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TOPIC: Multi-purpose Theatre

Multi-purpose Theatre 10 May 2012 05:05 #38426

  • howlie
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Hey all!

First of all I'm excited to be a member of this forum and looking forward to hopefully joining the ranks of independent cinema owners. I'd like to thank all of you for taking the time to share your experiences, opinions, and facts to all of us looking for answers.

I'm an entrepreneur looking to get into the independent cinema industry. I'm looking to purchase a 2 screen theatre in the suburbs of Boise, ID. Here are a few specs on the area:

City: Caldwell, ID & Nampa, ID

Population: 129,000

Location Demographics: Suburban area surrounded by farming communities. There are two colleges, five high schools, nine middle schools, and dozens of elementary schools within a few miles of the theatre location and several of them are within a few blocks. That's not counting several smaller private schools in the area as well.

Site Location: Small, newly developed business park located at intersection of the main roads feeding community. Park is immediately surrounded by dozens of subdivisions and schools. To put it simply, everyone who lives in this area drives by this business park everyday.

Local Theatres: 1 Fourteen screen theatre, 1 One screen dollar theatre, 1 One screen dinner & movie theatre. All five miles from my desired location in Caldwell.

The theatre I'm looking to purchase was abandoned in 2008 while in the midst of construction due to financing problems (surprise, surprise). It's about 75% complete. The structure is complete but basically in a shell state as far as the interior goes. It's bank-owned and the asking price is $275,000. My realtor thinks I could get it for $200,000 seeing as it's a distressed property. We'll see though… The theatre is one of five buildings in a new business park in a newly developing area.

My dream is to build a movie theatre that brings back the big screen cinema experience of previously released films, especially great movies before this new age of cinema mediocrity (I think we all know what I'm talking about.) However I want to also make it a multi-purpose facility where I can put on video gaming tournaments, music productions, and educational/business seminars.

From research that I've had collected throughout the area I'm confident that this sort of facility would be popular. I think if I especially took the video game side of the plan seriously I could make a lot of money. I'm assuming that I need to go all digital in my media hardware to accomplish what I'm looking to do.

My questions are first of all from other's expert opinions does this sound like a profitable business plan? Second, is there a theatre design I should be aiming for? Third, is there equipment that can deliver big screen quality from DVD (or whatever media would best serve my purposes) while also allowing me to hook up video game consoles without having to setup a completely separate system? Fourth, is it also a possibility to compete as a 2nd run theatre inside the demographics I've given?

I continue to research the archives on this website for information but so far I'm not having too much luck in answering questions to my unique situation. Maybe my dream is too big or too unconventional. Like I said, I'm an entrepreneur so blazing new trails is what I like to do. I would appreciate any feedback any of you might have!

- Jordon
Last Edit: 10 May 2012 13:06 by howlie.
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Re: Multi-purpose Theatre 10 May 2012 05:31 #38427

  • revrobor
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What you need to do is be different from the other theatres in the area and it sounds like you may have that in mind. Some may tell you to purchase digital equipment now at $50,000+ per screen. If you don't have that kind of money I personally believe you can get by with used, rebuilt, 35mm equipment for a couple of years. If I had the bucks I'd take the chance. Good luck.
Bob Allen
The Old Showman
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Re: Multi-purpose Theatre 10 May 2012 13:12 #38431

  • rufusjack
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Is this the place?
Attachments:
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Re: Multi-purpose Theatre 10 May 2012 16:34 #38433

  • howlie
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Yes sir, it is. Please don't tell me your looking to buy it as well...
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Re: Multi-purpose Theatre 10 May 2012 16:46 #38434

  • rufusjack
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NO!!!!

IMHO, twins are a hobby and I have enough of them. I am in Missouri

You should look up Monte Fullmer in Nampa.

Video games: are not a money maker full time. They are cool for time to time but should not be part of a business plan.
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Re: Multi-purpose Theatre 10 May 2012 16:47 #38435

  • lionheart
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Hi, Jordon. Have you considered how much this whole project is going to cost to get off the ground? Ok, you might be able to buy the place at a bargain rate, but that other 25% that isn't completed yet isn't going to come at a bargain rate. It won't be 25% of your purchase price. It will be more like 50% of what the place really would cost to build if you started from scratch. If it is just a shell, then you probably are still looking at installing some plumbing, electrical, heat & air, fire sprinkler system, floor coverings, wall coverings, restroom stalls, security system, parking lot, concession counters, concession equipment, seats, screens, sound, projection, etc. If somebody walked away at a certain point during construction, you can bet there was a long way to go before it was complete and not just a little bit. None of the things I listed are what I would consider cheap.

You don't want to go into this kind of expense thinking you are going to show movies from DVD or BluRay all the time. Why spend hundreds of thousands of dollars on a building and then comparative pennies on your projection system. People come to see the movies and don't care if your building looks nice if the picture and sound doesn't.

As quickly as the full digital conversion of the industry will be complete, you should really research professional cinema grade DCI compliant digital projection equipment to see how much it will cost. As Revrobor mentioned it will start at $50,000 per screen if you are lucky, and could be significantly more. You might be able to get by with film projection for a short time, but it won't be long until it will be completely obsolete. Probably by the time you could get your building completed, it may already be gone. I'm assuming your project won't be finished for at least a year.

To sum it all up, it's going to cost you way more than you probably realize to get this thing going. If you make it that far, you want to make sure that "second run" is a viable option. Will people wait to see a movie at your theater if there is a 14 screen showing films on opening day only 5 miles away? No matter how low you make your prices, many people just won't wait on you. You need to find a way to estimate how much business you will get. And, no, I have no idea how to estimate what percentage of the market goes to 2nd run theaters. But since most revenue from movies comes in early weeks, it seems to mean that people generally prefer early dates over later savings. There are some successful 2nd run theaters, but many more succesful 1st run.
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Re: Multi-purpose Theatre 10 May 2012 19:33 #38436

  • howlie
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Thanks for the replies everyone. I appreciate it a lot.

I apologize for sounding like I'm just side-arming this whole thing and not taking all costs into account. I have an architect and contractor already working for me that have made me fully aware of the costs to finish the building. There's a lot of work to finish which sucks but at the same time I have a clean slate to work from as far as interior use of the space goes.

What my main question is is what projector technology is available that is at DCI standards for showing films but also would allow me to run gaming consoles through it as well. Basically I just want one system that does everything I need so I don't need multiple systems running in my booths. I'm just getting into this industry so I know hardly anything about how the studios work as far as providing a way for theatres to show their previously released movies that have been put out on DVD. Do I actually show them from DVD or is there some sort of hard drive system that theatres use for this? Digital is just recently making it's big leap into the movie industry so I'm only getting vague information to answer my questions about this.

I'd also like to add that I have a retail space connected to the theatre that comes with the sale. We're still running through ideas on how we can implement this space to bring a different cinema experience to our customers. I also forgot to mention that there is a hospital maybe six or seven blocks away that is expanding. The local colleges are also expanding so everything in this area is seeing growth.

This theatre would have to be multi-purpose with more than films to offer otherwise there is no point because the 14 screen Edwards theatre down the road is already taking the 1st run film business in the area. I want this theatre to serve the needs of the schools, colleges, and hospital by providing a space for presentations while also being somewhere were families can come watch a good film, play some games, and just hang out. I won't get into details about the whole thing but I just want to give everyone an idea that I'm not focusing this business on solely 1st run or even 2nd run movie ticket sales.

If it wasn't such a hassle getting the rights to show 1st run films then I would put more emphasis on that. From what I've read though studios have a huge monopoly and who, when, and where they allow their films to be shown so you have to play their big business game. I still want to have the capability to show 1st run films if I think it will be a good film so having the system to do that is important to me. However I also I want to be free of needing to completely rely on these big studios for the welfare of my business and this business plan is the way I think I can accomplish that.
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Re: Multi-purpose Theatre 10 May 2012 20:38 #38437

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I forgot to add that the area has no decent sub-run theatres. There is one that is six miles away but it's run-down and old. I think we would get a lot of their sub-run business seeing as how we're located within walking distance of the residential area and would offer a cleaner atmosphere that also offers variety of entertainment.
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Re: Multi-purpose Theatre 11 May 2012 03:18 #38441

  • Number6
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You're close: Building is a "convertible" building where the auditoriums can be converted to change.

I've been inside:

Very nice layout, twin houses are small and are built for digital only since there are no booths to speak of. Digital units would have to be hung from the ceiling. Seating capacity is only 110 per house.

Building is more like 90% complete with plumbing completed.

Need electrical completion.

Thing that really hurts it is the layout of the floor plan: lobby size much larger than the houses. If the houses were more like 150 to 200 seats per side, then you got a nice twin.

Thing that is attractive is the storefront to the left of the entrance..about 1500 sq ft where one could lease this out for a decent square footage lease, or could add a third house over here, but maybe with 70 seats total..

True, $200 grand for the place is ideal esp with the parking lot already for paving and possible expansion to the vacant lot to the right, but to supply the location would be another $5 to 700K to finish.

Discount would be nice, but with two screens, a lot of product would have to be on both screens. Once could go first run, but the 4wk contracts would be tough to move product in and if you got a dud movie, you're in the red for sure with a wasted house for the four weeks.
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Re: Multi-purpose Theatre 11 May 2012 03:32 #38442

  • Number6
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..Also, you'd be outside of the booking range of the nearest 1st run, so you're good there to go first run, BUT your tix prices had better be cheaper to attract the attention along with conc. pricing.

It's located in the part of Caldwell that does show growth and access is quite easy.

Thing to look at: How much operating capital do you have right now, since you know that the business will be in the RED the first two to four years until things can settle down before you would FINALLY start showing a profit.

Sadly, when the little twin was built, it was built by people who didn't have the foggiest clue on movie theatre design and building. It was built for two simple reasons: for SALE, or FOR LEASE.

They ran out of money and had to let it go.
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Re: Multi-purpose Theatre 11 May 2012 05:10 #38443

  • adam_knox
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For your idea for renting the space for video games, I was curious on what your pricing plan would hypothetically be. The only cost for you would be bulb usage on the projector correct? Would you have a separate screen for that or would you forgo running a movie in that time slot or only do game nights after film screening hours? In part of your agreement with the studios for digital movies do you have to guarantee a certain number of showtime or certain time slots?
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Re: Multi-purpose Theatre 11 May 2012 18:41 #38446

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In part of your agreement with the studios for digital movies do you have to guarantee a certain number of showtime or certain time slots?
Movie is a movie either film or digital - you sign a contract for so much percentage from the gate for 'x' amount of weeks the contract is arranged-this is for 1st run movies. Discounts: usually a percentage for the time you keep the film.
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Re: Multi-purpose Theatre 03 Jun 2012 19:28 #38569

  • Ptwin
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Im from Southeast Idaho area and was looking into this theater as well, We estimated it will cost $500,000 in addition to the purchase price, with 110 seats per auditorium you will have to keep a very full capacity at all times.
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Re: Multi-purpose Theatre 03 Jun 2012 21:11 #38570

  • Number6
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It was a great idea to begin with since the Linden closed down in '06 and Caldwell has no location of their own, but the builders didn't think through too well on theatre design to make this location a successful operation.

Thus, it'll prob sit until it gets converted to another form of business use.
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