A new business model for movie theaters, an indie movie glut, more (updated)

The New York Times has a really cool article about the woman who founded Film Streams, not-for-profit art house movie theater in Omaha, Nebraska. Rachel Jacobson, a 29 year old Omaha native,

said in an interview, [that] though there are certainly more of them being made nowadays — (the showing of small films) is not great business. “That’s why a nonprofit is the way to go,” she said. “Because that’s the only business plan that allows you to show good movies. The multiplexes have just taken over, especially in cities like this.”

Later in the article Jacobson says that they needed to sell about 30,000 tickets per year to “meet our expectations”; they’ve sold 30,000 since they opened on July 27, 2007. Not too shabby.

A recent Variety article discussed the huge growth in the “mid-budget” ($20–60 million) film. One very interesting chunk (and there’s much more to the article):

In 2002, about 450 films were released in the U.S. In 2007, the tally was about 600. “All of that growth is independent film,” Glickman trumpeted.

But those 150 extra pics mean distribs are fighting for smaller pieces of the box office pie, and it’s gotten tougher and more expensive to grab moviegoers’ attention.

“We’d like to get the titles spread out better over the year,” admits NATO prexy John Fithian. “If we didn’t have four blockbusters competing on the same weekend, the titles would spread out and the theaters would put in a smaller art picture and not keep eating each other’s lunch.”

Update (3/17/08): The Hollywood Reporter has broken the news that one of the largest movie theater chains in the country, Regal Entertainment Group, has decided to allow red-band (R-rated/restricted) trailers to play in its theaters, after an almost industry-wide moratorium on them following a damning 2000 FTC report. The chain had ruled them out for fear of offending customers and concerns that an R-rated trailer might accidentally get screened before a PG- or G-rated flick. (The widespread adoption of digital projection systems has apparently allayed this second concern.) Other major chains are expected to follow suit.

The good? R-rated comedies like Superbad and Pineapple Express will once again be able to show trailers that more accurately and effectively market their films. The bad? Those god damn horror movie trailers that plague me every time I see movies are probably going to get a whole lot worse.

Update (3/22/08): The New York Times has a kind of snapshot of the turbulent times in the movie theater business: “At Cineplexes, Sports, Opera, Maybe a Movie” by Brooks Barnes. Many of you regular movie-goers have already seen ads for the Metropolitan Opera, and I’ve covered the 3D phenomenon in other posts, but apparently tickets to a Mets simulcast sold out quickly enough to encourage the team to do more this summer.

As the article states, “Operators want people to think of theaters as vibrant, busy places. But when weekends account for 70 percent of movie ticket sales, multiplex parking lots spend a lot of time sitting empty.” How theaters choose to cultivate their Mondays through Thursdays in the next few years is going to be interesting.…

Related post: 2007 box office breaks a record, ticket sales flat; Monsters vs. Aliens to be first true 3D animated film (updated)

Posted on March 15, 2008 at 22:48 by Gordon@MovieMakeout · Permalink
In: Around the Intertubes · Tagged with: , ,

5 Responses

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  1. Written by Andrew Hankins
    on 2008-03-16 at 21:58
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    Golly.. like that deep-seeded dream of owning my own movie theater needed any more encouragement. I know for sure I’d have Best Picture night once a month.

  2. Written by David Bradley
    on 2008-03-17 at 08:35
    Permalink

    Interesting thought. I’ve just posted on the very subject of the extinction or otherwise of the movie theater goer…

    db

  3. Written by Gordon McAlpin
    on 2008-03-17 at 09:09
    Permalink

    (reposted from my reply at David’s blog)

    Hey, David. Thanks for linking to your article. It’s got some very strong points, but I’m inclined to disagree with any doom-and-gloom sentiments about the movie theater industry. Your hedging-your-bets phrase “as a preferred entertainment vehicle” in that last sentence of your article is the key, really.

    The industry will change, as it’s already begun to, to provide an experience that people can’t get from home — 3D films; big-screen HD gaming (since the technology is already there, this makes plenty of sense); more live streamed events (a la the Metropolitan Opera or the Super Bowl)… perhaps even just turning into more of a niche entertainment venue, with BEER or real food to justify the high ticket prices.

    I do think multiplexes may start to lose some of their strangehold on the industry, though. But is that a bad thing? The industry in general needs to shrink a little bit to become more profitable. Hollywood has already started to feed on itself with $200 million movies that make only $50 million profit.

  4. Written by Jarvis Badgley
    on 2008-03-18 at 08:44
    Permalink

    I have been toying with the idea of a non-profit for about a year now. In addition to the lower cost of operation, it also make licensing for movies already out on DVD a LOT easier. There’s already programs in place for licensing to non-profit organizations, it doesn’t require special agreements with the studios and distribution houses.

    It pains me that small single-screen theaters can’t afford to operate any more. I blame Regal.

  5. Written by Alex Karelis
    on 2008-03-24 at 07:43
    Permalink

    It sounds to me like you have a couple of parallel, potentially intersecting, and potentially wonderful things going on here.

    First of all, the business model you describe becoming maybe the dominant paradigm sounds a lot like India. Lots of little movies fiercely competing. Bollywood has so much creative energy going on that it’s hard to see the “glut” as a bad thing. If our distribution system can evolve into something like that, maybe with all the added choices people will go back to the thirties-forties-fifties model of going to see a movie in the afternoon instead of making it a big weekend thing. With the not-for-profit theaters springing up, maybe the lower ticket prices will speed that along. Who knows, maybe the occasional opera or rock concert or sporting event will in some way approximate the kind of variety that theaters had going back in the day that made them what they were then.

    I was just a film minor, so what do I know. I may be getting half of this wrong. But I think it’s a neat idea.

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