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TOPIC: Lots of competition but no 2nd run.

Lots of competition but no 2nd run. 09 May 2005 14:45 #10285

  • guthriemm
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Hey guys,

I've been reading my brains out the last 48-72 hours on re-opening a theatre. I've gathered a lot of mixed comments, and I'm curious about a somewhat unique situation, if I have a chance of surviving. Here's my situtation.

I'd like to re-open a six screen theatre in a town of about 100,000+. It's a growing small city in Texas, with a big university in town(near the theatre). A large amount of lower middle class, lower class, and hispanic population. There are already two multiplexes in town, 14 screens, showing all first runs. There's also a four screen in town showing first runs. I'd like to be the first 2nd run in town, with ticket prices around $3 to $4. I'm very near the university, and on the opposite side of town from the competition. What, in your opinions, are my chances of succeeding in this venture? I don't plan on quitting my job, I'd just like to put passion into something, and own my own business.
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Re: Lots of competition but no 2nd run. 09 May 2005 15:10 #10286

  • leeler
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guthriemm,

welcome to the site. Boy, did you ask a loaded question or what? I think in your reading you might have seen the "rule of thumb" for screens versus population at around 10K people per screen. Therefore, if you have around 100K people and 14 screens currently operating then, you might be asking for trouble.

But, let's set that aside for the moment. Don't think, for a minute, that you can run a six-screen yourself and keep your job. I run a single screen myself and I work harder now then I ever did previously. IF, you had an experienced manager and staff, and you just oversaw things then, maybe you could pull something like what you're proposing off, but don't kid yourself, you will be one busy guy.

I currently show what I think you're talking about when you say "second-run". It is still, technically, first run but you would just get film later then the other guys. I currently get film in the four to ten week old category and, I think, people in my area seem to be patient enough to wait for me to get the movie (in MOST cases, that is). I'm not sure how well that would go over for you but it is probably worth some thought. What you also might consider is running what they call an "art-house", which is running films that are in more limited release and are a little different then the mainstream product that the big chains are playing. There are several people on the board who run that kind of movie-house. That way, you don't have to worry about running head-to-head with the multiplexes for film.

In any case, good luck with your project and keep reading.
"What a crazy business"
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Re: Lots of competition but no 2nd run. 09 May 2005 15:41 #10287

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Well, I may be in a lot of trouble for the rule of thumb of 10K per screen. There are two 14 screen theatres in town and a 4 screen. All first run, but 32 screens.

I'm trying to leverage the idea that a cheaper theatre(2nd run) would sell tickets near a college, and maybe even run spanish films on one of the screens at all times, having a large hispanic population. Another benefit comes from small towns. There are no major cities within 100 miles, and a lot of small towns come to this small city for entertainment.

Am I still barking up the wrong tree?
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Re: Lots of competition but no 2nd run. 09 May 2005 15:49 #10288

  • outaframe
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All the other considerations aside, the first question that comes to mind is where you'll find enough second run product to keep 6 screens filled with pictures that still have legs... Most films today are hard pressed to still draw after the second week in first run release, and you're looking at a situation which will require 150-300 pictures per year which still have an audience after 4 to 6 weeks of previous exposure in your area... Sure, some will wait for the less expensive second run, and with a single or twin screen you can usually keep something with potential on screen, but keeping 6 screens filled with viable product is going to be a big problem...

LEE's comments are right on target, and you'd be multiplying what he told you, times 6...
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Re: Lots of competition but no 2nd run. 09 May 2005 16:18 #10289

  • Large
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2nd run is going out of style. Also the old 10K people per screen rule is what the majors rely on. I have found that 2.5K per screen seems to be the minimum for independants. Being the closest theatre to the school could have it's advantages. I might try a mix of 2nd run and Art to find out what performs the best and go with that. Whatever you decide, it can't be down scale. It must be well run, clean, neat and well presented.

There is a reason that subrun is dying. The studios are releasing more prints to more screens so people see the films faster. Then with more screens the theatres can hold the prints until they have wrung them dry of revenue. By then the video release is moments away.

Art however is an expanding, and underserved market. But it takes a different mindset to run Art. You must constantly juggle the mix of product to try to find the mix that people want to see. This is why the majors don't do Art very well, they are programed to show what Hollywood offers, not what the local public might like to see. Art takes a dedicated local connection. 6-screens and 100K population is about the right mix for Art. Remember that you have to make your mark fast, utherwise the majors will try to stomp on you.
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Re: Lots of competition but no 2nd run. 09 May 2005 16:19 #10290

  • Mike Spaeth
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Sounds like a viable situation - however DO NOT do the mid-run crap ... wait the extra week or two and sell your tickets for $1.00. This is a very viable way to run a theater ... the word of mouth will build ... but you need to plan for a year in the red first. If you need any further assistance, feel free to email me.
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Re: Lots of competition but no 2nd run. 09 May 2005 17:46 #10291

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The reason I had wanted to avoid the dicount theatre, was due to the lease on the building. The lease is in the area of $12k a month. Now I'm guessing each screen may average seating of 150. Running those numbers on selling 10%, and getting $1.00 per cap concessions, doesn't fit the rule of thumb for 15% spending on rent.

In fact it may fall way short. With a discount theatre, what are the rules on how many times you show each screen every day?

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Re: Lots of competition but no 2nd run. 09 May 2005 19:01 #10292

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TYLER TEXAS/
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Re: Lots of competition but no 2nd run. 09 May 2005 19:03 #10293

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THEATER HAS BEEN EMPTY 5 YEARS
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Re: Lots of competition but no 2nd run. 09 May 2005 22:35 #10294

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Sooo you're telling me there's a chance!

Why has it been closed so long? And I've actually heard only about 3 years.
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Re: Lots of competition but no 2nd run. 09 May 2005 23:59 #10295

  • Mike Spaeth
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A 6-screen discount house in the right market could do as many as 450,000 admissions/year.
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Re: Lots of competition but no 2nd run. 10 May 2005 00:30 #10296

  • Big Guy
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Not to sound too negative, but...

450,000 people is about 8500 people per week. I work at an 8 screen first run, and we don't always hit those kind of numbers. Our town is about 100,000, and we have a college campus located here. Actually, the towns sound very similar, with a large lower class population and a large hispanic population.

I just have a hard time seeing how anyone can expect the equivelant of 4 1/2 times your population coming to late-run movies in one year.

We surpass that number per week most of the time, but we are running films on their national release date.

[This message has been edited by Big Guy (edited May 10, 2005).]
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Re: Lots of competition but no 2nd run. 10 May 2005 08:11 #10297

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Have you seen the location ..its in the middle of no were
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Re: Lots of competition but no 2nd run. 10 May 2005 09:47 #10298

  • Mike Spaeth
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I said "as many as" ... I've seen 8-screen discount houses that do in excess of 1 million admissions per year.
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Re: Lots of competition but no 2nd run. 10 May 2005 10:07 #10299

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This town has 86,000.oo people with a 12,000.00 month rent .....Run the other way as fast as you can ...with 32 1st run screens.
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