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TOPIC: After 10 years Megaplexes changing the movie industry

After 10 years Megaplexes changing the movie industry 21 May 2005 21:20 #10309

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This is an artilce I came across in USA Today that I found very interesting enjoy!

After 10 years, megaplexes still changing movie industry

By David Twiddy, The Associated Press
OLATHE, Kan. — It's a Saturday night in suburban Kansas City and Wayne Sutter and his family are waiting outside the AMC Studio 30 megaplex to go see XXX: State of the Union.

Dallas' AMC Grand 24, the first megaplex, revolutionized the U.S. theater industry a decade ago.
By Ron Heflin, AP

The giant theater — its spotlit facade can be seen on the highway a half-mile away — anchors a surrounding shopping center, attracting people from across the metro area with virtually every major commercial film currently playing, many on multiple screens.

"It's nice to come here and have all the variety in one place," Sutter said.

His wife, Bridgette, added that they don't really have a choice.

"More than anything, that's all that's around where I live, the big theaters," she said.

While it seems gigantic movie theaters have been with us forever, the megaplex, defined as having 14 or more screens and modern amenities like stadium-style seating, turns 10 years old this week.

AMC Entertainment Inc. opened the first, the Grand 24 in Dallas, on May 19, 1995, ushering in a new concept that revolutionized the U.S. theater industry and used its scale to change how movies are shown, distributed and marketed to the public.

Peter Brown, chief executive officer of Kansas City-based AMC, said the idea was to match the successful Big Box stores sprouting across suburbia, selling one-stop shopping for everything from Home Depot hammers to Best Buy car stereos.

"It might make some sense to think of the movie theater as a superstore of entertainment," said Brown, whose company now operates 229 theaters, 77% of which are megaplexes. "It was not just bigger, it was better. It was a better mousetrap."

The improved viewing experience and the ability to let consumers watch whatever movie they wanted almost whenever they wanted brought more people through the door and bulked up Hollywood's grosses. Over the last 10 years, ticket sales have grown 19% to 1.53 billion last year and annual box office receipts have blossomed 76% to $9.53 billion, according to the National Association of Theater Owners.

"It certainly pushed the experience much faster in regards to grossing potential," said Rory Bruer, president of domestic distribution for Sony Pictures.

Anthony DiClemente, an entertainment analyst for Lehman Brothers, said the key was giving theater owners a huge number of slots to show movies.

"What was wrong with the multiplexes was you still had a situation, even with six or eight screens, where you couldn't show movies on more than one screen," DiClemente said. "That meant that on Friday and Saturday nights, you were still having sold-out shows. That was the impetus behind the megaplex: to satisfy demand at its peak."

But while the megaplex has pleased movie studios and provided better seating, sound and picture for moviegoers, it hasn't always been good to the theater industry that spawned it.

After the Grand 24 opened, most major theater chains raced to build their own megaplexes or retrofit older theaters with stadium seating. The construction costs were huge and most of the industry's main players filed for bankruptcy in the late 1990s, leading to widespread consolidation.

"With the stadium seating, (audiences) were willing to go 10 miles because they liked the seating better," said theater analyst Dennis McAlpine of McAlpine Associates. "As a result, the theater chains ended up with a bunch of theaters that they needed to get rid of, the landlords wouldn't let them out of their leases and so they went into bankruptcy to get out of those leases."

There still are concerns in the industry that the number of screens in the country, while below the 1999 peak of 37,131, is still too high, especially as ticket-buying has apparently reached a plateau.

"Our last years have been very strong when it comes to admission," said John Fithian, president of the National Association of Theater Owners in Washington. "However, there is a limit to capacity."

DiClemente said he can't say if megaplexes helped the financial health of the theater chains because it's unknown what the industry would have looked like if megaplexes hadn't developed.

"But I can't tell you that the box office industry is looking very healthy," he said.

Among the problems is that the megaplexes' greatest strength — the ability to attract large crowds — is burning through the interest for those films quicker and leading studios to pull them from circulation faster. That cuts into theater revenues.

In addition, movies are coming out on DVD an average of four and a half months after hitting the screen, a full two months earlier than in 1994 and almost a month earlier than just two years ago. That means people who miss a movie's opening weeks have more incentive to wait to see it at home.

Some theater chains have largely avoided megaplexes. Columbus, Ga.-based Carmike Cinemas Inc., the nation's fourth-largest chain, counts only 35 megaplexes among its 282 theaters.

"Our philosophy and mission is to be in markets of 100,000 and less, so that precludes us from building megaplexes because the markets don't demand that," said company spokeswoman Judy Russell.

Besides small towns, the megaplex has also failed to serve the market for independent and foreign films. Other than the occasional surprise hits, such as 2000's Crouching Tiger, Hidden Dragon and last year's Sideways, industry experts say the limited audiences don't fit in the megaplex's economics.

But the art houses have reflected some of the advancements of the megaplex because patrons demand them.

"We're not showing Star Wars so we don't need a state-of-the-art 1,000-seat theater, but we do need a state-of-the-art 300-seat theater," said Ray Price, vice president of marketing for Landmark Theaters, which operates 209 screens in 22 markets. "You build different theaters for different goals."

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Re: After 10 years Megaplexes changing the movie industry 21 May 2005 21:48 #10310

YOU know i live in KC and i have been to every AMC theater in this town. I also use to work for them which was not the best theater job i ever had. But the AMC 29 they are talking about in olathe is huge it used to be 30 screens and they took the screen and seating out of one to turn it into a restraunt but they didnt ever do it for whatever reason. But the place is huge and sometimes to huge i know when i worked there sometimes some screens had 3 or 4 tickets sold on a sunday night or a weeknight or first showing of a day. So i can see why they are saying that sometimes ticket sales can decline with the huge megaplexes. There were times they would cancel a show because no tickets or very few tickets were sold for the show. They have alone here in KC three 24 plexes a 29 plex, an 18 plex in a mall one of first AMC multiplexs , 6 plex. ITs really to much i think. BUt i have to also say i have a friend who is asst manager at a theater company in wichita,ks the Warren Theaters. They started back in 94 with there first theater with at least a dozzen other theater companies in town and now Warren owns every theater in town expect one owned by dickinson a 18 plex last time i was back that way. But his theaters if you have never been are different then any other i have ever seen. He has the palaces a 50s 60s looking theater with neon lights and 50s music that play 2nd runs and then his 3 warren theaters. HE has velvlor curtins over the screens. All THX sound one theater has a balcony all the others are stadium or rise seating. THe outsides are made of marble and the inside is just wow. GO to http://www.warrentheaters.com and they have some pictures there. He believes very much in showmanship and everything being perfect i have never been to a show there that was less then fabilious. When you go inside its as though you steped back to the 30s. BUt my point is this. NOt all theater chains are hurting. HE is growing more every year and is always expanding when others are hurting. Ok i admit he does have every theater but 1 in town but still dickinson use to be the show place the place to go but more and more people seem to go to the warren. IF every theater did even half of what he does i think they wouldnt hurt so much on attendence. PLus they do overbuild there are way to many multiplexs here in KC and when they dont show good movies or thier theaters are dirty i can see why people will wait to go. I will drive 3 hours to wichita to see a movie at the warren because the experience is so much better and of course a 85 ft wide and 60 some ft tall screen makes for a very nice presentation as well. Just my openion but i think warren has the right idea
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