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TOPIC: New theater: low income but no debt

New theater: low income but no debt 06 Oct 2005 20:08 #11171

I hope you don't all hate me for posting a similar, but I think different, situation for a newbie-hopeful-theater-owner.

I have found a hidden mountain town between two disgustingly wealthy resort cities. There are an unusual percentage of teenagers with nothing to do except fish or hike in this town and I would love to shape them forever by showing them art and foreign movies. Otherwise, I believe the market for a theater in this town to be small and my ability to make a profit probably null(although I may be wrong and the city-folk may come to my theater especially since there is only one other theater 45 minutes away showing blockbusters with early weekend-only showtimes). So all in all, I know this sounds like a pipe dream. But...

I believe the financial and town-politic situation to be in my favor. I have $250,000 that I can put upfront to convert a warehouse building into a small art theater and my town will let me live above my business, so basically I can use all the money for one space instead of also looking for a home (which if I do borrow money I can borrow it as my 1st home mortgage instead of a business or the like). Additionally, this town has local-fever and will support a local business a million times to one rather than going to one of the cities.

So, what I'm asking is, do you think all the rental and liscensing fees will kill me even if I have no or very little debt from startup? And do you think a person can live off of a very small income if their expenses are equally low?

Again, I am sorry if I seem redundant. I really have read a lot of the old posts, I understand that I may have misinterpreted my situation to be different. Please be patient with my questions, I'm pretty young and naive.

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Re: New theater: low income but no debt 06 Oct 2005 22:47 #11172

  • SamCat
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I guess how successful it will be, will depend upon the population and how many the population expands to over the holidays. I talked to an independant operator in a small town and he said that he is avaeraging about 3 admissions per person per year.
There was also some research that I had on record that said that the wealthier the household the more frequently they come to the movies which is copied below.

Equivalised gross household income quintiles1


No. of cinema-goers ('000)(First Column)
Share of cinema-goers (%)(second Column Attendance rate (%)2 (Third Column)
Lowest quintile 1,191 12% 46%
Second quintile 1,496 15% 60%
Third quintile 1,823 18% 72%
Fourth quintile 2,144 21% 81%
Highest quintile2,689 27% 88%
Total 10,138 100% 70%

So the higher income people have over double the attendance rate of lower incomeearners, close to double the share per how many thousand people, and a higher attendance rate. So what it says is that cinemas that are located in a higher socio economic area should do better per person than in a lower socio economic area.
But once again it all depends on type of product, how good the cinema is- screen size, sound, service, looks, atmosphere, accessibility to parking and transport, how close it is to restaurants, etc also determines how successful the cinema will be.
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Re: New theater: low income but no debt 06 Oct 2005 23:16 #11173

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Your intentions are noble, but unless those boppers have been caught in some 1940s Norman Rockwell time warp, they'll avoid what you intend to offer as strenuously as an elective course in ancient Tibetan history... They have grown up on a diet of video games, rap music, and reality TV, and would rather "hang" in the mall in one of those wealthy neighboring towns that watch your art movies... You have a better shot at attracting their grandparents to what you want to offer, but they'll only come once a year, so it doesn't sound like a dog that'll hunt, from here... You can put that quarter mil in CDs and make more money, without all the hassle of what you're considering...
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Re: New theater: low income but no debt 07 Oct 2005 00:31 #11174

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Yes I agree with you out of frame the art and foreign movie market is extremely a hard market and virtually non existant for teenages and younger people. I would say look more at the population statistics and they normally average I beleive 1 scren for every 10-20000 people depending upon tourists influx. You might be able to get by screening some art movies occasionally unless seeing the market stick to the main movies that take the most dollars.
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Re: New theater: low income but no debt 07 Oct 2005 09:38 #11175

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If I understand this correctly, Cherrycheeks, you are looking at a small town between two cities. The nearest and "only one other theater" is 45 minutes away with weekend only shows. It sounds to me as if at least one of those two "disgustingly wealthy resort cities" doesn't have a theater. Is this correct? Wouldn't it make more sense to look at opening one there?

I guess this wouldn't allow you to focus on shaping the youth with art films, but it might be a more practical place to look if you really want to open a theater. You might have to show those blockbuster type films most of the time to make it, but you could think of them as the means to an end. The blockbusters would enable you to keep a theater running so you would have the opportunity to show art films on occasion.

Just a thought.
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Re: New theater: low income but no debt 07 Oct 2005 09:44 #11176

  • D. Bird
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Small-town folk like mainstream movies and popcorn. 2 or 3 small auditoriums, you'll have the luxury of playing a little off the break for lower rentals. Sounds great if you can call it your home and economize that way, but listen to the experts here. I've lived in (very) small towns all my life. "Artsy" or "Alternative" just doesn't sell. With an extra aud, you could do a couple festival weeks every year, bring in the art that has had good buzz and do okay and still keep the teens amused with the popcorn flicks. Hard to be avant garde in a small town, you need to wait until it's proven elsewhere before people will come....
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Re: New theater: low income but no debt 07 Oct 2005 22:00 #11177

Thank you all for your input. First, I'll answer some questions. The population of the town is 850. Outafame, there is no cable TV available in this town and internet is strictly dial-up, although some folks have satelite dishes on their houses, in general I think people might really be cut-off from a lot of the modern influences. Also, there are no malls in the cities just ski resorts, hot springs, cutesy theme shops and bars. I guess I'm just so convinced that this town could be a prime location. I hope I don't seem snide.

Samcat, The average income is $40,000 and most people work in construction, mining, forestry or in the beef cattle industry. The population doubles in the nearby cities in the summer and winter, but most people don't know this town exists because its not on a main thoroughfaire and it borders the Nat'l Forest. The parking is plenty for the small size theater I want to start and the building is catty-corner to the main street in town. But again, I don't think many people know about this town except for locals and people from surrounding ranches.

In response to lionheart, you were right in thinking that one resort city doesn't have a theater, but a commercial building in one of these cities starts at a million dollars. I can start a business in my town between $200,000- $300,000. Plus, I'm not so sure I would want to live in a town where I don't at all fit in.

Let's say I abandon the idea of showing strictly art & foreign movies, and showed them at a film festival or only occassionally. Do you think I could survive on income from 25 people per week or it would cost me too much to rent movies and pay the liscensing and commercial insurance? If I'm not paying off debt for the actual building, can running a theater with just myself as an employee be a no-loss business?

P.S. I ask you all because my parents passed away. So I really appreciate your insight.

P.P.S. I lent about 15 German movies to the liquor store/ dvd rental place and they have been renting them out regularly. The owner said she thinks its because everyone has seen all her other movies. I think it means there might be an interest in a movie theater in this town.
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Re: New theater: low income but no debt 08 Oct 2005 02:31 #11178

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OK, you're considering opening a "Mom & Pop" theater in a town of 850, essentially blue collar folks... My best guess is that you'll need to AVERAGE 300 admissions MINIMUM per week to cover the house nut, assuming you're paying film rentals averaging 40%, or less... The only way you're gonna be able to buy films at that cost is by playing early second run (before it goes to DVD) and draw some business from the surrounding area farms?, country living fans?, whatever, AND charge VERY REASONABLE admission prices ($3-$3.50) to keep the VOLUME of sales at MAXIMUM, AND play whatever films are available that are of interest to "common folks."... I'm not talking about teenie bopper pictures, but something with general appeal... This had not been a good year for that type of picture, but during the last month a TON have shown up, all at the same time... As for genuine Art Films and Foreign Films, unless there is a high percentage of locals with a common ethnic background, I believe you have NO audience for such pictures, no matter what the video store is renting!... Burney Falls recently opened a second location in a tiny town, and Leeler is in a town of about 1,700, and also lives in his theater building... Email them and ask what they think about your situation...



[This message has been edited by outaframe (edited October 08, 2005).]
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Re: New theater: low income but no debt 10 Oct 2005 14:07 #11179

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If your mission is to show art films and change kids: I suggest the local library and use dvd/vid projector or TV. If your mission is to make a living/ act carefully and step even more so. Lots of people have lost their shirt doing as you imagine. It's like walking into a casino: don't lose more than you can afford to or want to. I think your idea is noble but light in the reality department. You might end up showing kids how not to go into a business that eats you alive.

Michael Hurley
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Re: New theater: low income but no debt 10 Oct 2005 18:00 #11180

Ha Ha. Thanks for the advice. I just thought that maybe it wouldn't be such a gamble if I could completely own the building and it would also be my home. But I guess I could come up with a different idea of how to scrape by with a business in this town.. maybe a teen dance club. Thanks again everyone for your generosity with info.
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Re: New theater: low income but no debt 27 Oct 2005 12:31 #11181

Also, don't forget that only about 35% of your gross will come from the concession stand, and you'll be depending on that to survive.

A percap of $3.00 would also be unlikely for such a small theatre.
Since 1987
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