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TOPIC: 4 specific questions

4 specific questions 19 Dec 2000 16:20 #999

  • buddy
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Hi.

I first would like to start off by saying that I have been looking for a site with the type of information you guys are providing for....must be 3-4 years now. I have been exploring the idea of getting into the theater business. I have read all the past articles that have been posted and greatly appreciate all the information you guys have shared. After reading the postings I am left with 4 specific questions that I was hoping someone could help me with.

(first a profile of my region)
I am located in NW Indiana and know of a couple 1 screen second run theaters that are in towns with populations ranging from 15,000 - 20,000+-. I am thinking of talking with the owners of them and possibly making an offer on one or the other. There are 3 major multiplexes in our area...a 16 screen Karesotes....a 9? screen Sony...and a 8? General Cinema. These theaters are all about a 20 minute drive from both of the 1 screen theaters...which are both located in town square type settings. Both 1 screen theaters seat roughly 400 people.

Question #1)
I have read the posts regarding how the studios charge a percentage of gross for the film rental and have also read the posts about "House Allowances". I am a little confused here. Being a small second run theater would I pay just percentage or would the "house allowance" come into play.

Question #2)
I know that this next question has a lot of outside factors that affect the answer but...what percentage of daily/weekly capacity is to be expected in a theater my size in an area with my size population. I am trying to work through the numbers and this is a huge variable for me. I know that how well the theater is ran and what movies are shown will affect this number...but can anyone help me guestimate?

Question #3
I have thought that running a double bill of a new, but still second run movie, with an older movie with one of the stars of the 1st (or the same theme of the first) would be a neat way to bring in a bigger crowd. I read one posting that seemed to say that the older movies cost more...did I understand that correctly...and if so, would the cost be prohibitive?

Question #4
I have read many posts saying not to get into this industry for a quick buck and that is not why I am wanting to do this. I am looking forward to the challenge of running a small business(second time around for me) and possibly growing that small business into something a little larger...much down the road I realize. My question though...Do you guys think that a theater the size of the ones I've describe in the area I described can provide enough income to compete with my current job. I don't make a fortune (mid $40,000). I know anything like this would be a risk but is this realistic. My numbers say yes depending on the aswers to question #1,2 and 3.

Any thoughts would be greatly appreciated.

Thanks in advance.

Mike Stiefel


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Re: 4 specific questions 19 Dec 2000 22:57 #1000

  • Avalon
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#1: If you do a search, you should find RoxyV's(I think) response to this question. He said it much better than i ever could.

#2: Depends on the product. You can have the nicest theater in the world, but nothing worth seeing on the screen. Also, expect weather to effect attendence -- home games, TV shows, concerts, alignment of the planets have their effect, also. There is no concrete formula i know of.

#3: Older films cost the same or more. I have college town so i play art films. My last theater was in a mill town. I played 1st-run. Your customer base will determine what you play.

#4: $45k a year? If I made half that I'd be driving somehting other than a $1500 minivan and a 30 year old Harley Davidson. It will be a long road before you even make minimum wage. Yes, your emplyees will make more than you. Welcome to your life in the theater biz.
Paul Turner
Avalon Cinema
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Re: 4 specific questions 21 Dec 2000 11:14 #1001

  • Mike
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Hi Mike............ while much of this business is unknowable except via seat of the pant acquisition the internet has helped a lot........ Never before in written form you can now find excellent dissertations on every subject of interest to ourselves.

To begin: reset the search date on the browser for each subject to "show all of last year" and that will suitably bury you.

#1 "small second run" means you'll rarely get into the 90/10 as thios most applies to big, busy, sell out, packed theatres. In 7 years I've never had to deal with it. You'll pay minimum and flat fees vs. 35 or 30 % in a second run place. Older films, classics, are often the most expensive in terms of flat fee rentals. Also: shipping will chew you up on the classics.

#2 Too hard to project. Is the area scary? Near parking? Near a college? What's the demographics? A town of 20,000 should be able to support 2 theatres and maybe a sub-run such as you are suggesting. The problem is you'll be incredibly restricted by one screen!

#3 As population goes down..film gourmets go down. My experience was that there simply wasn't enough people to justify this type of programming in a for profit setting in a small town. If it was me I'd be booking 3-4 pictures and showing them on different times each day. I'd want more screens.

#4 Our 3 screen nets about 40 without paying my wife or I for the 80 hours per week we put in. Can it generate that on one screen? No, I don't believe so. However, if you have a college and or liberal area that loves film and just isn't being served there is a living to be made. I'd have to know your market before I answered that one.

Go out on a Monday night to the movies. Walk into each theatre and count how many are inside. Go Tuesday, etc, etc.

Get a part time job working at a local theatre.
Best of luck!
Michael Hurley
Impresario
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