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Hello,

I own a single screen theater in Chicago, the Patio Theater, which recently raised $50,000 through Kickstarter for a digital projector upgrade. I face another difficult situation though...

We are currently an intermediate run theater, charging $5 for all times and all ages. I am usually charged 35% of ticket sales to the studio. For our first year (since we reopened in June 2011) we had 35,000 people for attendance.

Here is my biggest issue at the moment. On top of whatever I owe the film studios, the city also takes 9% and the county 3% in what they call an Amusement Tax. This 12% tax REALLY hits me hard, and the worst part is, the only reason I am being hit with this tax is because I am considered a movie theater in Chicago. A brand new 18 screen movie theater in Rosemont (a suburb of Chicago) only has to pay a 3% amusement tax! How is this fair?

It's taxes like these that kill independent theaters, especially one or two screen theaters in the city.

I'm trying to weigh my options and see if going non profit would be better. Here are some of the pros:
0% amusement tax
I get to show a different variety of films
I'm not at the mercy of playing bad Hollywood films for 35 of the 52 weeks of the year.
The money goes back into helping restore and keep this vintage classic 1927 theater in tip top shape.
I get a salary being on the NP Board.

On top of the 12% tax, I'm at the mercy of Hollywood, having to play shitty movies between the months of Oct and May (shitty as in low attendance rate in general). So here I am, in December or January, frigid Chicago winter, bringing in 300-350 people a week, barely enough to cover employees, studio fees and the HEAT bill!

I don't know guys. What do you think? I'm just shooting ideas out there, I'd like to get some professional opinions on the matter. Thanks!

Congratulations on hitting your kickstarter goal. That is a monumental accomplishment and a testiment to how people may support the patio in the future.

I also own an historic theatre that is moveover and struggle with the same Hollywood issues, but at least I don't have the tax issue.

Here are some of my thoughts and opinions:
1) $5 is too low of a ticket price. We were $5 for a long time and were afraid to break that psycholigal barrier of going higher that $5. But last summer we went up to $6. AND not only did attendance not drop, our concession PC has actually gone up for some reason.
Poll your customers using Facebook and let them know your issue and see how they respond.

2) We have considered going non-profit. Benefits are ability to get grant money, accept donations, avoid taxes, etc. Down side is you are giving up control of the theatre to a board, made up of people who have other lives and possibly other motives and definitely other ideas of how the Patio should be run. If you plan to make the Patio your life long career and/or pass it down to your children, think really hard about where the theatre will be in 20 years as non-profit and where you will fit.
It is not uncommon for non-profit founders to eventually be forced out of their own company by a board that changes over the years. I've personally seen it happen.

One thing we have done is form a non-profit live theatre company who calls our theatre home. They produce several live shows a year and in the future all non-movie related events (concerts, touring shows, etc.) will be funneled through this non-profit. We rent the theatre to the non-profit but also have a seat on the board. We hope to use this as filler during the spring and fall when movie attendance is dead.
One benefit to being a single screen move-over is you get to pick and choose which movies you actually play OR choose NOT to play at all if you have a live show to do instead that is more profitable than whatever dud films are available.

Patio,

Congratulations on your successful fundraising effort. You have a beautiful theater.

Make sure you are deducting the taxes out of the ticket price before you pay the film rental. The studios do allow you to deduct the taxes from the ticket price. Plus that tax should be passed on to the customers to where technically you are not paying for it. Up the price now (you can justify for your broken air conditioner as well) I believe is fine.

You mention playing different movies if you are a non-profit. Why would that change? Are you expecting a much different clientele if you go non-profit?

Consider have the Barton organ back in playing condition. Probably you can get volunteer labor to help. Consider doing some silent films and vaudeville. Nobody does vaudeville in Chicago. There are tons of live acts that are 'unknown' that might jump at the chance to play the Patio.
You worked to hard to get the theatre up and operating. A variety format like the Music Box does might be another answer. The Portgage just won there battle to remain a theatre.
How about starting a 'FRIENDS OF THE PATIO' to help you keep going. Some simple perks might really help starting such a group.
Thanks

Consider having the Barton organ back in playing condition. Probably you can get volunteer labor to help. Consider doing some silent films and vaudeville. Nobody does vaudeville in Chicago. There are tons of live acts that are 'unknown' that might jump at the chance to play the Patio.
You worked to hard to get the theatre up and operating. A variety format like the Music Box does might be another answer. The Portgage just won there battle to remain a theatre.
How about starting a 'FRIENDS OF THE PATIO' to help you keep going. Some simple perks might really help starting such a group.
Thanks

Anyone on this forum run a non profit theater that can offer some advice on how they are running it and if it has been successful for them?

Hi, Patio,

I book for several non-profits. Send me your direct e-mail e-dress and I'll hook you up with them.

Larry Thomas
Larry Thomas Booking
Cincinnati OH

I'm almost sure the Gene Siskel Theatre in the Loop is a 501c3. The same is true for Doc Films. If the local high school has business classes you might get interns to help you to cut down payroll. Thanks, Mark

should be the last resort.

There are a surprising amount of theatres that act like non profits with fund raising, memberships, etc. yet are for profit. 5.00 is imho too cheap. If you raised 50K in a kickstarter your patrons can easily;y afford it.

IMHO and complaints about taxes..... your business is in the city of Chicago. If you want cheap taxes let me tell you about TWP 739 in norther Maine. No taxes. No people or services either. Taxes and fees are a cost of doing business in places where there are enough people to do business with. All those people need roads, places to park, street lights, sidewalks, police, ambulances, fire depts. etc. etc. Figure out how to book and charge to make those % not an issue for you.

I would be happy to waive my consulting fee to see is we could come up with other solutions . Call me if you wish
631-682-8456
Mike
Furlinger cinema services

Why do you have a problem with the taxes? Every other theatre in your city is paying the same, and the moviegoing public is used to them. If you're playing the same films and aren't within a buck or so of going rates, you're not "doing business", you're buying the product with your own money and giving it away. Not many of us here can do that and keep the lights on for long.

If your product is equal to any other, or close enough to it, then take a deep breath and get your prices up to within shouting distance of going rates.

Here's a classic exammple, taken from my personal experience. At least in my neck of the country, drive-ins "traditionally" charged 3 or 5 dollars less than their indoor neighbors... or maybe even did carload pricing. Kids under 13 were frequently let in free. Of course, this led to some pretty mature-looking 12 year-olds at the boxoffice. Recently, the studios decided we had to charge for kids. Bucking the directive, many drive-ins around here charged $1.00. One actualy charged fifty cents for a year or so... thereby satisfying the letter, if not the spirit of the studios' directive not to "give it away". Still... a lot of pretty old looking youngsters going by the ticket booth.

A couple years ago, I got tired of the deception, foisted upon me by my own customers, and decided that if they were fudge about age, then at least the spread wouldn't be so great. I went $8.75 for adults and $5.75 for kids and seniors... 4 & under, free. Now, I get more 4 year-olds than I used to, but the abuse isn't nearly as great. If they lie to my boxoffice, at least I get something more reasonable than a buck or two, and I usually get what's left at the snack bar.

One thing I can definitely say... the price increases did nothing to slow down attendance, but I'm a lot closer to writing that check for my new projectors than I would have been otherwise.

What about one price for all seats, all ages, all shows?

revrobor wrote:
I think it's a matter of identifying the audience you want to serve, Robert. At one time, I had carload pricing at my drive-in. I regularly filled the theatre, but it was a totally different crowd. More often than not, my customers were stocking up on beer at the local Quickie-Mart, then dropping their last $5 at my boxoffice. They used my place as a cheap, dark, relatively unsupervised place to drink, party and be generally unruly. My bathrooms were regularly trashed, it usually took 3 hours to pick the place up and I wasn't making nearly as much in concessions. There were times when I was sure it was costing me $10 to have each of them here. Did I have families that couldn't afford other places? Yes, but to serve them meant attracting the other element, too... and that ruined it for everyone.

When I went with per-capita pricing, I turned a large percentage of my patronage over, though it took a couple of painful years to complete the transformation. The rowdies went elsewhere. My place was no longer attractive to them because it wasn't free. They were replaced, eventually, by a clientele that appreciates the place, takes care of it, supports it well and is a pleasure to serve. Given the choice, I'll stay with what I've got, though the rowdies wish I'd go back to the "good-old-days". I still get the lower-income patrons, though admittedly, not as often. They still come out here, but make their choices more carefully, rather than just loading up the gang every weekend and heading out.


As for the "one-price-for-all" concept: I've seen that done in a few places, but my impression is that it's more a strategic move on the theatres' part. Mom & Pop aren't likely to pay $9 to take their 3 year-old to a PG13 film. If you're having a problem with screaming babies in the auditorium and don't mind getting rid of all of the youngsters, then I'd think that a guaranteed way to accomplish it. You'll no longer be viewed as "family friendly", and you won't likely book films like "Ice Age" anymore, but you'll certainly get the adults who want the place to themselves. Question is... can you survive without the kids' trade?