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Author
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Topic: Luxury Theaters Article USA Today
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Mike Heenan
Phenomenal Film Handler
Posts: 1896
From: Scottsdale, AZ, USA
Registered: Mar 2000
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posted 03-14-2010 12:46 PM
Luxury
When Americans go to the movies, we know what to expect: Multiplex. Popcorn and soda. Barely comfortable seats. Middling sound and picture quality. We can do better staying home, and yet, despite the recession, we keep going — and going.
Now, as the movie industry celebrates a boffo year of box office — $10.6 billion in ticket sales, the most ever — theaters are going after new revenue and changing the moviegoing experience for millions of Americans, turning some multiplexes into luxury outposts and quasi-community centers while assigning new meaning to the concept of "dinner theater."
So, at the Buckhead AMC in Atlanta, bring on the mango margaritas! While watching the 3-D blue people in Avatar, munch on handmade blue-cheese potato chips at the Gold Class Cinema in Pasadena, Calif. Feast on wine-poached jumbo shrimp in Kansas City, Mo., or lobster rolls with a sweet Thai chili sauce in Redmond, Wash. Try the Wagyu beef burger with applewood-smoked bacon or the shredded duck tacos in South Barrington, Ill. And finish with a darkiccino chocolate brownie in Olathe, Kan.
"Movie theaters are doing very well," says Patrick Corcoran, director of media and research for the National Association of Theatre Owners, which counts 39,380 screens in 5,853 theaters in North America.
No kidding. For generations, Americans have demonstrated that even when they're cutting back on other expenses, they keep buying movie tickets. Despite snowstorms in Washington, D.C., tickets continued to sell out at an AMC multiplex in the Mazza Gallerie mall, which has a fully stocked bar in the adults-only clubroom next to its two premium theaters.
"It makes for a great environment because there are no kids," says Chris Briscoe, 21, as he picks up his Belvedere-and-OJ before taking in The Wolfman.
"It's nice to just sit and have a beer and a conversation and then see a movie," says Pam Davis and Tez Snowdon, who come often. Debra Vekstein, 50, sips red wine at a table while catching up with old friend Linda Girardi, 51, before taking in It's Complicated. "It's the wave of the future," Vekstein says.
Americans' moviegoing habit is so strong that box-office totals (shared by studios, filmmakers and theaters) routinely surge during recessions, Corcoran says. "It's less expensive, when adjusted for inflation, to go to a movie today than it was in 1969."
Even so, exhibitors, as theater owners are called, need more than their traditional two revenue sources (films and concessions) because the films drive the business.
"When the films don't do well, both of those (revenues) are affected," Corcoran says. "So exhibitors look for ways to expand audience or diversify revenue."
Thus, the rise of "dine-in" theaters, which aim to put the traditional dinner-and-a-movie date night under one roof. Instead of rushing through a meal elsewhere before or after the movie (as 80% of moviegoers do), more consumers are visiting the growing number of theaters that have added restaurants and bars serving fine food, wine and alcohol, with tables and wait service, during the movie. Some theaters, such as Gold Class, an import from Australia, serve high-end cuisine; others serve fare that's more like that from TGI Friday's and similar eateries.
"It's a way for theater owners to capture that revenue and keep it there instead of seeing it go down the mall" to a restaurant, Corcoran says.
Entertainment alternatives
Warning: Don't try this with every film.
"It doesn't work with horror films: People don't want to be eating while watching blood and gore," says Mark Mulcahy with a laugh. He's vice president of marketing for Gold Class Cinemas, an Australian-owned chain that has opened four high-priced ($35) dine-in theaters in the USA and plans more. The concept has been successful in Australia since 1997 and has expanded to Greece and Singapore, attracting 2.5 million moviegoers a year.
"We provide what consumers are looking for in the middle of a recession, which is almost total escapism," Mulcahy says.
Other theaters have installed attractive adults-only clubs or lounges where moviegoers can sip cocktails and order finger food before the flick. Many have done away with traditional seating and installed high-backed leather executive or rocking chairs with armrests and footrests for maximum comfort, in theaters that are both roomier and smaller, with as few as 30 or 40 seats. They have online reserved seating, the latest in digital projection, digital sound and super-wide screens, even valet parking.
Meanwhile, in more and more theaters, customers aren't just watching movies. Instead, they're watching a simulcast of New York's Metropolitan Opera or A Prairie Home Companion With Garrison Keillor. They're cheering a boxing match or singing along at a Celine Dion concert, or laughing as Glenn Beck and Bill O'Reilly rant and banter on their current Bold & Fresh tour. Or they're watching The Wizard of Ozremastered in hi-def for its 70th anniversary.
This alternative-content business, enhanced by advances in digital technology such as 3-D, has grown from virtually nothing to more than 10% of a theater's profits, theater owners say.
"The growth has been significant and there's fertile ground ahead," says Kurt Hall, CEO of National CineMedia, a partnership of the largest theater chains that operates the largest digital in-theater network (nearly 17,000 screens) showing content other than movies.
It's such a potentially fertile business that Sony Pictures has gotten into the act with Hot Ticket, the first effort by a major studio to invest in alternative programming for theaters. Hot Ticket has featured such events as the final Broadway performance of Rent and Cirque du Soleil; coming soon: concerts by Celine Dion and Kenny Chesney.
These days more theaters are as busy in the mornings as the evenings, as otherwise unused venues fill up for business conferences, Sunday church services or college classes.
In Toronto, for example, Ryerson University partnered with a nearby AMC multiplex to renovate 12 theaters into classrooms that opened in September 2008. Now, about 8,000 students a week attend one of dozens of classes held in the theaters in the mornings. In the evenings the theaters fill up with moviegoers, some of them students who were there hours earlier, taking a math quiz or attending a lecture.
"I like to say AMC is using our classroom for a theater as much as Ryerson is using their theater for a classroom," jokes Sheldon Levy, president of the university, which invested $1 million in the project, funded by selling air rights above a student parking garage. "We have saved well over $10 million. Also, it provides a revenue flow to (AMC) because the students use the theater food court as a student center. It has been a very big win-win."
Dine-in theaters are still only a fraction of the total number of theaters in the USA (fewer than 300), but the number is expected to grow. Go to a consumer-rating website such as Yelp.com, and there are pages of praise for some premium theaters.
"A theater for grown-ups." "My new fav theater." "Awesome!" "I like to call it movie church." These are some of the recent comments on Yelp about the Arc-Light and Landmark theaters in the Los Angeles area.
Dine-in while watching
In Vancouver, Wash., there's similar praise for Cinetopia (also serving nearby Portland, Ore.), which features amenities such as living-room-style theaters, extra-wide seating, skybox-style viewing, an art gallery and Vinotopia, a restaurant and wine bar with indoor and tropical-garden seating. Other exhibitor companies offering premium theaters include CinéBistro, Cinemark and Sundance Cinema.
"It's a niche concept that has performed very well for us; it complements our existing theater portfolio without competing against it," says Dick Westerling, spokesman for Regal Entertainment Group (the largest U.S. theater chain, with 6,768 screens in 548 theaters), which recently launched its new Cinebarre theaters (five locations since 2007, a new one opening every six weeks by 2011).
Dine-in theaters come in several varieties and charge different prices, ranging from average to up to three times the average ticket, although the price may include a food voucher. The food offerings vary, but it's mostly fare such as sushi and tapas that can be eaten without noisy and distracting utensils.
AMC (the second-largest American theater chain, with 4,574 screens in 304 theaters) has more than 50 theaters with some kind of enhanced amenities, including Fork & Screen (soft bucket seating, waiters take orders from illuminated countertops, extensive munchies menu), Cinema Suites (more upscale food, red leather reclining chairs, personal swivel tables on the armrest, 8 to 9 feet of spacing between rows), and theaters with separate clubs or lounge/lobbies where moviegoers can get a cocktail and light food before the movie.
Andy DiOrio, spokesman for AMC Entertainment, based in Kansas City, Mo., says these theaters are so successful the company is planning to add more.
"Once people experience it, more often than not they don't want to go anywhere else," he says.
Dine-in theaters are a major improvement over the cinema draft houses of the 1970s, which typically offered second-run movies, cheap beer and somewhat shabby surroundings. Now the old draft houses have spruced up: The Alamo Drafthouse chain in Texas fixed up theaters, added tasty food and wine, persuaded movie studios to show first-run movies and kept the ticket prices at the average.
"We started with one screen in Austin, and in a few years we had 47 screens, eight theaters, 1,000 employees, a $40-million-a-year gross," says former Alamo CEO Terrell Braly.
Braly is a partner with Regal working to expand its Cinebarre theaters, which serve items such as pizza made from dough made that day, freshly ground burgers, hand-cut fries and onion rings and homemade desserts, plus beer and wine. You can eat and drink before, during or after the movie. Cinebarre theaters (in Asheville, N.C.; Denver, Charleston, Seattle and Salem, Ore.) are reporting annual growth rates of 17% up to 40%, Braly says.
"The average American goes to the movies 5.6 times a year; our average Cinebarre customer attends slightly less than four times per month," Braly says. "We draw from beyond the traditional three-mile ring to seven to 10 miles. We are a destination, not a neighborhood theater."
It's not cheap to make a theater such a destination, he says. They require decent kitchens, trained chefs and waiters and renovated theaters. "This is not a ma-and-pa kind of business — it's essential to hook up with a big chain."
Still, after a century of more or less the same kind of moviegoing experience for most Americans, why did it take so long to try something new? Braly compares it to the invention of jelly-squeezed-from-a-tube, which is so obviously an improvement on jelly-in-a-jar.
"You think, why didn't people start doing it before?" he says with a laugh. "People were waiting for someone to do it. It's really not genius, it's just logical."
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