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TOPIC: Advice on Single Screen Opportunity in Small Town

Advice on Single Screen Opportunity in Small Town 15 Jan 2011 21:47 #35134

  • Rodgers12
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Hey, I am new to the site and would like opinions on an opportunity to get into the theater business. Scenario- small town (pop 1600)movie theater closed recently, was closed before, but run for 5 years for at best a break even. Former owner run 3 showings on Fri-Sunday at this single screen theater. It is located downtown and I am contemplating starting it back up again after it being closed going on 3 months now. Local EDA looks to be taking the property and equipment back and will probably sell it for between 15-20K. I think this at face value is relatively cheap to get into the business and would likely need operating cash as well to get going. I had heard - reliable source that the business had operating expenses between 35-40K per year. The closest theater is 35 miles away and has 6 screens, but I do think if ticket prices were lower than this place - people would continue to patronize this theater.

I am wondering what everyone thinks of this - specifically if this is a fair business opportunity - I don't expect to make millions, but if this would cash flow. Also, what sort of business model advice would you give. I think we can fun this as a family owned with no additional employees. Does 3 showings on the weekend of the same movie make sense? Can you get 2 movies and change them out easily on a 35mm? What ticket prices make sense? I have heard there is a minimum ticket price, but what is it and do you need to charge both adult and kids different rate, or can you charge just one rate? Family movies always did well here, but population has many elderly so I don't know if it makes sense to get movies that would attact different age groups or stick with family. 1st run is a risk here, but it seems that more people show up for 1st run, but I know you pay in more. How does that work as well? Many questions... lots to learn, but the main question is what do you think of this opporunity and how would you make it succeed? Thanks very much!!
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Re: Advice on Single Screen Opportunity in Small Town 15 Jan 2011 23:49 #35135

  • leeler
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this is almost word for word the situation I have in my theater. you will NOT get rich but it can work and it is lots more work then I ever thought possible. Read as much of this forum as you can and that will answer many of your questions
"What a crazy business"
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Re: Advice on Single Screen Opportunity in Small Town 16 Jan 2011 08:12 #35138

  • revrobor
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Hey Rodgers:

You sound as though you have absolutely no experience. At the very least you need to talk to someone with experience. I owned and managed single screen theatres for more than 25 years. PM or email me and I will give you my phone number so we may talk.

Bob Allen
Bob Allen
The Old Showman
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Re: Advice on Single Screen Opportunity in Small Town 16 Jan 2011 14:32 #35139

  • rufusjack
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The sweet spot for single screens is very small. (maybe like 5%) I like the distance to your next closest competitor but I do not like the size of the town. The price to buy the property and equipment is too cheap (do you have that amount right? Definition of property right? What shape is the building? What your plans for digital?

Why did the preivouis operator close up? Even if they knew nothing when they started they should of had a good working knowledge after 5 years. something made them decide after 5 years it was worth closing down. Trust me the last thing any operator wants to do is close down.

If you have no experience, you need to spend a week or two at another single screen to see what it is like.

This is one of the toughest businesses to succeed in.
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Re: Advice on Single Screen Opportunity in Small Town 17 Jan 2011 00:04 #35140

  • leeler
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FWIW, my town is smaller. We are a similar distance from our six screen.....
"What a crazy business"
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Re: Advice on Single Screen Opportunity in Small Town 17 Jan 2011 01:25 #35141

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2 significant non-normal cash flows for you Leeler are the fact you live above your theatre (saving rent/mortgage) and that you have a video store their as well. Don't be modest Leeler, you have done a great job and have beaten significant odds.
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Re: Advice on Single Screen Opportunity in Small Town 17 Jan 2011 03:07 #35143

  • Rodgers12
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I believe the theater he shut down due in part to personal reasons. I, myself, brought my family to this theater just about every weekend there was a family film... chipmunks, shreks, megamind, alice in wonderland, tranformers, iron man... etc, etc. These weekends were always a good turn out and I would count how many people came. Depending on what night we went, there was between 50-100.

I know there is quite a line up coming out this year, just not sure about how the booking line up works. Previous owner did get movies in that I would say were not right for this area... Sex in City, Righteous Kill, Salt, etc, etc... so I would hope you didn't have to accept certain films to get others.

The price of the business is correct - 15-20K. This is because the EDA has the note on the building, will take it back and really wants to get it back open. I would, of course, like to take a walk through of the property once it is in their hands. Many folks are getting cabin fever with nothing to do since it closed this winter. There really isn't much for kids to do besides go to the pool in the summer, which leaves the theater in the winter, and now thats closed. I am just asking if this seems like it would work - and in what fashion. I would probably be happy making 5% and knowing the community benefits and has an entertainment outlet. I definitely would not quit my day job. Thanks for the feedback!
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Re: Advice on Single Screen Opportunity in Small Town 17 Jan 2011 04:17 #35144

  • jacker5
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Will you be leasing? How much a month will that Be?
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Re: Advice on Single Screen Opportunity in Small Town 17 Jan 2011 13:33 #35145

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The 5% I allude to is the chance of it being successful in returning a decent return. So for every 20 single screens that are currently closed only 1 has a chance to succeed as a business. Now as a hobby that is something entirely different as hobbies cost money. This is why you see so many single screens in small towns owned by community groups.

So please define property included in the 15-20,000? Don't forget about digital. I say that will be a must in 3 years.

Have you spoken to the previous operator? Sounds like a must thing to do.
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Re: Advice on Single Screen Opportunity in Small Town 17 Jan 2011 23:07 #35146

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IMO most single screens that fail fail because they are not tailored to their community. You need to learn what your demographics are and do your screen programming to that. It will not succeed if you attempt to copy what someone else is doing (especially the multiplexes). Be different. There are many films out there that never play the multiplexes. Try inspirational, classic, foreign and independent as well as an occasional strong move over. Give your customers a greater concessions offering and lower prices all around plus a top notch screen presentation.

Bob
Bob Allen
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Re: Advice on Single Screen Opportunity in Small Town 18 Jan 2011 01:22 #35147

I opperate a single screen theatre in Oak Grove, La. pop approx 2,500 in town, 12,000 in the parish, nearest 4-plex is 30 miles, megaplex 60 miles. We have been back in opperation for about three years now and have been very successful since we have been back. However after looking at your figures you seem way off on operating cost. I would love to discuss this with you further so send me a pm and I will get you my email and contact info.

This is a fun business to get into, especially if you love your town and the historic buildings in downtown.

I would also suggest attending the Tri-State Theatre Convention in April at the Gold Strike in Tunica Miss.
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Re: Advice on Single Screen Opportunity in Small Town 21 Jan 2011 01:55 #35167

  • BusyBee
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Rodgers,

Just from reading these boards all the time (but rarely commenting) I would say the person here you should talk to is Leeler. We operate in a small and very conservative town, not as small as yours, and playing religious movies and classics does nothing for us, unless it is for a very specific special event. Even then, it takes a lot of effort to get in a small but reasonable crowd. Your regular programming should be what is on the mainstream market currently. Where you only have one screen, you will be able to be choosy and can choose the one film on the market each week that suits your community. That's just my two cents.

BusyBee
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Re: Advice on Single Screen Opportunity in Small Town 21 Jan 2011 02:29 #35168

  • revrobor
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Hi BusyBee:

How do you promote the inspirational and classic films?
Bob Allen
The Old Showman
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Re: Advice on Single Screen Opportunity in Small Town 21 Jan 2011 21:08 #35170

  • leeler
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Thanks for the recommendation, Busybee. Not to toot our own horn too loudly but we are the highest grossing single screen theater in the state. This from a town of less than fifteen hundred people in a county with no stop lights.... Of course, this is like being the thinnest kid at fat camp to a certain extent. We're certainly not breaking the bank over here....

In any case, we rarely have luck with classics or inspirational stuff unless there is loud buzz associated with it and/or there is a local tie-in. We do radio ads, about eight local newspaper ads, our marquee, our website, our facebook page, our e-mail newsletter, and tent cards at the local restaurants in town. Sometimes they work, but not often and I sure don't want to bank on them.

We just try to get the hottest movie we can as early as we can get it. Being digital has certainly helped in that regard and I would think long and hard about your digital upgrade path. Good luck!
"What a crazy business"
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Re: Advice on Single Screen Opportunity in Small Town 22 Jan 2011 00:07 #35172

  • BusyBee
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Well, for Fireproof, we advertised using our usual venues (website, movie line, posters, newspapers) but we also worked with the local churches and let the church pastors sell advance tickets to their congregations. We programmed this film in with our usual fare and grossed about the same as we would any other mainstream movie. We had average ticket sales. The churches did show up, we had a busy Sunday afternoon, but nobody came in the rest of the week. People who are not super religious wouldn't touch that film with a ten foot pole. My mom is pretty religious, but even she didn't feel like being preached at about marriage.

We also do special event type of movies with local service clubs where they show classic films and pay the rental on the film and we both promote the heck out of it and then they keep the profits. We use all of our typical advertising plus they invest in their own advertising (including radio) and they go out on foot to sell tickets. This is hit or miss. Some years we have had a decent crowd, but the last few times we did it, it was more trouble than it was worth and these clubs have elected not to do it any longer.

Every time we do these events, I always get so excited thinking everyone else is going to be excited to see some awesome old movie on the big screen, and everyone says they are excited to come see it, then nobody shows. Then I get people in here suggesting we "really ought to show classics..." :angry:

In some demographics, perhaps these things could work. It would also help if DISNEY would allow us to show their classic prints. I think people would pay money for that. There are a lot of Disney fanatics in our community.

Leeler, do you keep a blog? You should. Your theater sounds like a lot of fun!
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