Screen wars: at a theatre near you

Expansion in theatrical exhibition is spreading across Canada and the u.s. like a prairie fire on a windy day. Between Canada’s two major exhibitors – Cineplex Odeon and Famous Players – plans to build, refurbish, update and get interactive are rolling out in 1995 with startling frequency.

Earlier this year, Cineplex announced a proposed merger with u.s. exhibitor Cinemark. While the deal may fall through now that the Bronfmans – through mca and CRB Foundation – own a controlling share of the company, the combined entity, Cineplex International, would be the largest North American theater chain with 519 theaters and 2,839 screens in North America and Chile.

As it now stands, Cineplex is the country’s largest exhibitor with 355 locations and 1,624 screens in the u.s. and Canada, or 6% of the North American total. The company announced earlier this year a us$50 million expansion/refurbishing plan to build 250 screens over two years.

The Toronto-based exhibitor has made at least one announcement per month in 1995 about expansion plans. For starters, there’s a new, seven-screen multiplex in Hamilton, Ont. with 1,700 seats, plans to build a new complex in Surrey, b.c. with a 130,000-square-foot home retail store and a 10-screen, 50,000-square-foot multiplex with 2,400 seats, and Washington State is getting one new and one refurbished cinema, both with video games centers.

News that North American audiences will get more screens is sending a message that the theatrical business is no longer the tired old dog it once was.

Although box office growth in the u.s. was reported at a mere 4% for last year, the increase is deceptively low without a look back at the last few years of exhibition activity.

In the early ’90s, feature film exhibition was coming out of a down cycle, leaving few new theaters and minimal updates in its wake. 1993 (the year of Jurassic Park) was a banner year with us$5.15 billion in box office receipts. Word was that it could not be readily beaten or even matched. When ’94 topped 1993, albeit by a small percentage, the movie theater business suddenly had room to grow.

Howard Lichtman, executive vice-president of marketing at Cineplex, says there is ‘an evolutionary process’ behind the push for more screens.

‘From a Cineplex perspective, for several years we just didn’t have the financial resources to build. From a more macro economic perspective, the real estate market has plunged sufficiently that you can now strike real estate deals that are reasonable from a movie theater perspective. It’s a good time to build.’

Lichtman says there is also ‘a general bullishness’ about the exhibition business on the part of both developers and people in the industry.

‘People believe exhibition will be a healthy business, so they are willing to invest in it in the form of putting money into new theaters.’

In addition to building new theaters, there is a need to update older theaters with new facilities, the latest technologies and often additional screens. Also, movie theater locations must follow population shifts as they continue to spread further from city centers.

Famous has a national count of 108 theaters, 462 screens and 151,068 seats, and is equally aggressive on the expansion front.

A new eight-plex in a suburb of Montreal is on the horizon as are an additional six screens in Quebec City, expansion of Surrey’s four-plex to 12 screens, new facilities in Edmonton and Winnipeg, and new theaters in LaSalle, Que. and Kelowna, b.c..

Famous president Joe Peixoto predicts Famous theaters in the future will house 10 to 12 screens as part of a cyclical strategy. ‘We’ve found that large theaters that offer more menu of product really do stimulate attendance overall. SoÉthere is the need to create the theater that creates the attendance.’

With the surge of new screens comes a demand for new and diverse product, ranging from small art-house pictures to blockbusters. Lichtman notes there are more films available now than ever before and the audience target crosses ‘the whole spectrum.’ Last year in the u.s., the 40-plus audience base accounted for 36% of all moviegoers. Add to the mix an increasing list of family titles and the broader audiences the ‘small’ films are reaching.

John Bailey, executive vice-president of Famous, pegs the baby boomers and their offspring as the mainstay of increased audience attendance.

‘The boomers have a habit of going to the movies regularly, but it’s not the same kind of picture that would have interested them before. So a lot of what were thought of as smaller pictures are not that small anymore.’

Some of these titles are well-known, Four Weddings and a Funeral, Like Water for Chocolate, but smaller films such as The Secret of Roan Inish are also benefiting from this trend.

Will the increase in screens mean more production? The consensus from these Canadian exhibitors is they are playing catch-up with production output rather than looking to trigger it.

Says Lichtman: ‘I think that the expansion in screens will provide a better return on the investment for producing films and it keeps the industry healthy. I don’t think it will mean more production.’

What does it mean for Canadian production? Lichtman won’t comment except to say, ‘The issue for Canadian film for the most part is not screen availability, it’s the want-to-see factor among the audience base.’

Speculation is the increased demand to fill these new screens may put distributors in an advantageous role and thus alter the relationship between distributors and exhibitors.

Peixoto and Lichtman disagree, saying it’s a partnership and they don’t expect trouble. ‘If it gets too expensive they don’t get revenues. If it’s too inexpensive they can’t afford to make pictures,’ says Peixoto.

Strategies to fill the additional seats include investments in digital sound technologies (dts, Dolby sr-d and Sony sdds are the latest), new projection technologies, better food concessions, atm’s and, down the road, phone and possibly Internet services for selling tickets.

The bottom line is to make it easier for the public to go to the movies while creating an environment that is substantially different from the home video experience. Peixoto says that’s where the future lies. ‘The more we can do in terms of enhancing that experience, that’s how we drive people.’

The omnipotent multimedia – specifically interactive games and films – is another area exhibitors are investigating.

Cineplex’s Hamilton Mountain multiplex has a video arcade that Lichtman says is a smaller version of the company’s future games strategy. It’s also a first for Cineplex.

Both Lichtman and Peixoto say they are looking into simulators and virtual reality games, but on a very limited basis.

Ridefilm, a subsidiary of Imax Corporation, is presently involved in negotiations with three multiplex chains in Canada and the u.s. regarding installation of Ridefilm simulators in multiplex theaters.

The system and installation combined sit at about a us$600,000 investment. The system is designed to fit into existing retail spaces with a ceiling requirement of as low as 14 feet and is about 30 by 30 feet, thus making it available outside a theatrical configuration. But the marriage could be made in heaven.

Ancillary benefit

‘There are certain advantages for the multiplex company that makes their economics different than ours,’ says Ridefilm vice-president Bernard Plishtin. ‘They get ancillary benefit to having an increased draw into a location and they can sell more popcorn and more feature tickets.’

Plishtin says he hopes to see the rides in a dozen or more multiplex locations for each theatrical chain. Each deal would come with an arrangement for geographic exclusivity, he adds.

Multiplexes are showing interest in edutainment programming that would attract school groups in the daytime, and educational institutions (such as museums) are considering switching from education to entertainment in the evening.

It all means more production for Imax, and part of the game is creating educational films for the simulators. ‘We’re the first people to do that,’ says Plishtin.

Ridefilm is also installing the simulators side by side with Imax theaters (where they are called Imax Discovery simulators). Plishtin started selling these combinations last fall. It’s going well and edutainment is key to its success, he says.

Ridefilm is looking at a couple of Imax sites in Toronto and in Vancouver as simulator locales, but Plishtin cannot comment further.

Vague plans aside, this wave of the future looks to be no further than just around the corner. Ridefilm simulators may be installed in the Ontario Science Centre (locale of a new Imax theater) and in the houses of Famous Players and Cineplex Odeon as soon as 1996, once again altering the constantly evolving shape of theatrical exhibition.