Small town theater buisness plan

[Greg Melartin]

Hello,
. I'm writing a buisness plan to open a small 40 seat theater in a small town.
. I've read through the forms but am still lost on a few things.
. I'm lost on how to get licensing for movies and equipment.

How do i establish connections with the studios?

Do i have to use commercial projectors and sound systems or would i be able to use a really good home system?

[Frank Cox]

The easiest way to get the movies, especially if you've never done this before, is to get a contract with a booker. Some of the people on this website can give you contact information for bookers in the US. Then they deal with the movie companies for you.

If you want to play movies that are in theatres and not stuff on home video, then you'll need to have DCI-compatible projection equipment. The movie companies won't give you their movies unless you have that; "a really good home system" won't do, regardless of how "really good" it is.

[Ed Gordon]

How to Obtain a License to Show Movies in a Private Theater
By Fraser Sherman, Contributor

You need a license to show a movie for anything other than personal, private use. It doesn't matter whether you own the DVD or whether admission to the screening is free. If you violate the movie copyright, studios can be aggressive about penalties.

Who Needs a License?

Everyone needs to license any films he shows. It doesn't matter who you are or why you want to show it. The licensing requirement applies to charities and for-profit businesses, arts and film festivals, film clubs and summer camps.

There are some exceptions. If you're showing scenes from a movie as part of a seminar or class, that might qualify as a fair use of copyrighted material. Old movies that have fallen into public domain don't have a rights holder. Identifying whether a film is definitely public domain may take a lot of research.

Warning

The penalties for showing a film without a license are up to five years in prison and $250,000 in fines.

Find Out Who Has the Movie License

A movie showing license isn't like a contractor license. It's not a license to run a movie theater but to show a specific movie for a given period at a given time. Different businesses have the license arrangements with different studios for different movies. Criterion, Swank and MPLC are the major players. If you're looking for specific films, contact the companies and find out which one has the license. This is their business, so they'll be happy to help you.

Pay for the License

After you find the company to talk to, ask the cost of a license. You may have to give specific information about when you're showing the film and how often you're going to show it. MPLC offers an umbrella license, which bases fees on the size of the facility rather than the number of shows. That way you don't have to figure out showtimes in detail in advance. A typical distributor fee for a small theater might be $250 or 35 percent of ticket sales, whichever is higher.

After you've signed the license and paid your fee, the distributor or licensing firm will provide you with a copy of the film. DVD or Blu-Ray is standard – the old-school reels of film aren't used much anymore – but some films are available via streaming as well.

Source:https://smallbusiness.chron.com/obta...ter-21924.html

On which media is allowed:

Can I use DVD’s and Blu-ray videos in public spaces?

Yes, you can, but to do this legally you likely need to buy an MPLC Public Performance License which collects a small amount of money from you to pay to the content producers and Hollywood studios that made the contents of the DVD or Blu-ray that you are showing.

DVD’s and Blu-ray disks will include the text “for personal, private use only” on the packaging. When you have an MPLC Public Performance License, you can exceed that limitation as you have paid the extra amount required to show the content publicly.

MPLC Public Performance Licenses are affordable, easy to buy, and can be put in place immediately. They are the legal way to show movies and TV in a public or commercial space.

Source:https://us.mplc.com/faq/can-i-use-dv...public-spaces/

The link above is to MPLC (Motion Picture Licensing Corporation). You can get a license from them..

[Mike Blakesley]

The MPLC license will not work in a theater as proposed by the OP because you can't charge ticket prices with that license.

I'm curious, Greg, why do you want to have only one screen? Is it a space issue? You should really, really try to get to two screens. Our biggest headache right now is only having one screen. What I wouldn't give to have enough room for another screen.

However, the above only applies if you're wanting to show first-run movies on (or close to) the national break. If you're going to play second run, oldies, repertory titles, specialty films and the like, then you may not need to worry about those pesky three-week playtimes the studios keep insisting on.

[Ryan Gallagher]

Yeah where you need to land in terms of technical capability (DCI compliance etc) really depends on what your screening goals are. If you aspire to show first run films at the highest quality, then you'll be in the higher budget range.

If you just want to be a repertory/classics/community space, there are potentially cheaper options to get up and running, and you can upgrade later on. You can certainly show rep titles off blu-ray (we do all the time), but we still pay the same licensing fees as if we were getting a studio DCP essentially (minus shipping etc)... for us the blu-ray option is only for when there is no print or DCP available for a particular film. I don't know how studios feel about showing Blu-Rays when there are better options available, but it might depend on the capabilities of your space.

I believe Mike is correct in that ticketed screenings is not what the MPLC license covers. Think more along the lines of a restaurant or bar that shows movies as part of it's ambiance.
https://us.mplc.com/faq/we-do-not-ch...mance-license/

I'm not sure how a single-screen 40 seat first run cinema would even be a viable business model honestly, but I guess it really depends on the market.

[Mike Blakesley]

I don't know how studios feel about showing Blu-Rays when there are better options available, but it might depend on the capabilities of your space.

I don't think they care. Some studios will send you a DCP of their title at $$$ (actual rate depends on the studio) (plus shipping), but will license that same title off of "BluRay/DVD" for less. I don't even think they care whether it's BluRay or DVD.

[Greg Melartin]

Thank you for the responses. How do I get in touch with a Booker?

What about used equipment? Would something like this Christie get me started?

[Mike Blakesley]

You can google "Film bookers" (or "film buyers") and get a lot of possibilities. If you know of any other independent theaters in your area, check with them. Or you can contact the booker we use: Clark Film Buying (clarkfilmbuying.com) They are friendly and reasonbly priced.

It used to be that you wanted a booker located in your geographical area because they'd be familiar with your territory, but these days since film isn't being bused around from theater to theater anymore, a booker can be pretty much anywhere.

[Dave Macaulay]

That projector is what I would call series zero. They have many limitations and parts availability is essentially non-existent. Light efficiency is atrocious for one thing, and paying the power bill for a lamp 3x the size of what an S2 one needs for the same screen light isn't nice. Avoid.
The reality is that a series 2 projector is as old as should be considered: Christie CP20x0, not CP2000 anything (series one) or Barco DP2K-xxx not DPxxxx (S1 again). NEC I think the NC1600 is the only S1 I've seen. Any projector with that tilted imaging unit as pictured is well past obsolete.
You also need a DCI server. Doremi, GDC, Dolby are options but many models are no longer supported (parts and service no longer offered by the manufacturer). Really old ones like Kodak are unusable, but you're unlikely to see any.
There are DCP playback software options to use with non-DCI projectors that will play encrypted content but no major studio will provide a key to play a movie unless the entire system is DCI approved.
A series 2 projector and a SDI server is the minimum I would consider for a cinema business, there are used systems available. Following auction sites can lead you to closed cinema sales deals, but buyer beware! Unpowered systems often have failed secure media blocks from batteries dying and repairs can be impossible: those modules are $$$$ if even available. If you can't see it running assume it's dead.

[Mike Blakesley]

Talk to any reputable dealer about used equipment. There are lots of places that are upgrading, closing, downsizing or whatever so there's a good amount of used equipment out there. I get that you are trying to 'cut out the middleman' as much as possible, but this is one of those situations where you need someone going to bat for you. A good dealer can steer you away from something that is going to cost you dearly down the road. You might pay a little more up front but that's the price of admission.

[Armand Daiguillon]

Hello,
. I'm writing a buisness plan to open a small 40 seat theater in a small town.
. I've read through the forms but am still lost on a few things.
. I'm lost on how to get licensing for movies and equipment.

How do i establish connections with the studios?

Do i have to use commercial projectors and sound systems or would i be able to use a really good home system?

I hate to be a downer here ... but this does not sound like a good idea. I'm going to give you some hard truths.
Maybe as a specialty theater it could have some chance - but as a first run. Almost none.
To be blunt - you will not get serviced as a first run theater if you only have 40 seats. Your gross potential with only 40 seats will not be worth it to the film companies to even give you a print of a film.
Second if they did, the terms and rules binding you make running even two screens VERY challenging. (they will require longer runs than you will want to give or even be worth it to give)
I do not see how first run could be viable for you.
Now as a location playing only repertory films - you "might" have more luck, if the area would support it. But realize that repertory films have minimums ($250 typically along with 35% of revenue)
While better than first run it can still not be great.
While bluray options are available for a lot of repetory stuff, a lot of it also will only be provided as a dcp with keys still provided by regular places like deluxe. That will require a dci compliant projector and IMB.
To be honest this is highly risky and I would buy the cheapest working projector and sound you can get. If things seem viable you could always upgrade later.

[Ed Gordon]

https://www.thelittleprincecinema.com/

[Ryan Gallagher]

https://www.thelittleprincecinema.com/

haha yeah nice example. Though I don't think these are competing in the same space really. From what I understand (and based on the news video), this one operates as a private events space, and just happens to to be designed as a micro-cinema and offers access to a movie library. They are not selling movie tickets per say, but movie nights. You can clearly see the non DCI projector mounted to the ceiling in the footage. I doubt anyone is paying studios anything in this arrangement.

But that is a good example of there being other less traditional business models that do work surrounding a cinema like space.

[Ed Gordon]

haha yeah nice example. Though I don't think these are competing in the same space really. From what I understand (and based on the news video), this one operates as a private events space, and just happens to to be designed as a micro-cinema and offers access to a movie library. They are not selling movie tickets per say, but movie nights. You can clearly see the non DCI projector mounted to the ceiling in the footage. I doubt anyone is paying studios anything in this arrangement.

But that is a good example of there being other less traditional business models that do work surrounding a cinema like space.

Their website says they host private and public events, but don't really give details.

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I recall reading an article about a guy in New York city who bought up smaller theaters that used to show second run or porno. He did not show movies, but rented the theaters to others who made or released movies. He was not in the movie exhibition business, but rather a facility rental business.

[Ryan Gallagher]

Their website says they host private and public events, but don't really give details.

I recall reading an article about a guy in New York city who bought up smaller theaters that used to show second run or porno. He did not show movies, but rented the theaters to others who made or released movies. He was not in the movie exhibition business, but rather a facility rental business.

Yeah browsed their site a little for fun, most bookings are "private events" where you book the room. But they do have at least one film up as a special event, with public tickets available. Granted the film is from 1987. They might dabble in repertory bookings or do special public events related to a curated series.