Friday, March 25, 2005

Let's get some things straight

Cinema owners worry about ticket prices, too
go to original article ... or email me for article text

Now that I'm totally (and quite loudly) behind the idea that my future and fortune will all be had in the multiplex arena, things have become much simpler in my understanding of life. It now makes sense why I love articles like the one above (which I recommend). It basically says all the things we already know about the movie business, it's hard, concessions are everything, the distributors take all the money, and they're impossible to work with, yada yada. The thing I like about stories like these is that it separates the decision makers from the decisions that they inevitably have to make. The theater owners are people that are sympathetic with their patrons and do what they can.
"I call it the lousy-in-the-lobby experience," says Joseph Chabot, of Moore Theatres, a small chain of 19 screens in four locales outside of Kalamazoo, Mich. "People who've just come from the local fast-food restaurant know what soda costs," he says, "and they don't like paying two or three times as much just to carry it into the theater with them." Mr. Chabot and his partner, owner and president Carol Moore, say they have taken these concerns seriously and come up with a solution - self-service concession stands.

"We let people get their own drinks and popcorn and they love it," he says. "It saves them money and still allows us to make a profit." Chabot says they've seen audience numbers increase since they instituted the new service."
Which is a.) awesome, b.) genius, c.) humanitarian, d.) awesome.

And while we're on the topic of awesome, I occasionally try to strategically plant my principle ideas about running a movie theater in my posts here. But since we're at a crossroads here, taking what may be a highly criticized path to multiplexes over the little guys, I think it might help my position to lay out the things I stand for, and what I mean when I say I want to swim in screens. And let's start right out with the big 2:

1.) Cheap (if not free concessions)
2.) Deals with Distributors that make sense

There's nothing that bothers me more about this industry than the fact that it's widely acknowledged that one does not profit from actually _showing movies_. It's all so backwards. At one point when it was hard to get films places and distributors had real problems getting films on screens, the 90% of profits thing made a lot of sense. And since people were spilling out the doors, it just happened that you could survive with selling food on the side. But concessions are a _workaround_. As in absolutely not the primary business of a movie theater. How can one ever provide a satisfactory service to people when the primary business they are running is catering to a totally different service? How can a workaround be adopted as an industry wide standard and have everyone be ok with it?

I mean I understand why, but seriously, it can only lead to bad things. On so many levels. I have a number of philosophical problems with this whole approach, and the main one is that it doesn't address the problem at it's source. People can't afford to run movie theaters because the distribution deals are prohibitive. On top of that the studios use their infinite negotiation power to keep it that way in spite of its senselessness. Which just plain sucks.

But isn't that the point of having an association of theater owners? Why hasn't NATO used the unionized force to fight for this? And with studios so stupidly obsessing about piracy that doesn't even affect their sales, why don't the theater owners use this as leverage. Right now, the distributors want to roll out lame cash rewards for staff that identify camcorders in the audience. Why doesn't NATO negotiate a more reasonable distribution profit sharing deal for people who can ensure piracy won't occur. Ironically, this is probably because the studios would take a bigger hit from this than they ever would from Piracy, but at least they'd take care of their biggest public facing issue.

I could go on and on. I'm already pretty raving mad just thinking about it. :) But for the record, my idea of multiplex first and foremost includes both of these ideas for the public that utilizes them (which should pan out in either lower ticket prices or a more worthwhile experience). But the fat needs to get cut out. Across the entire industry.


At 11:28 AM, Blogger Rorschach said...

Informative and coherent as always. Love the self-service idea by the way. That's some good creative thinking.

Tex asked how you were doing, so I told him you were still with the same girl and had the same job. Then we bashed the Lakers. Just kidding. But we were watching the Spurs beat Seattle so that was fun.

At 8:45 PM, Anonymous Lisa said...

I'm in the process of trying to pull together a business plan for a tri-plex in Oregon. I found your posts pretty enlightening, and was wondering if you happened to know of any source for finding out "vital statistics" of an existing theater -- how many it seats, what kind of projection equipment it has, etc. Thanks! --Lisa

At 8:16 PM, Blogger Kobe said...

Hi Lisa,

Thanks for the note. i love hearing from kindred spirits and hope you keep reading the blog.

The most comprehensive source (that I've personally read) is the Moxie blog I link to on the sidebar ( I can't stress enough what and amazing job Dan Chilton does of chronicling the entire process he's going through to bring his theater to life. He has plenty of vital statistics in the many posts on the blog, but if you want a shortcut to specifics, I'm sure you could just email him and ask. He's also posted a comrehensive budget of purchases he's making which reads like a how-to.

I'd actually really like to see the balace sheets and any other numbers associated with big multiplexes myself, since my leanings are to be numerically analytical, but I don't currently know where to find this stuff myself. If you happen to find a good resource, please let me know :)

There are a few other resources that I've always wanted to chek out as well. One is the nato publication "The Encyclopedia of Exhbition" This is available on their website ( for a C note, which is a little too much for me to cough up before I've even seen the book. I attended the nato (national association of theater owners) convention, SHOWest, last year and disappointingly, they didn't have on there. I think this should have some great zeitgeist type views of the industry if not specifics for individual theaters or chains.

There is also the website which they rave about on the moxieblog. I think there are some very accessible forums to query and converse in.

Those are all my ideas. I'd love to hear what you find out!


At 8:46 PM, Blogger blogger said...

Great 'blog, Ben, and I find myself in a similar situation in Denver - building the next great cinema, for the 8th largest movie theatre market in the U.S.

HERE'S MY STICKING POINT: Does it matter where we build the concession stand? In other words, how do our per-caps fare if concessions are sold BEFORE ticket-taking vs. being sold AFTER ticket-taking. It seems silly, but it's becoming a point of contention...


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