, the screen, bathrooms and anything else in the theater they can touch. All of that other crap bleeding away positive cash flow takes away the ability to do all sorts of much desired upgrades.
The guy who runs the Vaska has been wanting to install a digital surround sound system for more than a decade, but has never been in a good enough position to do it. A full d-cinema conversion is a far more expensive thing to install. That's why I'm very pessimistic about the future of that theater. Someone with deep pockets would have to take a major leap of faith and completely overhaul that theater and possibly make changes to its bargain/2nd run business model in order for the theater to survive (assuming the movie-going public in Lawton will visit the place enough to make the effort profitable). I don't see that happening.
Any theater lives and dies by the quality and quantity of its customer traffic. You need enough customers buying tickets and enough high quality customers who will pay for things from the snack bar and not tear up the damned theater.
One huge fact of small towns: most have aging populations with few young people and more in the way of retired people. Most movie-goers are in the younger demographic. Most movies are made for and marketed to younger crowds. Few movies are made to appeal to the middle aged and older demographic that makes up a big part of small town populations. It's anecdotal at least to say I personally know some middle aged and older people who seem to brag they've not been to the movie theater in many years. I never hear those kinds of comments from people in their 20's or 30's.
There is also a larger issue of many small town governments having serious financial situations, which can place more tax pressure on local businesses. A growing number of small towns here in my region of Oklahoma no longer have any police departments, putting even more pressure on county sheriffs and the highway patrol.
Small town theaters have unique pressures on them that big multiplex sites in big cities just don't experience in nearly the same way.
quote: Edward Havens
In a few hours, the Parma Theatre in Parma OH is closing its doors for good. In articles about the impending closing, the owner says he's been looking to sell for the past seven years but he never once says it had anything to do with not being able to afford to convert to digital.
Two possibilities: 1: the owner no longer has any love of that business. 2: the business wasn't making enough money to be worth the trouble.
quote: Edward Havens
But the question is, why was Mike able to get a bank loan in the middle of a strong recession in order to upgrade his equipment?
Because you can't compare apples to oranges. One theater's financial/market situation and relationship with a bank/lender is not the same as that of another theater.
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 09-11-2012 01:16 PM
Yeah, the arguably short "window" between theatrical release and home video release makes it pretty easy for lots of people to merely wait for the Blu-ray, DVD, VOD, PPV, Netflix, etc. They watch from the comfort of their home, pay less to pop their own popcorn and pause the movie when they need to pee. I'm certain it has had a big effect on the Vaska's business. By the time the Vaska is playing some movies the video release may be just a month or even less than a couple weeks out from arriving on store shelves.
The other problem with the Vaska's bargain/2nd run model: it attracts more low income customers who arguably are less likely to buy a bunch of things from the snack bar. I'm pretty sure a bargain priced theater is going to be even more dependent on concessions sales than a 1st run theater.
The Vaska might be able to do better as some kind of first run theater, but that kind of change would require some big upgrades in addition to the change to digital projection. The two first run theaters in Lawton have at least some kind of stadium seating in every auditorium. The 12-plex at Central Mall just converted the rest of its screens to digital projection. 5.1 surround would be a requirement. More than that, the decor in the Vaska would have to be updated. New carpet, new seats, probably a new HVAC system, etc. etc. It would probably be just as easy to close the theater for a period of time, gut the insides and build something completely new inside that space.
Unfortunately Lawton is not a very big market and doesn't have the greatest income demographics. The Vaska is also a single screen theater. Potential lenders might see that as a negative. I wonder if the studios do as well.
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Edward Havens
Jedi Master Film Handler
Posts: 614
From: Los Angeles, CA
Registered: Mar 2008
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posted 09-13-2012 01:12 PM
quote: Bobby Henderson
The other problem with the Vaska's bargain/2nd run model: it attracts more low income customers who arguably are less likely to buy a bunch of things from the snack bar. I'm pretty sure a bargain priced theater is going to be even more dependent on concessions sales than a 1st run theater.
The first theatre I was a GM at was a four screen dollar house in San Jose CA, in the late 1980s/early 1990s. Now, maybe it was the location, even though San Jose has regularly had a higher rate of people living under the poverty line than the national level, but within six months of arriving, I got the CPC at my location up about fifty cents from where it was in years past, and about a dollar higher than the company's national average. I believe in part it was because I would listen to what my customers were asking for that I wasn't carrying, and replacing low-selling items for those requested items. As much as I loved Sweetarts, they just didn't sell there, so I dumped them in place of Milk Duds, which I don't like myself and never really sold at the locations I was an assistant at, but became my second best selling candy item soon after I introduced them.
Does the owner of the Vaska engage his customers at all? Does he ask them what things he can do better? I can speak only for myself, but I know that when I do my welcoming announcements, I finish with telling the audience that this is their theatre, and if they have any comments, good or bad, to please find me or any manager after the show or the next time they are here and let us know what we can do to make their visits better. We've gotten a wealth of great feedback, not always positive, and we've made adjustments based on that feedback, and worked to get certain products previously unavailable to us made available to us. And maybe it's merely coincidental, but both our paid attendance and CPCs are up 15% this year over the past three years.
For me, even if one has a great working model, I'm still certain it can be made better. But if one does not have a great working model, one must find other ways of making it work better.
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Scott Jentsch
Phenomenal Film Handler
Posts: 1061
From: New Berlin, WI, USA
Registered: Apr 2003
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posted 09-19-2012 01:45 PM
Except for the projection/sound equipment, I think a lot could be done in 3 days of hard work and a $10,000 budget. Is that realistic?
- Refine ticket selling/pricing structures
- Refine concession stand offerings/prices
- Separate the chaff from the wheat on the staff
- Upgrades to the concession stand to make it more inviting if necessary
- Fix problems in bathrooms (there is a connection between the condition of restrooms and food sales)
- Replace/upgrade broken and tired seats
I kinda doubt that $10k would be enough for some theaters that haven't been cared for since Back to the Future was released, especially for multi-screen theaters that might need a lot of rehab in the auditoriums...
quote: Edward Havens
I can speak only for myself, but I know that when I do my welcoming announcements, I finish with telling the audience that this is their theatre, and if they have any comments, good or bad, to please find me or any manager after the show or the next time they are here and let us know what we can do to make their visits better. We've gotten a wealth of great feedback, not always positive, and we've made adjustments based on that feedback...
That sounds like a great way to engage your audience and make them feel like they're part of your operation. I applaud your approach, and it would be the way I would want to run a theater!
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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 09-19-2012 03:28 PM
quote: Scott Jentsch
Except for the projection/sound equipment, I think a lot could be done in 3 days of hard work and a $10,000 budget.
Agreed, and I think that there is something to be said for having a set of fresh eyes to look at any operation and suggest improvements, without being constrained by preconceived notions about how things "should" be.
I am a big fan of having theatre managers personally introduce screenings. Even if it goes no further than "Thanks for coming, please turn off cell phones, we will be showing some trailers for some upcoming moves that might interest you, and enjoy the film," this sort of personal connection is important for customers, and helps to distinguish the cinema experience from the home experience. Similarly, as a patron, I respect theatre managers who make themselves visible as patrons are leaving after a screening. This provides a perfect opportunity for customers to make comments about the presentation or suggestions about how the theatre can be improved. Having an usher or other employee do this is fairly useles...the manager himself needs to be visible (in a suit or other respectable manager-like clothing).
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