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Author Topic: Information on Movie Theater Business Mike Lauber Film Handler Posts: 19 From: Fond du Lac, WI, USA Registered: Nov 2002 posted 10-25-2003 07:55 PM                     Hi there. I have decided to do a research paper about opening and running an independent movie theater. I was wondering if some of you could suggest some sources that would contain good information on getting started in the theater business, or sources about opening a business in general that would be particularly useful. This is not a huge research paper, so I don't need any extremely specific or in depth information... just the basics. Thanks for your help. Mike Lauber  |  IP: Logged Kenneth Wuepper Phenomenal Film Handler Posts: 1026 From: Saginaw, MI, USA Registered: Feb 2002 posted 10-25-2003 08:16 PM                     Hello Mike, There are a lot of very expert people on here who can answer any of your questions with real experience data. Your paper is pretty broad and we would like you to be more specific. To what course or class is this paper to be submitted? Is your interest purely business and financial or do you want really technical and specific information on opening a theatre? I would offer that your first step will be to do a feasibility study which will include awareness of your competition and availability of a possible audience for your theatre. Secondly you will need to find a suitable structure for the housing of the theatre. The structure may be existing, needing modification or perhaps construction of a new facility all together. Each of these steps will contain a miriad of questions which you will need to answer before you approach investors, unless you are independently rich, for support of the financial venture. We are here with the experience and answers if you can feed us the questions. KEN  |  IP: Logged Mike Lauber Film Handler Posts: 19 From: Fond du Lac, WI, USA Registered: Nov 2002 posted 10-25-2003 09:24 PM                     Yeah, I knew there would be lots of good information from people here! I haven't thought much yet about the specifics of what I want to research. I believe that I would like to focus just on the business side of the topic rather than technical. For example, how to know where is best location for a theater, how you can try to assure you wouldn't be driven out by a corporate chain, difficulties you must deal with for not being corporately owned, steps you must take to rent films, and whatever laws and guidelines go along with opening a independent theater. It will only be about a ten page paper. It would be particularly useful if I could find some written resources for lots of this information, although I think most of my best information will be from individuals. I'm very grateful for anyone's input.  |  IP: Logged Roger Katz Film Handler Posts: 61 From: Thomaston, CT, USA Registered: Feb 2003 posted 10-26-2003 08:12 PM                     Go to the forums at Big Screen Biz ( http://www.bigscreenbiz.com/ ). Set your browser to view all posts, not just the newest. There is wealth of useful information in the archives there.  |  IP: Logged Kevin Roudebush Film Handler Posts: 29 From: Salem, OR, USA Registered: Sep 2003 posted 10-27-2003 12:53 PM                     I am currently in the process of opening an independent theatre. Therefore, I'm going through the process in real life and have been doing your research for the last 4 months; extensively for the last month and a half. I've got a bullet point business plan that still needs some meat, a financial model that I built, and even floor plan diagrams for a building I'm looking at. It would be interesting to have you challenge my plan and assumptions as a way of researching your project and in exchange for providing me with pertinent information you find that I might have missed. One thing I know I'm missing is a "common pitfalls of opening a theatre." Anyone know where I can find this information?  |  IP: Logged Aaron Sisemore Flaming Ribs beat Reeses Peanut Butter Cups any day! Posts: 3061 From: Rockwall TX USA Registered: Sep 1999 posted 10-27-2003 06:15 PM                     quote: One thing I know I'm missing is a "common pitfalls of opening a theatre." Anyone know where I can find this information? You will get most of it here. Some of the things that will get you into trouble include: -Opening a theatre that has recently closed: The place you are considering re-opening closed for a reason, Find out what that reason is or you too might be 'closed' shortly. -Booking films because you think they are 'cool' or because they are your 'personal favorites': I have seen the disastrous results of this on several occasions with people that had run repertory houses- Audiences generally don't share ones personal tastes. -Adding 'non-standard' items to the concessions menu: Granted there are a very limited number of places where the 'oddities' do successfully sell, but once again from previous experiences I have seen operators buy quantities of items that people 'request' that you sell at the snack bar only to find that the requestees don't buy them (sometimes because your necessary 'markup' is 'excessive' to the requestees) and then you have a room full of 'organic/natural' food items that rots away in storage then goes right to the dumpster. I am sure that there will be more added to this list. -Aaron  |  IP: Logged Kevin Roudebush Film Handler Posts: 29 From: Salem, OR, USA Registered: Sep 2003 posted 10-27-2003 08:27 PM                     (Thanks for not giving me the - oh, all these answers are here, just read response and leaving it at that. I've been reading everything I can on this site for the last month - and other sites too.) I do agree though that Mike should definitely read through this site and the other mentioned. There IS a ton of information. It has helped me understand the industry and I think I've done my due diligence to make sure my project works. The theatre was closed 7 years ago. Regal owned it at the time and opened an 11 plex about 7 miles away. At the time, they closed the theater. No one picked it up. Since then, the town has expanded and grown in the direction of the old theatre but the chains are already committed to other parts of town. They own three theatres (22 screens) and all run first run movies only. There are no second run houses with a population of over 300k. There is one small art house downtown but does not show mainstream movies. Does this sound like the right mix to anyone for justifying opening a second run house? I've read all kinds of comments about newbies trying to get into the business. I don't have a ton of capital and know I have to get started small. The notes/comments on this site are very discouraging to a potential new operator. It is almost like there needs to be another forum for "So you want to open a theatre" not to discourage people from doing it but to make sure they are armed with the complete and correct information to make and informed decisions. You don't want people would could make something work walk away when they shouldn't and you don't want people trying something when they should walk away. The key to this is information. In my situation, I've run my numbers and have quotes on all the expenses I understand from my research. The business still makes sense. I understand advertising and have ideas on how to build attendance. Again, it isn't what you know that kills you, it is what you miss. So, anyone who has experience with things that happen that you wouldn't think about but cost you money would be very helpful. A good example might be taking into account changes to the building to accommodate ADA requirements. A last minute $10,000 remodel project on the bathrooms could kill you. (In my case, I'm putting it in the lease that the landlord has to meet those requirements.) Will there be unexpected booth expenses? Repairs often and cost a lot? Expenses other than supplies like film guard, gloves, tape..??? House expenses - fire retardant materials, sound absorbing materials, screens? Do you have to spend much on that on an ongoing basis? Concessions - equipment expenses seem minimal. Any shocking costs crop up there other than COGS - cups, napkins, cleaning supplies, etc.? Operating expenses - Does it cost a lot in electricity to run the bulbs? Do you keep them on 24hrs a day? Three sets of projectors - is $1500 a month reasonable running three shows a night and only matinees on Sat and Sun? Any other surprises? Film buying - $300 a month for a booking agent for screens reasonable? Are there shipping costs for the movies or is that covered by the studio? If not, what is the cost to ship film? Other items? Staffing - since this is up to 42% of your expenses, I bet this is an area that must be managed closely. Right? Any tricks? Okay, this is getting long. You get my point. Thanks for any feedback.  |  IP: Logged Steve Kraus Film God Posts: 4094 From: Chicago, IL, USA Registered: May 2000 posted 10-27-2003 09:43 PM                    You might want to find others in the sub-run business and see what they have to say since they would know not just about theatre operations in general but sub-run specifically. And given your location they probably wouldn't worry that you might be an eventual competitor. Sub-Run is probably not the business it once was given the ever narrowing window between sub-run and the video release. But then again you did say "second run" so perhaps you mean to pick up films that the chains have dropped that still have some first run life in them and just run them at a more moderate admission price, not the buck or two buck sub-run level. If they only have 22 screens there could be a market niche there.  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 10-27-2003 10:40 PM                        Watch out for Regal turning one of their old properties into a sub run house. That's what Carmike did in Billings, Montana: Built a new 10-screen, closed an old 2-screen, and turned an even older 7-screen into a dollar house. As for booking -- it often depends on your grosses. I have dealt with 3 bookers in my life -- two of them charged a flat rate per screen, and the third gets 3% of the theatre's grosses. Bulbs - no, you don't leave them on 24 hours a day, although some guys leave them on for the duration of the day's shows (not turning them off between shows). Film shipping - you'll probably pay all the cost (in and out) yourself. Here in the boonies of Montana, it costs $18.11 each way for a Technicolor print, approx. $60 (total) for an ETS print arriving and leaving via UPS, and about $150 if we have to ship it via the Greyhound bus. Last year, we spent approximately $4000 on shipping for our single screen, almost all of it for film -- maybe 1% for advertising materials. (However - we play most movies for just one or two weeks, so we may have more changes than you may have per screen.) As for trailers and one-sheets, the big chains are over-run with them while the small indies have to find their own. Some distributors will give materials to you free and/or pay the freight on them for you, but others won't. Here's the way it is here: - Disney, Miramax, New Line: We pay $5 for each one-sheet, plus shipping. Trailers are free but we pay for shipping. We order through Technicolor. - Sony and Fox: We pay nothing at all. It's great. These two are the best. All ordering done via website. - Warner Bros. and Paramount: We pay $60/screen/year to each of them which covers trailers, onesheets and shipping. Ordering is via email, but they're often out of stock on trailers especially. - Universal: We order from their website and pay nothing, but they are often "out of stock" on desirable items. - Dreamworks and MGM: We order from Technicolor and pay only for shipping. Concession equipment: Minimal? It depends on your definition of minimal. We spent over $6000 for our Cretors popcorn machine several years ago, and it's about in the middle of the line size-wise.  |  IP: Logged

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