Film-Tech Forum ARCHIVE: How to go about starting a Movie theater

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Posted by Eric Webb (Member # 2772) on 01-02-2005, 06:51 PM:

I am looking for information on starting a 8 screen movie theater

*How much would it cost to build one or buy a theater already built
*Which one is better
*Where to buy the supplies from (i.e. the projection equipment ,concession supplies and equipment,....
*How to book the films you would like to show
*How much are the bills at the theater going to be and taxes

Posted by Bobby Henderson (Member # 840) on 01-02-2005, 07:19 PM:

The cost? That's going to vary quite widely.

To build an 8-screen complex brand new you're looking at a base cost of $3 to $5 million. I base that figure on Carmike spending around $2.5 million for the 8-plex they built here in 1994. As I said, the $3 to $5 million figure is a low-end estimate, and it could run quite a bit higher depending on the theater's size and configuration. Major chains like Cinemark, AMC and others spend $20 million or more on sites with 16 to 30 screens.

You may be able to pay less for an existing theater -or you may not. An established theater with good customer traffic may fetch a higher asking price. Then there's the issue with possible upgrades you'll need to make to the site. Theaters have to do more to win customers these days. Stadium seating and digital sound are no longer luxury items for big destination cinemas. Many existing sites are unable to handle either of the two. The ceilings may be too low for a stadium seating retrofit and the walls may be too thin to contain the extra dynamic range of digital sound. Then you have to take into account the added factor of bringing a theater into compliance with current rules from ADA, OSHA, EPA and others. Most commercial businesses have to do this for any significant construction project to proceed.

So to answer the question "which is better" a new theater or an older one, it is often better to close down an old theater and build a brand new site. Very often this results in some really great movie theaters being closed in favor of smaller, less unique multiplex operations.

Companies like Universal Cinema Services, NCS Corporation and others can fully equip a movie theater. Some can even help in the actual movie theater design and construction process.

Taxes are going to vary state by state. So are rules in how workers comp is handled. You may not have to provide benefits like health insurance coverage to employees, but you'll have to carry worker's comp insurance and other types of insurance as well. Workers comp can be a very expensive thing.

I couldn't tell you much about the film booking part of the equation. I can tell you that if you were to build a movie theater, you need to be very very careful about where it is located. If the site is within 2 or 3 miles of a competing theater then the new theater would stand to lose a lot of movies to an allocation process. Distributors don't like "day and date" engagements where the same film is playing at two theaters within close proximity of each other. One could build near some big existing megaplex, but only if his new site would be playing different material (art films, etc.)

To get to a more important point --there more to consider with running a movie theater than just getting the start up capital from the bank. You can open a theater, but can you keep it open?

Personally, I would not try to open a movie theater unless I knew a hell of a lot about service industry management. I might be brave enough to try it if I had a lot of restaurant management experience or something else that was comparable. Of course, the best thing would be lots of previous experience working in and managing movie theaters. The exhibition industry is a very challenging business with profit margins that seem to continually shrink. You must manage employees well and give customers a good reason to come back to your theater.

Posted by Edward Jurich (Member # 1787) on 01-07-2005, 10:43 PM:

On the other hand, I've seen a single screen theater made in a store front using a dry-wall screen, speakers on each side of the screen [Big Grin]

Posted by Christian Volpi (Member # 2370) on 01-08-2005, 01:45 AM:

quote: Edward Jurich
dry-wall screen, speakers on each side of the screen

I think he wants an 8-plex, not a ghetto plex.

Posted by Dave Williams (Member # 299) on 01-08-2005, 05:58 PM:

The first thing you should do when you consider the attempt of opening and operating a movie theater...

is this...

and do so in this order...

Go to the observation deck of a very tall building,
Strip Naked,
Jam a baloon up your wazoo,
Blow it up with a bicycle pump,
Paint a red pentagram on your chest,
Run around like an insane satan worshipper chanting devil music while having a blown up baloon with a bicycle pump hanging out your wazoo,
Get the well needed four weeks of rest in the state hospital after you are detained and sedated,
THEN...

Get your head on straight and if you still want to operate a movie theater, Go back to step one and repeat..

In all reality, operating your own theater sounds like fun, and it can be, if you have the financial backing to run it for two years in the red, like any startup business.

Know you will work 8 million hours a week and love every minute of it.

In fact, prepare to move in for at least the first six months.

Make sure you do what your competitors do not. Study them and learn what they do and don't do that. If they do something very well, do something different very well. If they do it really bad, then do that but not as bad.

Its a crapshoot, but if you can make it work, and you love the medium, it can be very rewarding, but tiring at the same time. Make sure you have an equally responsible and insane partner who can do the same things you can do, so you can go on vacation and know that the place will not burn down while you are gone.

Ian and Ky can attest to that I think...

ciao mon

dave

Posted by Phil Hill (Member # 371) on 01-08-2005, 06:29 PM:

quote: Christian Volpi
I think he wants an 8-plex, not a ghetto plex.

Gosh Christian, sometimes you're such a brute! [beer]

Posted by Christian Volpi (Member # 2370) on 01-10-2005, 02:55 PM:

I'm just trying to catch up to you, Phil. [thumbsup]

Posted by Brad Allen (Member # 470) on 01-10-2005, 10:29 PM:

Vacation??????? Heck, there's no vacations...

Posted by Thomas Procyk (Member # 1170) on 01-11-2005, 10:58 AM:

Well, the first thing it depends on is location. If you're looking to reopen a closed theater (MUCH easier than building one) you should first find out the reason it closed. If it closed because of crime problems, or if it was infested, or something is wrong with the building (leaks, etc.) then STEER CLEAR!!

However, your best bet is to pick up one of the theaters dropped by the major chains when they all went bankrupt. An old GCC or UA might be a good start. Many chains worked out a deal with the landlord that they would be let out of their lease if they leave all the equipment/seats/fixtures in the building. This would be the ideal situation. Just walk in and turn on the lights. [Smile]

Then, once you've got your "theater in a box," comes the decision of first-run or sub-run. When you looked at the area, if you noticed there's a lot of newer, 12+ screen theaters in the area you wouldn't want to compete on a first-run basis in an old plex, unless you've REALLY got something that the big guys don't. (but things like stadium seats and digital sound will hold you back)

You can make a decent buck if you reopen an old theater as a sub-run in an area overscreened by megaplexes. As long as you keep it clean, hire a good staff (some people are wary of working at "dollar theaters") and most importantly, KEEP YOUR PRESENTATION TOP-NOTCH!! If you've got at least Stereo sound in the auditoriums, clean seats and clean prints, people will come in droves. Heck, they might even wait for the movies to come to your theater!! [thumbsup]

Running a sub-run also gives you more flexibility to drop prints whenever you want since you're not locked into a booking contract, and/or program alternative content, such as classic movies on the weekends, or kids movies in the morning. This could generate a lot of revenue and publicity for your theater, too.

Always start small. If you build a megaplex from the get-go, you'll be selling the house to pay for soda syrup. [Wink]

=TMP=

Posted by Tim Reed (Member # 137) on 01-16-2005, 10:05 AM:

Talk to Andrew McCrea. Several years ago, he was in the same position you are, with the same mission. He has all the info.

Posted by Aaron Sisemore (Member # 145) on 01-16-2005, 01:07 PM:

But Andrew, while having good intentions, decided to piss off a number of members with his theatre pipe dream...

More on Andrew's 'Dream Theatre'

Andrew asking about film rentals

He has grown up a lot since then.

-Aaron

Posted by Andrew McCrea (Member # 674) on 01-16-2005, 04:54 PM:

These days, I avoid all of those old threads entirely. I do not and never intend to read them again. When I was actually 12& 13 on these forums and that started, I didn't know what to do and it felt that everybody was coming down on me, but pretty harshly, so I just kind of fought back. We all know how the story went. I'm terribly sorry for that whole thing.

The best advice I learnt was to just get any job in a theatre you can. Do it part time on the weekends (especially Tuesdays and Saturdays as they tend to be the busiest). Then, in time, you will understand more about the industry and will have a better gut feeling if its suited for you. Do start small, but be prepared for a huge pricetag on any size venture.

I can be reached at grandcameo@hotmail.com