The old conception of a night at the movies has died.
Digital downloads, video on demand and DVD rent-by-mail combined with increasingly theater-like home-entertainment setups are leading more customers to think twice before plopping down $10 for tickets, then shelling out more for flat sodas and stale popcorn, only to be stuck with a theater full of screaming kids and unruly teens. No wonder the grown-ups stay home.
Since hitting a 16-year high in 2002 with 1.6 billion moviegoers and $9.52 billion in receipts, attendance has dropped four of the past five years, according to theAssociation of Theater Owners. Attendance increased to 1.45 billion in 2006 from 2005. Meanwhile, box office receipts came in at $9.48 billion last year. In 2007, things have been a little brighter, with box office gross up 6.2 percent per screen and attendance up 4.2 percent, year to date, but even keeping up that pace will only just get the industry back to where it was five years ago.
How to woo adults back to the megaplex? Enter a slew of new concepts that put a new spin on the old “dinner and a movie” idea. Entrants such as Studio Movie Grill, Movie Tavern and Cinebarre (a unit of Entertainment Group), are building venues that offer some combination of reserved seating, alcoholic beverage service, made-to-order dinners and theaters that include leather seating all while projecting the latest films via state-of-the-art digital projection systems.
“We are primarily an adult experience — we are not cannibalizing from the traditional theaters, but targeting people who are at home watching their DVDs,” says Terrell Braly, the former CEO of Austin Drafthouse Cinemas and now CEO of Cinebarre.
In March, Movie Tavern signed to open a location in Williamsburg, Va., the latest in its plans to open eight locations by 2008 (giving it 20 in all). Studio Movie Grill earlier this month announced plans to open its fifth location in Arlington, Texas as it ramps up an effort to open 75 properties in the next five years. Meanwhile, Regal recently unveiled its Cinebarre concept and plans to open its first location in July.
Retail real estate developers are embracing the movie eateries because they cater to the clientele at the lifestyle centers that have become so popular in recent years. They also make excellent anchors, drawing in neighborhood residents and tourists alike, according to Daniel W. Aston, partner responsible for the Mid-Atlantic region with the Roseland Property Company, a developer based in Portsmouth, Va. Roseland recently signed Movie Tavern in Williamsburg, Va.
Based in, Studio Movie Grill currently operates five locations, primarily in Texas, in communities where annual household incomes top $85,000. The company wants to position itself in lifestyle centers, alongside retail tenants such as Barnes & Noble, and the Cheesecake Factory. “We are interested in working only with developers who create the best retail environment,” says company co-owner and founder Brian Schultz.
Meanwhile, Regal is developing Cinebarre in a joint venture with Braly. The theaters will serve casual food along with beer and wine. The first Cinebarre is scheduled to open at the 493,000-square-foot Biltmore Square Mall in Asheville, N.C., in July, and an announcement is pending on a second unit. If the venture is successful, Regal will expand the rollout to 20 theaters nationwide over the next five years. Most Cinebarre locations will emerge from renovated Regal properties.