Small underserved markets don’t necessarily mean mom and pop single screens or twins. There are many smaller markets which are currently being served by 4-8 screen theaters that are operated by big chains (AMC, Cinemark, etc.). These theaters are virtually ignored by their operators as they are not in large markets and face no competition in the smaller markets in which they reside. These theaters are a shadow of what you think of when you hear “AMC” or “Cinemark”… Slope floors, old seats, no digital sound or projection (with no plans on getting any), plain exteriors, major repairs not made, etc.
I personally ran a theater like that for Regal… and it was not in a smaller market, but a very large one. Regal ignored it simply because it was part of an acquisition of a smaller chain and was not in a market that Regal was very interested in. This theater was a 10-plex with only two decent auditoriums. These two auditoriums were re-done with a nice floor, newer wall and floor carpet, digital surround sound and stadium style high back seats installed on a slope floor. The other auditoriums were virtually ignored. Four screens were added on in the 80’s to make it a 10-plex, but nothing had been done to them since then… 20 years later. They still had the original old low back plastic seats, stereo surround sound and faded carpet. The remaining four screens were even worse off, not even being upgraded during the construction in the 80’s… Seats that were so old that cleaning them would ruin them (not to mention the total lack of any padding left in them), old burlap curtains that were not just torn, but disintegrating (looked like the walls were laced with old potato sacks), and mono sound. And as for the bathrooms and floors… I won’t even go there. I frequently felt embarrassed at charging Regal’s high first run prices when the customers were getting such a sub-sub-run cinema experience, but I did the best I could to turn it around without any renovation work with superior customer service. My work in doing so did not go un-noticed. Another small chain saw the increase in business and took advantage of Regal’s lack of caring about this theater. After a massive renovation, this theater is now one of its new owner’s best money makers. This example is not meant to support the previous post about it being better to renovate existing buildings, even though obviously it can work, but to show that the big chains do leave opportunities open. If they are willing to ignore a theater that was in a very large market, you know that they are ignoring the ones they have in smaller markets.
Getting back to the point, the big chains are leaving multiple opportunities available for independents to move in to smaller underserved markets and be successful. The fact is most of these small theaters ran by big chains are being leased and are so unimportant to their corporate offices that they would just be shut down if an independent built a theater in the same town. This is where Cinema Redux’s concept would work. Move into a smaller market of 10k-30k which is currently being underserved by an old antiquated 4-8 screen theater, build a nicer new theater (nothing fancy, but nice) and take the market over causing the current cinema to close. I personally know of an old AMC 6-plex in a market of 30k+ in Illinois which is in terrible shape, yet still raised all their prices to the same AMC standards as those in a 100k market would have. Cinemark has dozens of old 4-6 screen theaters in smaller Texas towns of 12k-30k which have not had any work done on them since the late 80’s or early 90’s. These theaters are all ripe for independents to move in and compete. I’ve always told myself that if I had the chance to build a theater in a smaller market that I would not do it if it meant causing another independent to have to shut their doors, but I have no problem what-so-ever causing the closure of an ignored theater ran by a big chain. They are simply not important enough to the big chains to do anything with them, except shut them down if challenged… Leaving a decent sized market completely dominated by the new independent theater. So yes, the concept that Cinema Redux has put forth can work, and work well. It is just based on how you look at it. That is why I am currently working with Cinema Redux on a venture that I am attempting to get off the ground, and so far they have been very helpful.
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