Walking into a movie theater these days gives you a we’re-not-in-Kansas-anymore feeling. No longer do people say, ‘Two tickets, please.’ They’re adding, ‘I’ll take a Taco Bell Combo #1, a Baskin Robbins banana split, and some tokens for the video arcade.’

The movie business is booming, thanks in part to the overall healthy economy, and movie exhibition companies like Cineplex Odeon and Famous Players have been reaping the benefits since 1996 when they embarked on a major expansion spree.

In June 1996, Cineplex announced its plans to spend approximately $145 million to expand its North American presence by one-third. Cineplex has undertaken 329 new theaters and expansions since then. With its recent announcement of plans to merge with Sony Retail Entertainment’s Loews Theatres, the combined company – Loews Cineplex Entertainment – will have over 2,600 screens in approximately 460 locations in North America. (Howard Lichtman, executive vp of marketing and communications at Cineplex, says the deal has u.s. Justice Department approval, and although no date is set for the closing, it may happen sometime in May.)

Famous Players’ $300-million, three-year expansion program – started in 1996 – has been going like gangbusters. It is adding 25 new theaters with 247 screens and 71,250 seats to its Canadian circuit. Famous Players currently has 106 locations with 550 screens. In 1998, 14 new locations with a total of 145 screens will open in Ontario, Burnaby, b.c. and Winnipeg.

The exhibition companies are serving previously ‘underscreened’ markets.

Lichtman cites a healthy box office, favorable real estate, affordable leases, and more available loans as contributing to the recent boom.

Experimentation in offering a diverse variety of cinema options has gone from discount seating to upmarket service, such as Cineplex’s VIP Screening Rooms at the Varsity Cinema in Toronto. The premium ticket price ($12) vip rooms have been doing brisk business. Since the April 2 opening, tickets for weekend vip screenings have been selling out – the four vip auditoriums seat 110 – and based on seating capacity, weekdays are ringing in double the business of the other eight Varsity auditoriums. With its recent $7-million expansion, the Varsity now has 12 theaters, and a total of 2,110 seats.

Other major Cineplex expansions include what is claimed to be the largest cinema complex in Canada, The Latin Quarter in Montreal, which opened in December ’97. The Latin Quarter is a 90,000-square-foot facility with four levels and 17 auditoriums. It has a pizzeria, a fully licensed bar, a laser show, a projector showing continuous movie previews on the lobby walls, a cafe and a games area.

Famous Players recently started selling advertising to be shown after its movie-trivia slide show, which already has advertising.

‘We’re always looking for additional resources without raising the ticket prices,’ says Dennis Kucherawy, vp, corporate public relations at Famous Players.

Brand identification

A challenge facing the exhibition companies is helping consumers distinguish between all these new moviegoing options. Brand identification has become crucial.

It wasn’t long ago, according to Kucherawy, that people just went to whichever theater was playing the film they wanted to see. Now with theater ‘brands’ like Famous Players’ SilverCity and The Coliseum – which also have Sega Playdium’s Techtown, a video arcade inside the lobby – ‘that’s a challenge that’s being met,’ Kucherawy says, adding that not only do people choose the movie but they are choosing the location by name.

imax figured into this brand identification when it signed an agreement with Famous Players in February for 10 IMAX 3D theaters to be built in new and existing Famous Players theaters in Canada over the next five years. The deal will nearly double the number of imax theaters in Canada.

The majority of the theaters under this agreement are expected to use the IMAX 3D sr system, a smaller theater system designed primarily to be located in multiplexes, although some higher-traffic locations may use the larger IMAX 3D system. This agreement includes an exclusivity clause stipulating that imax cannot build in multiplexes other than Famous Players in Canada.

The first imax locations in Famous Players theaters will include the $29.9-million, 100,000-square-foot Colossus scheduled to open in November in Vaughan, Ont. It is being designed as a space ship and will have 18 screens. Another location will be the $100-million, 450,000-square-foot Paramount Theatre at Festival Hall in Toronto, scheduled to open in spring 1999.

‘The partnership allows us to bring IMAX 3D to the masses not just urban centers,’ says Brian Weisfeld, deputy to co-ceos and managing director of imax theaters and communications, from his office in New York City.

The expansion of imax theaters, and the new imax technology that makes creating large-format films more economical, Weisfeld says, will entice more independent producers to make films – and more commercial ones – for these theaters. (Coscient Group and Caisse de Depot announced on April 9 that they will create a large-format film production company. Due to the ‘explosion of screens, there’s a demand for large-format films,’ says Coscient spokesperson Marie-Christine Dufour.)

‘Our core audience of family entertainment won’t change,’ says Weisfeld, who acknowledges the 15 to 25 age group is not imax’s ‘historical strength.’ But he expects new theaters and new movie offerings will broaden the demographic. ‘Eighty percent of people who go to imax say they will come back, and 99% say they will recommend it to a friend,’ he says.

Last year, Imax Corp. signed contracts for 60 imax theater systems worth a total of $132 million, double the amount from 1996, and established relationships, similar to Famous Players in Canada, with six commercial distributors in the u.s. – Cinemark usa, Edwards Theatres Circuit, Empire Theatres, Krikorian Premiere Theatres, Marcus Theatres and Regal Cinemas – to build multiplexes in the States.

Maintaining the Canadian content

The question for Canadian film producers and distributors is whether Canadian and independent films have a place in these complexes.

Famous Players expects to open a theater on Vancouver’s Granville Island by spring 1999, which will offer commercial, first-run movies; Canadian and international independent and art films, educational and multicultural presentations; and exhibitions, festivals and theme weeks honoring local filmmakers and artists.

Kucherawy says that some of the smaller, existing theaters have been (and will be) turned into art houses or discount houses, such as the Lumiere in Toronto, run by Vancouver’s Festival Cinemas as part of a strategic alliance with Famous Players.

Famous Players also started a Marketing & Promotions Fund in 1994 to help distributors cover those costs. Beneficiaries of the fund include The Sweet Hereafter, Crash and Margaret’s Museum.