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TOPIC: Diving Headfirst into the Theater Business

Diving Headfirst into the Theater Business 20 Jan 2010 01:41 #33169

  • Bfrance
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I didnt see an official place for introductions so the Lobby seemed as good as place as any.

I am seriously considering purchasing a local twin screen in my small town. The theater was built in 1973 so its not terribly old but could use some slight updates. The theater is located in NE Wisconsin in a city a little shy of 12,000 souls with the town on the other side of the river having slightly more than 9,000 people. The two towns are right next to each other and are considered the same community.

The competition is a 9 screen Carmike Cinema theater. They get practically all of the new releases. The current owner is tired of fighting the distribution system and losing. At the end of running the theater he switched formats to intermediate and had moderate success. But now he is selling and Im considering buying.

My thoughts are doing older, classic, and/or cult type movies during the week Monday through Thursday and playing the intermediate releases Friday, Saturday and Sunday.

Does anyone have experience doing such a format? Am I out of my mind trying to attempt this format? Ive got some ideas to get people out their homes to see movies at the movie theater, but "small town" mentality is my largest hurdle.

Im excited and scared witless at the same time. This my first business venture of any kind and would appreciate any input.
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Re:Diving Headfirst into the Theater Business 20 Jan 2010 10:58 #33170

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The first thing you should do is to sit down with a pad of paper and read every thread on this db. You will find similar topics discussed before.

A quick note to newbies: I recently just paid $150 + $45 mo. to belong to a a website called iGames.org in order to plan for an anticipated gaming center for one of my video stores. It seemed odd to have to pay to join (as this is the first time I have had to across what is now 5 businesses). It is worth it. So take advantage of this free resource. It should take you a good 40 hours so dive in!

To your specific situation: I would only agree to operate at a very low lease payment to him and on a month to month basis. This area cannot support 2 theaters by everyone's normal guidelines to how many screens a area can support. I would not buy this at all unless I had experience with this particular theater. You have the power in this as it is sitting empty. This is a buyer's market.

JMHO.
Last Edit: 20 Jan 2010 12:28 by rufusjack. Reason: mistake
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Re:Diving Headfirst into the Theater Business 20 Jan 2010 11:29 #33171

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Ive done some searching on the site but most of the information is quite old and I wasnt sure if it was still applicable.

Oh and those looking for information on the site that Rufusjack posted its igames.org.
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Re:Diving Headfirst into the Theater Business 20 Jan 2010 12:30 #33172

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Thanks for the correction.

Most info. is still very relevant. Digital and 3d is the most dynamic topic but even that is going slow.
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Re:Diving Headfirst into the Theater Business 21 Jan 2010 00:08 #33175

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I would do the intermediate run product all the time, and just do the specialty/art/revival/cult/classics as specials. Do midnight shows, early morning matinee, or just once a month specials,movie marathons, etc for the specialty product.Use your theatre for that product when you would normally not be open/operating. Make it more of an "event" for people to look forward to. Of course you will want to heavily promote the intermediate films, and their PRICING, since the current owner has just switched over. In these times, many people should welcome an affordable night out. You should be able to get a good draw of people to come to the intermediate run films, who you could bombard with advertising for your special shows.
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Re:Diving Headfirst into the Theater Business 22 Jan 2010 22:46 #33191

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RETRO FILMS DONT MAKE THE BUCKS
Last Edit: 25 Jan 2010 18:45 by slapintheface.
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Re:Diving Headfirst into the Theater Business 25 Jan 2010 13:36 #33205

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In smaller markets art-specialty-odd show times-etc. are sort of like carrying designer candies: the standards of popcorn-regular candy-soda will still be 98% of your business. It doesn't matter how exquisite those designer bon bons are: you will live and die on the 98% of your sales. I would clearly include the other stuff but to go up against a 9 screen in a small town you better have the right mix or you'll get slammed.

And many of the subjects covered here may seem old but professional theatre owner's, manager's, bookers, etc. wrote them and if they wanted to say anything diffent currently they would. Many aspects of this business have not changed at all. For the many people who come here and share their views they have no interest in repeating good advice that is apparently timeless (so far) just so it has a more current date.
Michael Hurley
Impresario
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Re:Diving Headfirst into the Theater Business 25 Jan 2010 15:04 #33208

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Based on the industry rule of thumb for screens/population, my humble opinion is that you are probably headed for a bruising if you go up against the Carmike location nearby.

I'm not sure of where you are, but the only 9-screen Carmike location in NE Wisconsin is in Marinette. I'm not sure if that location features stadium seating (my guess is that it does), but the nearby Carmike you will be going head-to-head with has digital projection with 3D capability as well. I'm not one to disqualify non-digital theaters out of the gate, but if you don't have stadium seating or 3D, you are already at a disadvantage versus that Carmike.

I know a lot of board posters here are probably ready to flog me after reading that last sentence, but the bottom line is that 3-D sells and digital allows for you to maximize your asset utilization. If your local Carmike competitor is one of the company's newer built locations (as it appears to be), my guess is that you will find it difficult to be even remotely competitive even if you are paying lower film rents on intermediate/after the break releases and able to drive an above average mix of concession sales (33%+ of total) in your top-line revenues.

Also, with respect to your idea about retro/indie flicks, keep in mind that during the Mon-Thurs period, industry data works out to the average screen in the industry doing anywhere from ~$125 to ~$200 a night. That is including mostly first-run screens as well as the remaining intermediate, etc. And remember that you will have to give something like 40% of that to the studio, so your net revenue from tickets would be ~$75-$120 per screen per night during the week.

Rufusjack is right though, if you are going to give it the old college try, the necessity of a short-term lease at as low a rate as you can squeeze out of the current owner will be the only way to lighten the load. Like many folks on many threads have said when these types of situations come up, if an existing owner is looking to exit the business, it's pretty likely that it ain't because business is booming.

Also, I would run your own numbers and think about what 'moderate success' might mean for the current owner. Is cash flowing that location to the tune of $20,000 a year enough for you to invest the time, energy and capital? I know that everyone has their own motivation for getting into (or out of) the movie business, but you need to be honest with yourself about what kind of returns you are looking for in this venture.
Last Edit: 25 Jan 2010 15:18 by BWT.
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