Smaller Movie Theaters Got Creative to Survive – and They’ve Earned a Hot Box Office Summer
The summer movie season has arrived, bringing much-needed revenue for theaters still in the process of recovering from the pandemic. The three national theater chains, AMC, Regal and Cinemark, are in various stages of recovery and aren’t expect to post quarterly profits this year, but other theater operators tell a much more optimistic story.
“Theater owners keep saying over and over that we just need more movies, but it really is true,” said Brian Schultz, CEO and founder of Look Dine-In Cinemas. “We have built an experience at our theaters that gives value to moviegoers and we’ve gotten amazing response from our customers. All that was missing was more films that they want to see, and we’re getting that this summer.”
The last three years have been grueling for exhibitors. AMC’s meme-stock rollercoaster ride and Regal’s odyssey through bankruptcy court have been well documented. But those two chains, along with the more financially stable but not yet profitable Cinemark, only make up a combined 53% of the roughly 39,000 movie screens in the United States.
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The rest belong to a constellation of regional players, premium chains and independent cinemas, all of which faced a hard road getting through the pandemic. Many got through only because of federal and state grants made available to businesses during COVID shutdowns as well as relief funds created by the National Association of Theatre Owners to pay furloughed employees.
Not everyone survived. Hundreds of theaters never reopened, and NATO estimates that roughly 2,000 screens were lost to COVID. But as that organization would tell you, that’s just a 5% drop from the nationwide pre-pandemic screen count.
Of course, getting to reopening was just half the battle. Theaters had to navigate an inconsistent release slate from studios, as the abundance of ticket and concession sales from 2022 summer hits like “Top Gun: Maverick” and “Jurassic World: Dominion” gave way to a four-month slump where grosses hit lows not seen in over 20 years, not counting the shutdowns.
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But even this period of struggle was also one of experimentation and opportunity for some theaters. Christian Meoli, owner of the luxury Cinelounge theaters in Hollywood and the San Francisco Bay Area, came up with plans to turn his theaters into a fun watering hole for the local community, regardless of what films were on the marquee.
At its Bay Area location in Tiburon, Cinelounge customers are greeted by an animatronic Alfred Hitchcock and can buy custom flavors of popcorn and glasses of wine. Along with the usual classic film screenings one might expect from an indie theater, Meoli and the Cinelounge team have hosted quirky events like silent disco nights, speed dating for cinephiles, workout sessions set to Jane Fonda videos, and viewing parties for new episodes of “Succession” and “Ted Lasso” with free admission.
“We don’t just want to show movies. We want to create events that are unique and that people know are made with a personal touch by people who are just as big movie fans as the audience,” Meoli said. “If you’re not doing everything you can to create an experience that makes moviegoing feel like a special event from the moment someone steps into the theater, you’re going to get left behind.”
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A few luxury chains, like Cinergy Cinemas, were able to get through by offering more than just movies. Cinergy, which operates six cinemas in Texas with additional locations in Illinois, Oklahoma and North Carolina, offers other attractions like arcades, bowling and escape rooms in addition to its dine-in theaters. President and CFO Rich Schwarte said that those attractions were “the difference between struggling and getting by” when the box office dried up between August and October last year.
“We expected a slowdown at the end of summer with kids going back to school, but there were just no films that were performing for us,” Schwarte said. “From March 2020 until around the start of [the fourth quarter] of 2022, it was a really sketchy time for us.”
But now, Schwarte says that Cinergy is in the midst of its best business in years, thanks in large part to “The Super Mario Bros. Movie” bringing back families en masse to its locations. And like Meoli at Cinelounge, Schwarte said Cinergy focused on creating a strong experience for moviegoers who hadn’t been to a theaters in months or perhaps even years.
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“I think one of our greatest advantages isn’t even our attractions, but that we are a family-owned company that can be very nimble,” he said. “When a big chain wants to make a major investment in its auditoriums or its concessions, they need to do cost analysis, have a couple of quarterly board meetings to get a buy-in from a large contingent of people. When we want to make changes to our theaters, we just get together the operations team at that location and we can get it implemented within a month. And if we need to adjust based on customer feedback we can do it just as fast.”
Brian Schultz believes that responding to that feedback is essential for any small chain and part of the reason why Look Cinemas were able to get through last year’s slate slowdown. Using an opt-in customer loyalty program, Schultz and his team were able to get constant feedback and data from their customers and use it to quickly improve their dine-in menus and theatrical experience.
He believes that is a major reason why his company’s locations in six states have seen sustained turnout even with films that don’t reach the top of the box office charts, such as Crunchyroll’s anime films, Indian titles like “RRR” and “Ponniyin Selvan” or indie king “Everything Everywhere All at Once.”
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“We’ve seen directly how having a variety of titles can be a huge benefit, because we’ve heard from people who come to our theaters for those specialty titles after going to other big box places where the experience wasn’t a high quality and tell us, ‘Wow, I almost gave up on going to the movies,'” Schultz said. “That variety hooks in more people, and we work to keep them there with an affordable, high-quality experience.”
And while the business model of dine-in cinemas like Look and Cinergy differs from traditional theaters, Schultz believes that movie theaters in general are improving on providing an experience that makes people want to go out and see films on the big screen on a regular basis.
“I’ve been doing this for 31 years and I think that the pandemic created the first moment where all the theaters and studios, big and small, came together and agreed, ‘Wow, that sucked. Let’s come together and fix it,'” he said. “And I think that’s what changed. We have a summer where studios are putting their best movies forward every weekend with full theatrical windows and theaters committing themselves to better experiences so that all boats rise.”
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