The Evolving Upscale Movie Experience
Theater owners battle stay-at-home syndrome by offering expanded menus, luxe seating and stylish decor. But the challenge is hitting the right price point in a strapped economy.
AMC Entertainment’s “Fork & Screen” theater program is the equivalent of business class on an airplane: not quite as posh as first but offering plenty of amenities. For a few dollars more than the price of a regular ticket, AMC patrons are treated to upgraded seats equipped with a personal call button they can use to order food and drinks. The menus include everything from jazzy cocktails to appetizers (the crab Rangoon dip is recommended) to pizza and pasta.
As moviegoers start to ask not just “What’s playing?” but also “What’s on the menu?” theater circuits — even the two biggest chains, AMC and Regal — are aggressively experimenting with upgraded services in the never-ending search to boost traffic and improve the bottom line in the fight to get audiences to leave their homes. Catering to audiences’ appetites is also seen as one of the best defenses against letting Hollywood studios dictate the rules in a new world order of VOD and windows.
“I don’t think there is any one magic bullet that is going to change the course of history, but I think all of these things combined allow us to maintain our social relevance,” AMC CEO and president Gerry Lopez says. “Three years ago, it was all about the digital conversion and 3D. We’ve worked to do that. The next thing will be focusing on the guest experience. And much of it is about food.”
They’re not just thinking about the concession stand, though. Exhibitors, looking beyond Hollywood’s movies, are also seeking out alternative content and, in the case of AMC and Regal, getting into the film-acquisition business.
On the eve of CinemaCon — the renamed annual convention of theater owners in Las Vegas — Lopez and his fellow exhibitors from around the country are restless.
Box-office revenue and attendance are down. And with the bottoming-out of the DVD business, some studios are talking about shortening the theatrical window and offering new movies via a premium VOD service 60 days after a film opens in theaters. Theater owners are terrified that the VOD service will keep people at home.
“Theater owners are doing everything they can to attract people, while studios are doing everything they can to kill the experience of going to the movies,” Landmark Theatres CEO Ted Mundorff says. “If they really believe the premium VOD service won’t hurt, they are in for a big surprise.”
That increases the pressure on exhibitors to create an experience that gets people out of their homes. The latest fad is a hybrid premium service that isn’t too expensive but offers more than popcorn, a soda and, at best, a stadium seat.
For Landmark, that has meant creating an upscale environment including reserved seating, better-than-average concessions and an adjoining wine bar. Validating the circuit’s mandate, Landmark’s theater in West Los Angeles is thriving.
ArcLight Cinemas, another market leader in terms of offering upgraded services at a relatively reasonable price, has found similar success. It was one of the first to offer reserved seating, which is of particular appeal to adults. The ArcLight Hollywood opened in 2002 and did so well that parent company Decurion has since opened theaters in Sherman Oaks, Pasadena and El Segundo. Austin-based Alamo Drafthouse Cinema also has made a name for itself by installing long wooden tables in front of each row of seats.
The right price point is key. ArcLight and Landmark, which charge $2 or $4 a ticket more than a regular theater, have fared much better than high-priced luxury cinemas like Gold Class Cinemas. Five years ago, Village Roadshow made headlines when it launched its Gold Class, including a location in Pasadena. But with tickets costing $25-$29, Gold Class has had a hard time persuading consumers to visit its theaters on a regular basis — a must if a theater is to stay in business.
“Too much luxury can turn people off, especially in tough economic times,” says Mark Mulcahy, vp marketing at iPic Theaters, which bought out Gold Class in the fall. iPic is modifying those theaters, adding more seats so it can lower prices. In most of iPic’s eight locations, there will be two levels of service: Gold Class and premium (a premium ticket for nonmembers is roughly $17.50). The one exception is the Pasadena theater, which will remain a Gold Class location.
When all is said and done, the biggest focus for theater circuits like iPic is the menu. Concessions are a multimillion-dollar business for exhibitors, so the chance to increase that revenue is a huge incentive.
THE NEW FORUM: Caesars Palace will host CinemaCon ’11
The annual gathering of theater owners, formerly known as ShoWest, gets a new name and venue. The convention runs March 28-31 on the Las Vegas Strip. The studio presentations and speeches will be held in the 4,000-seat Colosseum, where Celine Dion has a residency. The event will feature the first public appearance by Christopher Dodd as head of the MPAA, appearing with National Association of Theatre Owners chief John Fithian on March 29.
Patrons still opting for the Gold Class service will get a special menu and seat-side service — plus a cushy reclining seat, a blanket and a pillow. Those opting to buy an iPic premium ticket will still get an upgraded seat. But instead of seat-side service, they’ll buy food from the lobby’s Grab & Go counter, a full-service eatery.
“Nothing is coming out of a jar or a can,” Mulcahy says. “We make the dressing for the Caesar salad in-house, as well as the croutons, chocolate-covered strawberries and the pizza dough. We do a great braised short rib pizza and filet sliders.”
There’s also a loaded bar that features drinks created for iPic by well-known mixologist Adam Seger, along with 13 beers on tap and 10 bottled brews. Nearby is a wine kiosk.
“It’s like the ArcLight but on steroids,” Mulcahy says. “People now have these robust home-theater systems. We have to give them a reason to leave the home.”
Like iPic, AMC also is experimenting with two classes of service: the higher-end Cinema Suites and Fork & Screen. AMC beta-tested both services for two years at theaters in Kansas City, Mo., where AMC is based, and in Dallas. It worked so well that AMC began offering Fork & Screen services last fall in seven theaters, including three New Jersey venues. Five of those also are Cinema Suite locations.
“Most definitely, we will expand more because of the success we’re seeing,” says Lopez, who has discovered that combining dinner with a movie appeals to busy adults, especially parents.
“Will it be something we offer in all 360 AMC theaters? No, just like there isn’t Imax everywhere. Learning how to run a restaurant is a little different than running a theater. You could say we are slow learners.
“It’s a question of time compression,” he adds. “There are only 24 hours in the day. Serving dinner with a movie helps you make the best use of your time.”
Regal also is running a premium dine-in program, dubbed Cinebarre, in a handful of theaters. The menu riffs liberally from movie titles: There’s a Pulp Fiction mimosa, a Lolita margarita and a Soylent Greens chef’s salad.
Reflecting the growing importance of food choices, there will be a special panel at CinemaCon on March 30 devoted to premium dining concepts. Speakers include top execs from Muvico, National Amusements, Movie Tavern and Studio Movie Grill. The National Association of Concessionaires is sponsoring the session.
NAC spokeswoman Susan Cross says there’s no doubt that customers want more food and drink choices. But building a kitchen in a theater is a major endeavor. Even changing the menu at a traditional concession stand is complicated. “The struggle is to keep your menu small enough so that you can get people through the line,” she says. “The bigger the menu, the longer it takes people to decide.”
It wasn’t until the Great Depression that theaters began offering concessions. And when candy became scarce during World War II because of sugar rationing, popcorn became the main offering. Concessions have become so important to a theater’s profitability — sometimes accounting for as much as 40 percent of net income — that they are partially responsible for getting theater owners to look for other types of programming.
The Metropolitan Opera’s The Met: Live in HD on Saturday mornings has been hugely successful. That isn’t usually a busy time for theaters, so special offerings like opera result in traffic theaters wouldn’t otherwise enjoy.
“Theater owners are dying for content, in part because concessions are so important,” says veteran Hollywood studio exec Chris McGurk, who now runs Cinedigm Digital Media, which offers alternative programming, among other services. The more people come to a theater, the more they spend.
AMC and Regal’s new distribution film company Open Roads, headed by indie film veteran Tom Ortenberg, is another attempt at ensuring there’s enough content to keep patrons coming back. If circuits are going to invest more and more in their environs, they need to keep seats filled.
Some theater owners are even beginning to sound like rival restaurateurs. Mundorff says he keeps meaning to fly to Portland, Ore., and visit Cinetopia, a high-end theater complete with an art gallery just outside the city in Vancouver, Wash. He’s also intrigued by Cinetopia’s wine bar Vinotopia, which earned a best-of award last year from The Wine Spectator.
“It’s about finding your niche,” Mundorff says, “and doing it well.”
CINEMACON 2011: Highlights of the Convention
- Sneak preview of releases from Paramount, DreamWorks Animation and
- Marvel Studios.
- State of the Industry keynote speech by Bob Chapek, Walt Disney Studios president of distribution.
- DreamWorks Studios sneak peek.
- Disney sneak peek.
- Independent film showcase.
- Pioneer of the Year Dinner honoring former Disney Studios chair Dick Cook.
- Roundtable discussion on digital filmmaking with James Cameron, George Lucas, Jeffrey Katzenberg and Chris Meledandri.
- Sony Pictures sneak peek.
- James Cameron’s special demonstration on frame rates.
- Lionsgate sneak peek and special screening of Warrior.
- Warner Bros.sneak peek.
- Closing-night awards dinner.