This is topic How do you buy a movie theater and get into business on your own? in forum Ground Level at Film-Tech Forum ARCHIVE.
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Posted by Todd Cornwall (Member # 2205) on 11-15-2010, 09:42 PM:
I would like to get any information I possibly can from anyone here that has bought their own movie theater. It seems like a huge task, but I'm so tired of not being able to do things the right way, I figured that I would look into doing it MY way. Problem is, I'm not rich. I know a movie theater wouldn't get me rich either, but because of a severe lack of jobs out there, I thought I'd at least look into the possibility. Anyone have any thoughts? Securing financing is my biggest concern, but finding a theater for sale is also a big task.
Thanks.
Posted by Tom Petrov (Member # 1534) on 11-16-2010, 12:08 AM:
I know three different owners in my area. All independent.
One has two theatres with 11 screens
One has two theatres with 2 screens
One has 20 theatres with (not sure) how many screens.
You must have DEEP pockets or wealthy investors and you MUST know what you are doing.
All three theatre chains are doing ok, not great but ok. Two of them invested in 3D..one invested in RealD as the other invested in Techicolour 3D.
The RealD theatre invested just in time for Avatar and played for a long, long, long while there. The other with Technicolur 3D missed out on Avatar and Alice and Wonderland and they haven't been doing too well with the 3D features as they are not performing well.
The RealD theatre would of been out of business IMO without the investment in digital as they play mainly kids (3D) movies. They are sandwiched between and AMC 24 and Cineplex 9 about 8 miles away each way. However, the they do have a second run house that has a LOYAL following...and is one of my favorite places to see a movie.
I know one of the theatres gets money loaned to them in exchance for a percentage of the concession stand. This same chain actually pays about $18/per hr for a full time projectionsist and has by far the best film presentation in the city.
The last theatre has its own niche and is doing well but does not play much mainstream stuff. Very interesting theatre that is independant, has stadium seating, only does film, no 3D, is in a downtown area and does not play big budget action.
Posted by Todd Cornwall (Member # 2205) on 11-16-2010, 12:18 AM:
quote: Tom Petrov
You must have DEEP pockets or wealthy investors
I have neither. I am afraid of the dwindling attendance, and that scares me. I'd rather work for someone else and let them take all the risk and meager reward, but I'm not finding that. I didn't think it would be easy, or probably even possible to do this, but I want to look into it and see where investors can be found.
Posted by Tom Petrov (Member # 1534) on 11-16-2010, 12:20 AM:
quote: Todd Cornwall
I am afraid of the dwindling attendance
Thats not an issue IMO. The issue is either having the money for future investment (3D tech) or finding a really good niche. People will come if you have something they want.
I know of a theatre in the Greater Toronto Area that screened a Bollywood movie and made $25,000 for the screen over the Diwali weekend.
Posted by Jeremy Weigel (Member # 4208) on 11-16-2010, 01:38 AM:
The first thing is to find a theatre building that is up for sale or lease at a reasonable price and that can be re-opened with minimal expenditures. You'll want to check things like condition of any equipment and furnishings (ticketing, concession, booth, HVAC, and auditoriums) left behind. If there are projectors still in place you'll want to find out if parts are still readily available. You'll also need to check into hiring a reputable film booker.
Once you've done your homework and have a fairly decent estimate of how much it will take to get open and operate for the first year and a business plan, go to a few different banks to see if any are willing to make you a small business loan. Also check if there are any small business grants that you may qualify for. If you get a pre-approval then form your LLC (varies state-state).
There are other resources out there that give good advice on starting your own business. Just do a Google search.
Posted by Todd Cornwall (Member # 2205) on 11-16-2010, 12:08 PM:
OK, so far sounds good.
Posted by Mike Blakesley (Member # 26) on 11-16-2010, 12:21 PM:
The way I did it was, I kept my day job. That way I could put the majority of the profits from the theatre into improvements.
We've done a ton of upgrades and improvements (new seats, digital sound, digital projection, 3D, and lots of random remodelings) over the years. If I was trying to live on the theatre's income, most of that wouldn't have been possible.
- Spend money to make money (it works)
- Don't sacrifice quality for anything, if at all possible
- Don't be afraid to charge industry-standard prices. Your customers will understand if they see you putting money back into the business. If your operation "needs work," let people see that work taking place so your pricing is justified. Lowballing is VERY risky.
Posted by Todd Cornwall (Member # 2205) on 11-16-2010, 01:16 PM:
How did you find your theater? Was it closed or still in operation?
Posted by Don Furr (Member # 1469) on 11-16-2010, 01:21 PM:
First of all you DON'T want to purchase a old theatre building. There is nothing worse than owning a single purpose slope floor building when the business dries up for good. The only thing you can do is rent it to a church for very little $$. I owned and operated 11 locations during the 90's and NEVER bought the first property. DON'T BUY an old theatre.....period. Lease is the way to go.
Don
Posted by Mike Blakesley (Member # 26) on 11-16-2010, 02:08 PM:
Todd - it was in operation, I had worked there for 3 years prior to buying.
Either way you go, just don't listen to naysayers such as:
quote: Don Furr
when the business dries up for good
Posted by Todd Cornwall (Member # 2205) on 11-16-2010, 07:47 PM:
Well, I found a theater (at least it was one) in a mall. I don't know if it's still in tact, but I did work there quite a few years ago, but they close around 2006. Since it is in the mall, it would be a lease....other than that, I have no info. I put out some feelers and plan on going there tomorrow to see if I can look inside. If the equipment is still all there, I might be in luck.
Posted by Martin McCaffery (Member # 37) on 11-16-2010, 08:10 PM:
I'll second most of the above advice, and re-emphasize have lots of money to burn.
Buying the building is just the first part. Then you have to establish relations with all of the distributors, and decide if you are going to book your own films or hire a booker. You will probably be required to fork over advances until you've been showing for a year or two. They will definitely make you sign over your soul and first born.
Establish accounts with concession suppliers. They may want up front money before the first delivery.
And don't forget insurance, business licenses and taxes.
Posted by Bill Enos (Member # 440) on 11-16-2010, 09:58 PM:
With the some of the money you plan to spend on this project buy a gun and one bullet, then put the rest in cash into a metal bucket and set it on fire, while it is burning take the gun and shoot yourself in the foot. This way you will be rid of the money and be at the same point you'll be in in 3 to 5 years and without all the aggravation in between. The long term pain in your foot will serve as a reminder.
This from a good friend who has owned several small businesses
about half of which have been at least moderately successful.
Posted by Todd Cornwall (Member # 2205) on 11-16-2010, 10:09 PM:
Gee Bill, thats beautiful. Thanks for the words of encouragement. ![[Confused]](confused.gif)
Posted by Adam Fraser (Member # 1074) on 11-17-2010, 12:12 AM:
Honestly, if you don't have at least 1 year of cash on hand beyond the theatre investment, don't buy it. Theatres are very cash intensive.
For example in the past 5-7 years here are a few of our normal maintainence costs that had to be paid out of operating profits:
Shingles: $14,000
Paint: $11,000
Well and controller: $14,000
480v 3 phase to 240v 3 phase transformer: $3500
Blower fans and controllers for HVAC: $10,000
Property Taxes over past 5 years: $80,000
And the list goes on, once everything is said and done there typically is not as much left as one would think along with the 60-80 hour work weeks. I would lease if you are just getting your feet wet, and buy when the perfect time and opportunity arises.
Posted by Mike Blakesley (Member # 26) on 11-17-2010, 02:21 AM:
quote: Adam Fraser
if you don't have at least 1 year of cash on hand beyond the theatre investment, don't buy it. Theatres are very cash intensive.
That's good advice.
When we bought my theatre, we did not have a lot of extra cash but we set up the note so no money was due until 10 months after we bought the place.
Posted by Bill Enos (Member # 440) on 11-17-2010, 01:54 PM:
Sorry Todd but my friend who made that statement says it's true, he's a true entrepreneur and about to launch a new small business venture. About the only thing he won't touch is a restaurant.
Posted by Tony Bandiera Jr (Member # 2365) on 11-17-2010, 02:47 PM:
Todd, Bill's anecdote may have been a bit harsh, but if you think that was too much to handle then don't even try to open a theatre.
With the current trends in the industry, the economy in general and the FACT that theatres traditionally make little or no money (many chains have several locations that operate at a big loss, it is the others in the chain that sustain them) you are looking at one of the worst possible investments from a fiscal standpoint.
I have a colleague who "inherited" an older twin in Illinois and it has been a major money pit, despite some successful live events and film programs he has held there. Only the very low purchase price and the fact that he has disposable income has allowed him to sustain it.
I too have always wanted to open and run my own theatre, but when I really dug into the nuts and bolts of it I realized that, unless I either was given the property or had a super-cheap lease it would have been financial suicide. The mall situation you mention is very unlikely to have a cheap lease...and if the lease is cheap it means the mall is having financial difficulties.
For a mall location, you MUST have the support of other stores, food court, etc. to help bring in the crowds, otherwise you'll die a quick death. That happened to malls in Buena Park and La Mirada California.
Despite what "Field of Dreams" would lead you to believe, if you build it, they won't always come.
With all that said, I do hope you find the right situation and prove me (and a lot of others) wrong. ![[Big Grin]](biggrin.gif)
Posted by Todd Cornwall (Member # 2205) on 11-18-2010, 12:13 AM:
Yeah, I'm starting think that. I remember plenty of times that our 10 plex sat with maybe 5 or 6 people in the entire building for the first few runs.
I wanted to do this in order to do things the right way. I always believed that if you do it right, people will show up. Perhaps I should continue looking to work for the perfect boss....and that most likely isn't a big company (from what I've experienced).
Posted by Mike Blakesley (Member # 26) on 11-18-2010, 01:24 AM:
Well...I guess we have beaten the odds here, but we have a few things in our favor. First, the theatre was built well to start with, so we haven't had to do any major changes to the building. Almost all money spent has been on improvements.
Other than that, I think an indie can still be successful if you follow these thoughts:
- Don't be afraid to charge high enough prices, both at the boxoffice and concession stand. If your business plan is to annihilate the competition with your low prices, just go ahead and set fire to your money now.
- If you're doing mainstream films, you HAVE TO play movies on the break. If you plan to wait until the percentages come down for anything but non-hits, might as well just head straight for bankruptcy court.
- But, if you only have a couple of screens, don't try to play everything on the break. My guideline here is to try to play as many of the "hyped up" blockbusters on the break as I can. The smaller films and sleepers can wait a couple of weeks and sometimes might even do better if you wait a while (think "The Blind Side").
- Don't hire a bunch of teenagers to run the place for you. Your audience will react favorably if they see the OWNER in there selling tickets, working the concession or whatever. Go ahead and hire teens to work, but keep after them to NOT act like typical mall rats. Be very picky about who you hire.
- Keep the place as clean as you possibly can.
- You must have digital sound. If you find a place that has decent film equipment, but analog sound, that's the ONE thing you absolutely must upgrade to ASAP. "The audience is listening," indeed.
- Remember that the movie business does not have holidays. Don't run the place at your own convenience. If you don't love the movie biz, you shouldn't be in it because you will lose your dedication. Work hard, but take time off occasionally to keep your sanity.
- Be personally involved with your schedule. Don't just let your booker tell you what's playing. Study the upcoming product so you'll know what to tell the booker you want to play. Also, listen to your booker; he's been in the business a long time and may surprise you with his knowledge. But over time you'll get to know your own market as well, or better, than he does.
- Listen to your audience, but don't listen too hard. Some people think you need to bring in a Barbra Streisand Film Festival over the holidays. Incorrect.
Posted by Jonathan Smith (Member # 5609) on 11-18-2010, 02:01 PM:
I don't know the size of a place like Forsyth, Montana, but if you are near a major metropolitan area, I would say six screens is the bare minimum to eek out a living as a first run. Eight would be better.
Unless you are showing art films or something that has a specialist appeal, or a classic or 2nd run format, it is really really tough to get a movie, with a guaranteed showing of two weeks, that tanks. The multiplexes can deal with one screen being dead, as that is a small percentage of their total screens, but when it is a half or a third of your seats that are empty, that can turn two weeks into a total loss.
All of the small or independent small theatres around here, even an 8-plex are struggling just to stay open.
Posted by Mike Blakesley (Member # 26) on 11-18-2010, 02:56 PM:
I don't know, there are a lot of weeks in the year where there are only one or two titles that are doing any business. When we are playing one of those titles, it's a good week! I can't imagine trying to fill an 8 or 10 or 20 plex some weeks.
Posted by Robert E. Allen (Member # 1351) on 11-18-2010, 03:31 PM:
It appears to me that when many people talk about running a theatre they always refer to "first run". I've come to the conclusion that for them "first run" means "whatever Hollywood is promoting because I don't have the desire or knowledge to book outside the box and do my own promoting". It seems those people assume "first run" is the only way to successfully run a theatre. To them I would say do a little more research and learn more about the business, about your potential audience and about the many successful theatres that run something other than whatever Hollywood is promoting at the moment. What Hollywood has done in recent years is limit their customers to a particular audience (usually those who prefer violence, sex, profanity and amoral subject matter). Most theatres allow themselves to be nothing more than an extension of the studios (it used to be such theatres were actually owned by the studios) and then complain when they don't make much profit. I will usually advise someone wanting to open a theatre in a competitive situation to "be different" from the competition. "First run" does not guarantee success. Good programming (including independent, classic, foreign, family, faith based), good presentation, great service, reasonable prices and catering to your community will. Just my take on "First run"-itis.
Posted by Jonathan Smith (Member # 5609) on 11-18-2010, 03:54 PM:
I assume the comment above is directed towards me.
Since only one commercial theatre in town here is catered to a non-Hollywood blockbuster audience, and a second is 2nd run of mainstream movies, I would assume that is what most theatre owners want to sell, because that is what they are selling.
If I were to open a theatre (not that I ever would), I would offer a healthy mix of classic films ('60s, '70s, '80s, '90s), as well as some indies, foreign films, and a few mainstream movies.
Posted by Robert E. Allen (Member # 1351) on 11-18-2010, 04:05 PM:
OOPS!
Posted by Jonathan Smith (Member # 5609) on 11-18-2010, 04:21 PM:
Robert: ?
quote:
- Don't hire a bunch of teenagers to run the place for you. Your audience will react favorably if they see the OWNER in there selling tickets, working the concession or whatever. Go ahead and hire teens to work, but keep after them to NOT act like typical mall rats. Be very picky about who you hire.
[. . . ]
- You must have digital sound. If you find a place that has decent film equipment, but analog sound, that's the ONE thing you absolutely must upgrade to ASAP. "The audience is listening," indeed.
I think "teenager" is a terrible stereotype. There are :sex:tards all the way up the age ladder in this industry. I would paraphrase this as "Don't hire people that have the IDGAF attitide." Sometimes these people take the form of theatre managers, theatre general managers, or ten year veterans.
I will probably have people on here jump all over me for this, but most people couldn't care less about the sound as long as it is loud enough. There are theatres, big chains that do very successful business with MONO sound in a surprising number of auditoriums.
Cinemark didn't bother to install digital sound in a new theatre here in 2007, except for four or five screens, because of the "pending digital transition." Two of their five digital sound systems weren't even working right (Dolby Digital) when I got fired.
Posted by Robert E. Allen (Member # 1351) on 11-18-2010, 04:43 PM:
It was a double post on my part. Since I couldn't delete it I couldn't think of anything else to say after that mini-sermon.
Posted by Mike Blakesley (Member # 26) on 11-18-2010, 05:01 PM:
quote: Jonathan Smith
I think "teenager" is a terrible stereotype.
Not really. I have 5 teenagers working for me who are some of the best people I know. They are all responsible and do a good job. If I wasn't proud of them I wouldn't put their picture on Film-Tech every year.
BUT, if we were to let them run the whole place on a daily basis while I sat home and watched TV, our high standards might get relaxed. Pretty soon their friends might be hanging out, they might give in to spending half their shift texting, and so on. This is not because they're irresponsible; it's just youthful exuberance kicking in. Our kids do a great job partly because they know my wife and I are going to be there every day and we insist that they do a great job.
Our local grocery store here is a perfect example of what I'm talking about. In the evening, sometimes it's nothing but high school kids running the place. They're all nice pleasant kids, but they don't all know yet how to operate independently in a responsible manner without supervision. This is not a criticism of them; it's just that they haven't matured yet. So they goof off; they talk to each other and ignore the customers, and so forth. If they had supervision, it might be a different story.
quote: Robert E. Allen
What Hollywood has done in recent years is limit their customers to a particular audience (usually those who prefer violence, sex, profanity and amoral subject matter).
That's just a ridiculous statement.
Posted by Tony Bandiera Jr (Member # 2365) on 11-18-2010, 05:58 PM:
quote: Jonathan Smith
I will probably have people on here jump all over me for this, but most people couldn't care less about the sound as long as it is loud enough. There are theatres, big chains that do very successful business with MONO sound in a surprising number of auditoriums.
I'm not going to jump on you but I will respectfully disagree with you on this point. Loud does NOT equal good.
And yes, there are still some mono systems out there that can sound quite acceptable, as long as the dialog is clear and intelligible. Those are the exception rather than the rule though.
Real-life example: When I ran the Laemmle Grand in downtown L.A. we had four IDENTICAL screens, originally all with mono sound (those crappy Strong sound amps in a drawer with the hideous first generation "Hilite" consoles.) I later added surround sound (Ultra*Stereo center/surround with JS 5/95 processors) to theatres 1 and 2.
Guess which two auditoria were most requested/attended? There were a few times I moved popular prints to put them in the "stereo" houses by customer request.
I agree with Mike that digital sound (and a correctly aligned, operational analog reader) is essential for ANY theatre today, for two reasons:
1) It does make a difference in attendance, however slight; and
2) A lot of labs aren't paying any attention to the optical tracks and I have had many prints come thru UC Irvine with bad analog tracks, thankfully now I can play in digital and avoid them.
Posted by Mitchell Dvoskin (Member # 751) on 11-18-2010, 07:04 PM:
All the advice in this thread is good, especially about having deep pockets, or an investor, or better yet, a partner with deep pockets.
Just want to add:
If you are looking at an existing location that is currently closed, there is usually a reason why it is closed. The question you have to ask yourself is what can you do better than the prior owner. Assume you will do the same, or worse, at least initially. Will you be able to survive?
Leasing closed theatre can be a mixed blessing. If the landlord is hungry enough, you may be able to negotiate a percentage lease, ie, no fixed rent, but a percentage of your gross. If you are very successful, that will cost you, but it brings the cost of entry down. Still, you will need deep pockets for all those other expenses like taxes, labor, insurance, utilities, building maintenance, and film costs.
Remember, the most common reason that businesses fail, in any industry, is lack of capital.
Posted by Robert E. Allen (Member # 1351) on 11-18-2010, 07:05 PM:
quote:
quote: Robert E. AllenWhat Hollywood has done in recent years is limit their customers to a particular audience (usually those who prefer violence, sex, profanity and amoral subject matter).
That's just a ridiculous statement.
Hey Mike: I started in this business in 1946 as a young teen following in my father's footsteps and was last active as a manager in 2007. I base my statement on experience in all aspects of theatre operation and having watched exhibition morph into what it is today. On what do you base your comment?
Posted by Mike Blakesley (Member # 26) on 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.
Posted by Robert E. Allen (Member # 1351) on 11-18-2010, 11:26 PM:
Yes Mike there are some decent films out there but they are in the minority. The last single screener I managed I refused to book R rated films. Business was generally good because I was located in a small town much like you. In that I envy you. But while the media (all forms) like to say they reflect society (in an apparent attempt to escape their responsibility to that society) I have concluded that the media I love is in large part responsible for shaping society and not for the better. It has taught our children that the way to settle things is through violence, that profanity is the acceptable way to speak, sex is just another way to get your kicks without commitment and people of faith and good morals are to be ridiculed. And through the abundant use of bloody special effects has desensitized many to human pain and tragedy. Fortunately there are exhibitors like yourself who apparently keep such films to an absolute minimum or don't book them at all. I hope the OP wants to be such an exhibitor.
Posted by Mike Frese (Member # 4361) on 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.
Posted by Robert E. Allen (Member # 1351) on 11-19-2010, 02:52 AM:
quote: Mike Frese
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.
I am indeed saying 1000s of theatre owners are making horrible decisions about what they play. My conclusion is that the corporate big boys and many smaller owners are amoral and apparently put the bottom line ahead of their responsibility to the community. In other words they apparently think playing what I call "garbage" that Hollywood pushes is the only way to make money. I believe one can play what I call "more acceptable" films, develop
a respected position and the bottom line will be boosted as the largely unserved audience is awakened and returns to the theatre. There is no way this will happen at most theatres because those owners just don't give a rip about their
responsibility to the community. But it is my hope that many in exhibition will wake up and stop being Hollywood's puppets.
Posted by Mike Blakesley (Member # 26) on 11-19-2010, 03:23 AM:
quote: Robert E. Allen
put the bottom line ahead of their responsibility to the community
Well it all depends on what you need to do to make a profit. I'm sure it would be better for our community if we ran nothing but G-rated religious films; but we'd be out of business in a month if we did that.
Even if I had the ability to keep losing money for several years while promoting such movies, I can tell you the public of this or any town would never "wake up" and start patronizing that kind of fare. They would just stop coming to the theatre and would rent their movies on video, because the people here want the same kind of movies everybody else wants. I would love to never run R-rated horror movies, for example, because I don't like them; but if that's what my amoral, maladjusted audience wants once in a while, I'm more than happy to give it to them. We are here to serve our audience, not try to dictate good taste.
My point at the beginning of this little argument was that there are A LOT of wholesome movies out there and many of them do just fine. You just keep repeating the nonsense that there is nothing out there today but amoral filth. That's just not true.
Posted by Adam Fraser (Member # 1074) on 11-19-2010, 09:57 AM:
I do like your positions Bob, but we have also tried to play religious films and lesser known family films. Only about 1 in 10 is successful.
A theatre owner that we are friendly with recently played a limited market religious family film. Even with a sponsor that paid 1/2 of the 50% film rental and calling all local churches and inviting them to come, he just broke even from what he said. We also do this on occasion with the same results. But if we did this every week or even once a month, we would be out of business quickly.
If we possibly had a larger market, or were in the deep religious south you could make it happen. If the movie is outside of the top 10 and not of specific local interest we typically average a weekly gross of $500-1000 no matter how much we promote it, our weekly bills are in the neighborhood of $2000-2500.
Posted by Robert E. Allen (Member # 1351) on 11-19-2010, 11:43 AM:
Thanks for your comments guys. At least we know where we are each coming from. I don't really think I will ever see our industry improve but as long as I hold out hope I can continue to take pride in it (not necessarily what it's doing). And Mike, I don't believe the only thing out there is amoral filth. I just believe it's in the majority.
Posted by Scott Norwood (Member # 30) on 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.
Posted by Tom Petrov (Member # 1534) on 11-20-2010, 12:30 AM:
quote: Scott Norwood
state of HVAC system
I remember at the independent I worked at. The owner didn't have the money to pay for a major HVAC service so we had to go all September and October without heating. Customers were wearing jackets and hats at one point.
quote: Tony Bandiera Jr
For a mall location, you MUST have the support of other stores, food court, etc. to help bring in the crowds, otherwise you'll die a quick death. That happened to malls in Buena Park and La Mirada California.
Its acutally the other way around. Movie theatres at malls or in malls become destination store/anchor tenants as the theatres brings people (who would otherwise not go to the mall) to the mall.
Most major malls in the GTA have theatre outside the mall as restaurants usually surround the theater.
Posted by Mitchell Dvoskin (Member # 751) on 11-20-2010, 08:28 AM:
quote: Robert Allen
I have concluded that the media I love is in large part responsible for shaping society and not for the better.
I strongly disagree. Media just reflect the morals and values of it's times. Which of us is right? In this case, the hypothesis was tested back in the 1970's by Jerry Lewis. While there are many reasons the Jerry Lewis Theatre chain failed (search for threads dedicated to this topic), the BIG reason was they would only book G and GP (PG used to be GP) at a time when they were becoming quaint relics for anything other than children's films.
quote: Robert Allen
My conclusion is that the corporate big boys and many smaller owners are amoral and apparently put the bottom line ahead of their responsibility to the community.
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.
Robert, there is nothing wrong with having the values you do, but expecting others to share them is naive at best, and condemning people who do not share them is insulting.
Posted by Mike Blakesley (Member # 26) on 11-20-2010, 10:19 AM:
quote: Tom Petrov
Movie theatres at malls or in malls
Big difference there. Theatres IN malls are often cramped, because of the huge per-square-foot rental or lease. Seems like the trend lately is a theatre separate from the mall itself, but sharing the parking lot.
Posted by Martin McCaffery (Member # 37) on 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;>
Posted by Mike Blakesley (Member # 26) on 11-20-2010, 12:16 PM:
He just left out one word -- he should have said "the majority of their moviegoing community." ![[Smile]](smile.gif)
Posted by Tony Bandiera Jr (Member # 2365) on 11-20-2010, 02:40 PM:
quote: Tom Petrov
Its acutally the other way around. Movie theatres at malls or in malls become destination store/anchor tenants as the theatres brings people (who would otherwise not go to the mall) to the mall.
In your experiences perhaps, but the way I stated it has been the case here in So Cali. for the two locations I have mentioned and many others.
A prime example is the Gardenwalk in Anaheim, CA. They started off with some major anchor stores and the 16 plex there did great business (actually it is a 15 with an IMAX 15/70).
When the mismanagement of the mall caused two of the major anchor stores to leave, other stores followed and the theatre is now struggling to survive. And it is a very nice theatre. The mall itself is a ghost town...the presence of the theatre is NOT bringing in crowds! And they are first-run, day and date with openings.
With that said, it is also a "partnership" in terms of bringing in crowds, both are dependent on each other to keep the people coming back.
But the idea of which one actually brings the crowds in first can vary, perhaps by region and demographics.
Since So Cali has a plethora of malls/shopping centers, that could easily be why the situation here is opposite of what you are experiencing.
Posted by John Wilson (Member # 269) on 11-20-2010, 03:19 PM:
Southern California has shopping malls? When the hell did that happen?
Posted by Aaron Mehocic (Member # 15) on 11-20-2010, 07:43 PM:
quote: Robert E. Allen
Fortunately there are exhibitors like yourself who apparently keep such films to an absolute minimum or don't book them at all. I hope the OP wants to be such an exhibitor.
Oh, I think the "OP" realized Bill and Tony sent his dreams up in flames on November 18, around 12:15 AM . . .
Posted by Todd Cornwall (Member # 2205) on 11-21-2010, 05:34 PM:
The mall location I was initially interested in was left a disaster area. Apparently when the tenants left this theater, they purposely punched holes in the walls, slashed the screens and RIPPED the seating out. I spoke to the last person to manage it and he said that the company wanted to make sure that nobody could walk in and have an easy time of it. That was very depressing...number one because it sounds like it won't work now, and secondly, because it was a beautiful theater when it opened up in 1991.
Posted by Mike Blakesley (Member # 26) on 11-21-2010, 08:40 PM:
Well replacing the screens isn't too expensive, and the walls could be "soundfolded" for a temporary solution. THe seats might be another matter. I wonder what condition the booth and sound systems are in?
Posted by Brad Miller (Member # 2) on 11-21-2010, 10:17 PM:
Mike, a procedure I've seen a fair amount of is to remove all of the equipment. I doubt there is anything still up there, and if it is up there, it is common practice that people will sabotage it. This way if someone goes in there to re-open a theater, they will have everything they see wrong to pay for...and then once they strike the deal and move in, they have everything they DON'T see wrong to pay for...and then they go bankrupt in the attempt.
There is no telling what sort of electrical, speaker or general low voltage wires have been cut and then shoved back into conduit to look in-tact that is waiting for the foolish to enter. I've heard of people flushing plaster mix into the toilets and so forth. I would recommend Todd walk from this one.
Posted by Michael Riley (Member # 5693) on 11-22-2010, 11:13 AM:
Movie theaters inside of malls are a huge money pit, and I don't think I've ever seen one that was able to successfully turn a profit. A few factors that contribute to this:
The rent on mall space tends to be very high even for a small retail store, but for a movie theater, you're talking astronomical, in the range of six figures a month. This alone is a deep enough hole that even the big chains can't dig out of.
Mall landlords are amongst the worst I've ever delt with. They have no problem at all telling you how to run your business, but whenever they cause problems for you, they will drag their feet for months.
Most malls have food courts, soda machines, and dollar stores with candy that will kill your concession stand. People will bring in outside food and drink, and there won't be much you can do to stop it.
The clientele at malls are the worst kind for theater business. Mostly rowdy kids that get dropped off by their parents, and only have enough money for their one movie that they don't even want to see and will spend the entire show talking, texting, or disturbing other people that actually want to watch the film. This in turn drive away the customers that actually have money to spend, but don't want to go to your theater and deal with the riff raff. This assumes that the kids even have money to buy a ticket in the first place. Many of them don't, and will spend the evening loitering in your lobby, trying to sneak in, and / or causing property damage. This in turn will force you to higher off duty cops for security at around $45/hr further eroding your bottom line.
Maybe I am over generalizing, but mall theaters are the pits, which is likely why the big chains stick to stand alone or strip mall buildings now.
Posted by James Westbrook (Member # 3690) on 11-22-2010, 02:12 PM:
Mall theaters are really a bitch to work in during the holidays. I don't miss it.
Posted by Mitchell Dvoskin (Member # 751) on 11-22-2010, 02:33 PM:
quote: John Wilson
Southern California has shopping malls? When the hell did that happen?
I heard a rumor that they are going to shut down the trolley system and build some kind of road called a Freeway...
Posted by Bobby Henderson (Member # 840) on 11-22-2010, 02:50 PM:
As a customer I usually will not visit a theater located inside a shopping mall building. Unruly teens are the main turn-off. Due to construction limitations of being inside a mall auditoriums can have certain features that lower presentation quality to new levels of suck.
Posted by Mike Blakesley (Member # 26) on 11-22-2010, 03:01 PM:
There was a mall theatre in Rimrock Mall in Billings, that started out as Rimrock 4 then became Rimrock 5, without adding any square footage. Their auditoriums were all smallish but when they converted the largest two into three, it pretty much turned two semi-OK auditoriums into three crappy ones. They closed not too much later and Carmike built a new 10-plex nearby.
Posted by Bobby Henderson (Member # 840) on 11-22-2010, 03:42 PM:
I don't like the two interior shopping mall theaters we have in our area (the Showplex Central Mall 12 in Lawton and the Carmike Sikes 10 in Wichita Falls).
The Central Mall 12 theater has a list of problems in its structural design and equipment choices, but the teen crowd is the biggest deal breaker there.
The Sikes 10 in Wichita Falls previously had 6 screens and then was renovated in 1997. The two largest, new theaters (THX certified at the time) had practically no slope in the auditorium. The sound systems didn't sound very good either (loud but harsh and mid-rangy). The smaller auditoriums have fixed aspect ratio screens. Anything in 'scope will be missing substantial parts of the left and right ends of the image. If they did common width to fit the entire image on the screen the 'scope image would not seem much bigger than a lot of HDTV sets. With an image that tiny why bother going to the theater?
To throw in my 2¢ about alternative programming, particularly faith based movies, the Carmike location here shows such movies from time to time. Unfortunately they do not do well at all unless some sort of grass roots marketing effort takes place at local churches and elsewhere in the community. Even then, sell outs and hold-over engagements are going to be rare. Typically, those movies play 1 or 2 weeks and quietly leave.
I'm pretty sure the most successful faith oriented movie our local theaters have shown in recent decades was The Passion of the Christ. And that's one of the most gory, unsettling movies I've ever seen.
I don't agree with the notion the mass media shapes the morals of society. Real morals and more important than that: real honor is taught and instilled in the home. If the parents aren't doing their jobs well enough then others in the child's personal life will apply their influence, good or bad. Mass media only puts out what it believes the public wants to see.
We as a society ALWAYS blame our problems on external factors rather than ever own up to our own accountability for contributing to the problems and making changes to lessen the impact of those problems.
Posted by John Wilson (Member # 269) on 11-22-2010, 04:48 PM:
quote: Mitchell Dvoskin
I heard a rumor that they are going to shut down the trolley system and build some kind of road called a Freeway..
Bah! Eddie Valiant won't let that happen.
Posted by Bobby Henderson (Member # 840) on 11-22-2010, 05:24 PM:
That lame brained freeway idea could only be cooked up by a toon!
Posted by Todd Cornwall (Member # 2205) on 11-23-2010, 11:21 PM:
This was a very nice movie theater. It was built when the mall was built having in mind that this was going to be a 5 screen theater. When it was built in 1990 is had the best of everything. I was really disappointed to hear of it's demise. With all of the equipment taken out and the walls and screens vandalized, I will be passing on this ex-theater. I am very disappointed in the theater company for doing what they did. It held a lot of good memories for me.
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