Save the Cinema: Taking Responsible Action

Part three of the three-part series, “Revival of the Fittest: Evolution of the Movie House Experience.”
(See Part two)

The success of a movie theater depends upon customer satisfaction, but customers aren’t simply satisfied by the movie itself.  It is a uniquely enveloped experience that entices people to buy a ticket.  Else why would movie watchers leave the comforts of their own home cinema?  There is not enough incentive nowadays to draw any substantial crowd to the theater.  Surrounding the film must be features the audience does not have at home.  For instance: pseudo drive-in viewing rooms give a uniquely vintage seating arrangement, or places like the Cinema Grill in Colorado offer event hosting and full dining experiences.  Theaters who are short on ideas for in-house rebranding can turn to companies like The Screening Room, who take charge of revamping and renewing the appeal of existing theaters.  The Screening Room’s sole mission is to re-invigorate the movie-going experience through conceptually developing boutique cinemas.  “Boutique cinemas combine the magic of the movies with the natural appeal of a coffeehouse, café or wine bar to create a true destination spot.”  Alternatively, if ambitions are greater than simply boutique, visionary cinema owners can take inspiration from San Francisco’s Sundance Kabuki, where local curated art, rotated quarterly, hangs on the walls.  A truly posh experience.

Most notably, theater owners like AMC take a socially conscious approach.  Teaming up with the Autism Society, select AMC theaters are set up as optimal viewing experiences for families of autism.  Called The Sensory Films Program, screening room lights are lit and sounds are kept slightly down.  “Guests are allowed to get up and dance, walk, shout or sing, creating a safe and accepting movie going environment for individuals who might otherwise never be able to attend a movie due to the challenges of autism.”  According to the Autism Society, families are allowed to bring dietary-specific foods, and AMC’s strict “Silence is Golden” rule will not be enforced.  Through the support of AMC, Sensory Films show in 33 states across the country, where many grateful families can take their autistic child to the cinema - without fear of reprisal. 

Whatever the persuasion, there is no reason to let drowsing dogs lie when it comes to the economic downturn of the movie theater business.  In other words, there are no excuses.  Business is about ownership and innovation, and there are plenty of examples to glean from.  We’ve spent time examining the root causes of this ‘crisis,’ dispelling any grounds for entitlement the general public (and theater management) may think they have.  Now is the time for action – especially with the increasing threat of movie house closures.  At this point, accountability lies with the responsible and informed.  I propose megaplex cinemas outfit their screening rooms with multi-functional resources to support options like a Cinema Daycare or Cardio Cinema.  To promote particular films or campaigns, open a thematically geared gift shop to encourage point-of-sale purchasing.  Whatever the solution, the point is that they exist.  With a little creativity, there is great potential to turn this movie theater mess into a silver screen miracle.

Who’s Fault Is It, Anyway? Examining Root Causes to the Movie Theater Industry's Deconstruction

Follow-on to part one of a three-part installment, "Revival of the Fittest: Evolution of the Movie House Experience."

In 1948 the Supreme Court ruled big film industry control over the movie business violated anti-trust laws.  Because the major Hollywood studios vertically controlled production, distribution and exhibition, the oligopoly prevented competition within the marketplace.  Although loosely enforced (if at all), the divorcement decree still exists today.  With the FCC recently relaxing rules against cross-ownership between television, print and radio, and the new era of digital distribution and exhibition growing strong, there is reason to wonder if the restriction on Hollywood vertical integration is even relevant anymore.  Lifting the ban would allow Hollywood to once again bolster up movie theaters, bringing back the customer base that is waning.

But is it really their responsibility to intervene?  I think not.  After the divorcement of production/distribution and exhibition, the relationship between Hollywood studios and movie theaters compartmentalized.  Production companies draw crowds in by focused marketing on a particular film, while owners of movies theaters are responsible for facility advertising and sustainment.  This relationship passes accountability of the movie theater over to its management team as a separate business entity.  Movie theaters are their own business.  They are not entitled to “bail outs” by the production company.  Their profit-loss margin is just that – theirs. 

The truth is that more and more theaters are closing their doors across the country.  But if you look closely at each as a distinct entity unrelated to its product (the movie), you have a service-oriented business that is individually responsible for inventory, advertising and market relevance.  No matter what the business, if that model does not make changes with its industry, their failure is inevitable.  Most movie theaters are not doing much in regards to service improvements, hence the growing number of closures.  We can lament that one of the world’s favorite leisure activities is fading away, but it’s not simply because of changing times.  American movie theaters are fading away because of bad business management and virtually no brand development.  Result: no brand loyalty and decreasing relevance.  

No more is a film enough to draw a crowd.  People opt to stay home if all they want to do is watch a movie.  Not to mention films aren't promising enough anymore to peel people away from their 42-inch flat screen plasma t.v. and endless trips to the snack bar (the kitchen).  Some theaters are turning to outside agencies in an effort to develop marketing strategies. For example, West World Media out of Connecticut specializes globally in exhibitor and venue-marketing services, strategically directing customers back into dimly lit caves of fantasy.  Yet at large, the issues plaguing movie-houses are internally rooted: lack of ownership.  The definition of insanity is doing the same thing over and over again and expecting different results.  The popcorn is still bad.  The floors are still sticky.  The prices are too high in relation to the non-experience movie-going now is.  If more theaters would take on projects like facility overhaul or strategizing with project specialists externally, they might have a fighting chance.  Thankfully some places in America have gotten a clue and are actively enhancing the theater’s appeal. Alamo Drafthouse Cinema employs a chief creative officer solely responsible for creating unique programming events.  Fox Restaurant Concepts marries film and dining into a boutique experience.  Other major chains are following in suite by offering special dinner seating elevated above the general audience.  There are many options available that do not include dependence on Hollywood for hand-outs, and practical business sense eliminates excuses for entitlement.  The success of a movie theater is dependent on the creativity and management of its owner.  But having a handful of specialty theaters will not save the theater experience as a whole.  What other projects can be implemented to “save the clock tower?!”  A problem is only worth pointing out if possible solutions follow.  In part 3 of the "Revival of the Fittest..." series, we’ll talk about infusing the portals of escapism with new life.

Disintegration of the Movie Theater

Part one of a three-part installment, "Revival of the Fittest: Evolution of the Movie House Experience."

At the rate movie houses are closing, it is evident the economic downturn has affected the film industry greatly.  However, another large factor affects this trend: market evolution.  With more consumers turning to “Video On Demand” (VOD), the industry has no choice but to concede by moving their exhibition to an online format.  As a result, we have seen a significant drop in movie house ticket sales since it’s heyday in 2002.  So who is to ‘blame?’  How can it, or should the theater exhibition model be saved?  What is the fate of the movie theater experience?

There are 32,362 movie theaters in North America.  23,573 are closed; 11, 039 are demolished or scheduled for demolition; and 8,789 are still open for business.  Of the 8,789, only 7, 282 are showing movies; 263 are slated for restoration; and 388 are under renovation.  Wholesale revenue from distribution, the industries historical cash cow, dropped more than 45 percent between 2009 and 2010.  In May of last year, the MPAA expressed support of the FCC’s act to ‘green light’ digital transmission of newer movies.  This comes in defense of the piracy gap between new film premieres and distribution.  Additionally, the FCC and MPAA feel this move is in the best interest of audiences and their growing demands for flexibility.  Many fault big industry executives as a root cause and their resistance to splitting profits any more than necessary.  While that may be true, why is that a fault?  Successful business planning requires periodic evaluation of all ratios for productivity and asset deficiencies.  It is a key business strategy to control success through controlling cost and determining relevant trends to follow.  But it sure doesn’t help hearing executives weakly defend their position with excuses. (i.e. disabilities and children keep families from going to the theater).  Call a spade a spade: it’s costly to premiere a movie.   The profit loss margin is too great now, and it simply makes smart business sense to push for dual availability.   While true digital sales will not make up for loss in wholesale DVD distribution, and significantly lower future revenues are a stark reality, the market trend is already moving speedily down another track.   

Film production and distribution companies are consumer-driven.  The consumer wants convenience, and the pirating won’t cease.  The fate of film exhibition is already sealed: the theater experience is an endangered species.  That is, unless executives find another way to bolster the movie house business model.  But is that really their responsibility?  I’d argue that it is not.  In the next installment we will examine exhibition responsibility and accountability throughout history verses now.  Every creative industry is marked by change motivated through transformation and adaption.  Filmmaking is no different.  Whether we like it or not, the digital exhibition model is a way ahead for the industry.

Part two of three in the "Revival of the Fittest..." series:  Who’s Fault Is It, Anyway?  

Examining Root Causes to the Movie Theater Industry's Deconstruction