Film-Tech Forum ARCHIVE: How to determine how many screens to build?

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Posted by Brad Allen (Member # 470) on 12-10-2003, 01:39 PM:

Anyone know of guidelines that would help to determine how many screens a given population count would support?

I have 3 now, and really feel I need more, but how many?
Thanks!

Posted by Jack Ondracek (Member # 1466) on 12-10-2003, 01:50 PM:

That IS a good one, Brad.
I have 3 screens at my drive-in. That's plenty, except for parts of July and August (which just happen to be my busy months) when 6 would be about right.

Seems it's the same with my indoor. I have 4 there, and that's usually enough, given that I'm in an area with Regal and AMC. There are occasions when 5 would be better, since it's not often I can stack titles. On the other hand, there are times when the shows just tap out fast and 2 would be just fine.

Off the top of my head, I guess one way I'd look at it would be to evaluate how many times I'm sending out films that are still bringing in enough money that I'd have held them over, were it not for a new show coming in that I "had" to have. Those are the shows that would have been in the lower percentage weeks that might have made a few dollars I could have kept, while paying those higher first & second week dollars to the studios. Whatever that threshold is for you, if you're shipping out films while they're still above that figure, you probably still have an audience. Without more screens, you're actually training them to rush to your place during those high-cost weeks... because they might find the show is gone if they don't get there fast.

On the other hand, if you fairly consistently find yourself holding pictures over that have tapped out, but you're just keeping them there to light the screen, you probably have enough screens... if not too many.

Posted by Jeff Taylor (Member # 443) on 12-10-2003, 03:14 PM:

For "hard tops" there is the obvious issue of enough flexibility to play off titles with some legs left in smaller houses, but to me the issue has always been to preclude competition in your area. You want as many screens as you can justify assuming you can obtain product from all the majors and effectively preclude anyone from competing in your area once you control all the top grossers.

Posted by Kevin Wale (Member # 1851) on 12-10-2003, 03:36 PM:

The addage that more is better seems to have applied to the industry over the past 15 years or so. Now, there is a decided trend in downsizing. Kurt Hall mentioned once that UA would no longer build 20 plexes.

In the real world, I've really experienced the crunch of not enough screens. In a town of 10,000 we had 5 screens. It was expanded to 8. It has caused numbers to increase and would have caused it much more had the three new screens been designed right. Basically what they are doing now is allowing the 5 original screens to keep things moving and allowing titles to take advantage of the late run splits.

In a town of 20,000 + we had three screens and it is crazy. So often you can't get the titles you want because you have to keep the titles that are doing well. There is no competition in either town.

Where I work now we have two screens and it's terrible.

Another key is the competition factor of course. If there is a mega down the street, a smaller number might be the best way and to just beat them in quality. Similar to The Senator in Baltimore's approach(although he is expanding.)

6-8 screens seems like the best number because it allows half of your theatre to be treated as though they are the only screens and the other half to be running splits most of the time.

The size of town I am beginning to feel doesn't matter after a certain number. Big cities would obviously allow for more because of the population, but there are more theatres to deal with and suburb after suburb after suburb.

If I had a tripple, I would do some seriuos projections on paper comparing 6 with 8 screens with a guestimate of 6 being the best way to start and allowing future expansion should it be real successful.

The best way I think would be to find out exactly how many seats you would have to fill to break even given all costs involved. Then determine how much you can realistically expect above the break even point. If that point seems unrealistic, deduct a screen until you have realistic numbers.

Consider also of course labour costs, and maybe even more importanly, can people realistically expect to be able to reach your theatre. Will the parking be so crazy that they just won't walk the length of an aircraft carrier to get to the front door and then have to walk half a block to get to the screen showing the movie they want to see?

If memory serves, you can count cars and multiply by 2.5 and be very close to how many tickets you have sold. How many cars would be added if you had good business in your new screens? (reverse the process)

Posted by Mark Gulbrandsen (Member # 72) on 12-10-2003, 03:42 PM:

I had previous customers that built in small podunk towns and they had gotten formulas from NATO for calculating all the projections and stuff. They still underbuilt their first location in a town of 3500 though and ended up adding two more screens to the 4 plex they first built...turned out the county had over 100K living there and driving 50 miles to go see a movie was no more equivelent than going shopping weekly!! You can also get from the Census bureau all the data on how many people of what age live within certain radius's of your location right now. That data is a huge help in deciding what to build but also in what to book at that location. Aren't Carmike and National Disamusement both also located in Evansville? Seems like they weer last time I was there....

I don't totally agree with the next reply below..... Its still nice to hang onto a film or two that are doing well when the rental rate declines to 60 to 70 percent(or less) and let it play out in a small house. A good way to make higher profits. Your survival even more greatly depends on what other competition is around or near you. Know your customers, know what they like to watch. And above all be far far better at your operation than your competition is.
Mark @ CLACO

Posted by Robert E. Allen (Member # 1351) on 12-10-2003, 03:43 PM:

I believe what you play on the screens you have is much more important than adding screens. A triple screener should be able to survive in any location. But it depends solely on your booking and promotion.

Posted by Kevin Wale (Member # 1851) on 12-10-2003, 04:18 PM:

I'm with Mark. Underbuilding is the more likely scenario. I think the expansion was actually an overbuild but only because they weren't built right(people often mention they don't want to see a movie in those houses).

I agree that a tripple should be able to profit anywhere. However, we as exhibitors are at the mercy of the product given to us. The majority of the product is bad and the good product tends to be under promoted by the studios. So at a tripple when you are stuck with a two week contract and it's dead after the first day and the new movie that you would like to book is just going through the roof... how do you know which one to book in the first place? It's almost impossible to tell anymore. I never dreamed that Star Trek Nemesis would flop as bad as it did with the tracking numbers it had. I knew it wouldn't be a Spider Man but sheesh... a total flop? It was a good Star Trek flick too. Certainly better than Insurection which doubled it's earnings.

The tripple I worked at was profiting. However, there is no room for error at all and it's earnings according to theoreticals I have run would be astronomical.

Posted by Charles Everett (Member # 889) on 12-11-2003, 05:23 PM:

You also have to be on good speaking terms with the studios 52 weeks a year. Regal (pre-Anschutz) learned that the hard way when it didn't open Rush Hour 2.

Mark G: Carmike and National Amusements aren't in Evansville. Local chain Showplace Cinemas dominates Evansville and Kerasotes has a megaplex there as well.

Posted by Daniel Wright (Member # 1983) on 12-11-2003, 06:04 PM:

The movie theatre in Guymon, Oklahoma is a good example. They opened with five screens and opened three more this year. They also have the market cornered I think the closest competitor is in Liberal Ks some 70 miles away. The Northridge 8 is also the single cleanest movie theatre I have ever been in, you could eat off their bathroom floors.

Posted by Kevin Wale (Member # 1851) on 12-11-2003, 06:31 PM:

quote:
The movie theatre in Guymon, Oklahoma is a good example. They opened with five screens and opened three more this year. They also have the market cornered I think the closest competitor is in Liberal Ks some 70 miles away. The Northridge 8 is also the single cleanest movie theatre I have ever been in, you could eat off their bathroom floors.

Liberal is actually 40 miles from Guymon but it has some aging issues and has struggled to keep up. The owner of the theatre in Liberal is a really neat guy, he just sufferes from some perception issues(his theatre that is, not him).

Yes, we prided ourselves in our bathrooms and overall cleanliness. For where it is, it's amazing that it exists.

The three screens other than the ones in Guymon are in Woodward OK. It's a much older facility and needs quite a bit of work. The front theatre is DTS and is still quite nice for it's age. The back two which are at least a decade newer are in pretty bad shape all around. They are now DTS after some work done earlier this year(I hate running speaker cable behind old burlap curtains by the way! LOL)

Guymon has had an advantage of no competition however and thier methods may not work in some of the more saturated areas. Well, it would work but it would be quite a bit more costly as you would have to beat the other theatres in some other way than just being clean, and having digital sound which is a landslide in rural areas like the OK panhandle.

I miss working there a bunch. THere is just more long term oportunity for me here although the theatre I work at now is far from enjoyable at this point.

Ron and Jeanette Funderburg have certainly built something to be proud of I will say that. It could be better, but they know that and take steps every year to improve.

And if Seth(the head projectionist there) is reading this... EMAIL ME DUDE!!!!!!!!!! [Smile]

Posted by Joshua Lott (Member # 240) on 12-12-2003, 10:38 AM:

Mark Said:

quote:
I had previous customers that built in small podunk towns and they had gotten formulas from NATO for calculating all the projections and stuff.

I have contacted NATO and they won't work with me becuase I do not "own" a theatre yet. Is there someone at NATO to contact or someone else to get those formulas from? I am writing a business plan currently.

Thanks,

Posted by Ken Layton (Member # 133) on 12-12-2003, 11:13 AM:

The old rule-of-thumb was that for every 10,000 in population can support one theater screen.

Posted by John McConnel (Member # 2000) on 12-12-2003, 01:23 PM:

Kevin, where do you work now?

P. S. I agree the Funderburgs are excellent operators.

Posted by Kevin Wale (Member # 1851) on 12-12-2003, 11:47 PM:

I work at the Tally Ho Theatre in Leesburg Va now.

Posted by Jack Ondracek (Member # 1466) on 12-15-2003, 02:17 PM:

quote:
You also have to be on good speaking terms with the studios 52 weeks a year. Regal (pre-Anschutz) learned that the hard way when it didn't open Rush Hour 2.

It has been fairly quiet recently... but it seems someone gets into a pissing match with a studio every year or so.

Before Regal got into it, their predecessor (Tom Moyer or Act III) got on the wrong side of Paramount. The only independent in one of our towns (a small sub-run single, surrounded by pawn shops, porno establishments & little parking) got Crocodile Dundee and the Star Trek picture that released around that time. It was the only theatre in the area to run those shows & the place was PACKED... for a few weeks. The owner of the place just about did handsprings, trying to find an "out of area" exhibitor to purchase his "first run" theatre!

Posted by Dennis Benjamin (Member # 1137) on 12-17-2003, 09:52 PM:

Old school 'rule of thumb':

If the town can support a Wal-Mart, it can support a six-screen theatre.

Posted by Brad Allen (Member # 470) on 12-26-2003, 01:27 PM:

Thanks all for the replies. Lots to think about.
Info appreciated.

Posted by Kevin Wale (Member # 1851) on 12-26-2003, 02:33 PM:

I hope things work out for you Brad.

Posted by Mark Gulbrandsen (Member # 72) on 12-26-2003, 07:13 PM:

"I have contacted NATO and they won't work with me becuase I do not "own" a theatre yet. Is there someone at NATO to contact or someone else to get those formulas from? I am writing a business plan currently."
_________________________________________________________________

I was told about their services by other theatre owners over the years. Perhaps you have a friend that owns a theatre someplace and can help you. The other possibility of obtaining this info is through a film booker.
Mark

Posted by Joshua Lott (Member # 240) on 12-27-2003, 01:27 AM:

Mark,

I don't know anyone else personally that is involved with NATO. That is why I asked here.