Looking to buy a movie theater chain?

No, neither trying to be funny, nor use sarcasm and irony in the headline.??You’d be forgiven to think so, however.??Confusion reigns and it’s further perpetuated by the majority of media who once again smell blood and predict the death of movie-going in theaters (which they have been doing as long as I have been in the business and that’s a loooong time). “Theaters are opening soon!” “Oh no they’re not...” I guess we can assume that theaters will open at SOME point in the future, but will audiences be lured out of their lairs by a combination of cabin fever and genuine affection for what is still the only larger than life entertainment form, only to be greeted by a wafer thin offering of releases? Which will be the first “must see” all-audience feature rewarding the first audiences to brave the pandemic dangers and get their asses to the movie theater? “Tenet” looks amazing but may not be the movie to do so, and it was opening at the so-and-so date. Then it wasn’t. Most potential customers have no idea when theaters will open again and which films will be playing when and where.??One big release, even if it’s successful, will not be enough to restart a movie going habit, and numerous studies show that consumer habits can change dramatically. And quickly. Studios can’t collude (duh!) but if there was ever a time for the captains of industry to sit down and construct the most powerful combined release slate, it is now. But that doesn’t seem like the case. For several obvious reasons, of course.

Also, maybe I blinked and I missed it, but what exactly is the big sell to get consumers excited about getting back into the dark halls of entertainment magic? Is the most effective selling point “Hey, we’re cleaning the rest rooms much better now!”? “Our lobby is cleaner than before the pandemic!” “You won’t die watching a movie in our theaters!”. These things should be bloody obvious and not something to be used to market the big screen movie going experience. If the audience don’t know by now that they will be safe, they won’t even begin to think about getting back into movie theaters.

I get it. We all get it. Theater owners need to make money to survive. Only way to do that seems to be to kickstart the business as soon as the virus and our incompetent leaders lets us.??And it goes without saying that content creators and suppliers, e.g., studios, distributors and production companies, need the traditional distribution arteries unclogged to maximize their revenue and profits. There’s only so much you can make selling your wares to the streamers, and I haven’t seen much written about how digital and physical home entertainment is taking an enormous financial hit (and before you start protesting – there was still mileage in physical home entertainment before the pandemic hit).

But if running a theater chain was hard before the pandemic, it surely must be hell now? Many exhibitors will tell you they were operating on razor thin margins even before the current crisis (well, it’s what they told the distributors at least…). It sure won’t be a walk in the park (literally nothing is today) with new operational procedures; including a complete overhaul of cleaning and disinfectant intensity and scheduling; new safety measures with plexiglass or glass screens to handle all forms of financial transactions; and concessions sales will be way down and have to be packaged and sold in new ways. All of this costs a lot of money for chains that may already be strapped for cash after this extended hiatus in operating – and it’s all coming off the back of recent investments in upgrading theaters, technology and services for a more demanding consumer. And it also means re-training staff.??Add to this a forced reduction in capacity – and that’s for a business which already was far from reaching capacity with the few exceptions of mega weekends such as the “Avengers: Endgame” opening.??Then there’s the need to heavy push a move to online reservations.??At least that’s good news, but maybe now’s the time to get rid of the ghastly “convenience” fee you pay when booking online. As a consumer I am actually supposed to be paying for the convenience of exhibitors not having to hire as many staff members manning the box office? Where are the protests in the streets?

So if you haven’t stopped reading yet, maybe you see the same opportunities that I believe I see. Also, apologies are in place at this point to exhibitors and smart industry people in general who have figured out what I have to say already – or even smarter solutions. Hate to think I have to teach grandma how to suck eggs.

I see a great future for the spaces we now call movie theaters or multiplexes or cinemas, but to make that future a reality you have to double down, and you have to be prepared to not rush to fully open for business before you have done a few key things, although they can be done in a fairly timely fashion.??First of all, think ahead.??What should your business look like to truly thrive; not next week or next month, or even later this year, or even 2021;??but what should it look like in 5 years and in 10 years. What is your strategic vision for what it HAS to be to be successful in a changing world – where there are big opportunities ripe for the picking? If you can see it, you can make it happen. Tech, and hell, any and all businesses getting Wall Street and investors hot under the collar have been doing this forever and they are in the growth business, building for the future. Whilst I’m not always a fan of “disruption” as it sometimes destroys more than it creates, this is the time to swallow some of those bitter pills.??

Consider this combination of challenges and opportunities. First think about the name of the business venue: “Movie Theater”. Just doesn’t sound right anymore, does it???It so undersells the potential. This is the only entertainment form that is literally larger than life. This is the biggest screen. Also arguably the most effective entertainment form in generating true emotions. What is also true is that whenever theaters finally open, this out-home-home entertainment business will probably be the first, or at least amongst the earliest, to offer consumers that are hungry for a life outside their home an opportunity to escape – literally and figuratively. The true “live” entertainment industry is hemorrhaging money. Broadway will not open before 2021. In a recent article in?Variety?Marc Geiger, until recently the head of music at WME, and one of the founders of Lollapalooza, says that he doesn’t?expect bigger live music gigs and festivals to get going until 2022 at the earliest. There goes my plans to return to Burning Man next year…

Most theaters and chains have already dabbled for many years with what is called “alternative” programming, e.g., opera, ballet, sporting events, gaming.??But there’s more and stop being "alternative" and go big and mainstream – live music concerts being streamed, global event screenings/premieres of movies or opening episodes of TV series, conferences, conventions, product launches, bigger focus on gaming events, etc. etc. Just one idea off the top of my head - how about partnering with UFC and get them – and your theater chain - another revenue stream. Definitely “Better than being there in person” if you see who's normally in the audience during the live events... Anyone knowing the history of sports transitioning from live-only to being broadcast as well knows that most sporting associations were petrified that the fans would stay home if they could just watch it on TV – or any screen today – but that didn’t happen at all. It only grew the fandom and audience bases.

So, first idea is to rebrand the whole idea behind the entertainment venue. Can't come up with the big copyline myself right now but there are apparently people who do this for a living. But this is what it is: This is the biggest experience. The biggest screen. The biggest action. The biggest emotions. Any form of entertainment. No longer just movies.

Sure, we may get a vaccine before long, but how late will it be to turn around consumers perceptions that may really have grown negative over time? And who’s to say we won’t see a new strand of Covid: "COVID-21. The sequel. It’s back and it’s pissed."??Health and safety still has to be top of mind and social distancing will still have to be at least an option for people who needs that blanket even after the worst is behind us.

Second idea is to throw out your seats. I know, they were just purchased. Maybe they can be repurposed, because modular seating is the way forward. That way you can sit with the people you came with whilst being socially distanced, thus you still feel you’re having a “night (or day) out” and that you are “socializing”.?In addition you can open up the seating area for other purposes - gaming, product launches (bring in the next big electric car launch), etc.

Third - add revenue streams to make up for potential shortfalls coming from capacity caps and restrictions when it comes to concession by adding a proper retail section – and don’t only peddle movie stuff. Figure out what binds your audience culturally by venue and get into more of a lifestyle offering. To start, do something very easy and look at Apple and Amazon stores for inspiration. Next step is of course to sell stuff that actually appears on the screen, but Instagram will do that on a much smaller screen first, so let’s just steal what they’re coming up with and make it bigger.

Again, time to be aggressive in building a sustainable business, rather than the reactive culture of yore. I felt that, for example, Alamo Drafthouse and iPic were moving in the right direction with the former being set up as a social space with movie watching tagged on and the latter offering a whole night out with good food and drinks. But will these concepts survive in their current forms (iPic was struggling even before we all started struggling). I loved both concepts and Alamo's in particular with their cool hanging out space, video games, spot on retailing, classic movies, themed night and it was perfectly suited for the neighborhood it is located in – no surprise that their first LA venue is in hipster epicenter Downtown. But then again we’re all hipsters now – living in PJs, sporting “interesting” hair and facial hair, day drinking, pretending to be creative, etc….

I have also been baffled for a very long time by the fact that the industry – and this includes distributors – haven’t managed to crack the huge potential in selling additional, future, visits to the consumer when they’re in the theater having a (hopefully) great time. After the movie it’s straight out to the street. When you finish a ride at Disneyland or Universal Studio, for example, at least they force you to exit through the gift shop…

But what about the movies, you ask? Especially if you are a creator, producer and distributor of feature films. What about us? Our content and our movies are what built your movie theaters. And to be fair, vice versa to some extent of course.??No worries whatsoever. The movies will have an even more exceptional venue to be showcased at – and that includes everything from the biggest budget blockbusters, to more targeted or specialized fare. Sure, this may/will erode the mid-market (has been happening for years, so nothing new here) but there are great ways to see those stories at home or on the move. But take AVATAR 2 as an example as it will be an even bigger event when it comes out (whenever that may be...) AND it should (and will, I hope) be showed in phenomenal, immersive 3D. This will then be welcomed by consumers again since it will once again be a truly unique experience.??3D was destroyed by greed and shitty conversions of movies that didn't even deserve to be made. Just one additional thing that could be rebuilt with even greater technology and creativity to once again be a viable option to see a movie at a theater (or whatever the venue ends up being called).

Also, if you can’t beat your enemy, join them. Make deals with non-studio affiliated streamers, e,g., Netflix, Amazon Prime et al, to premiere their high profile/budget/concept features (or series episodes) two weeks in advance of the streaming to be seen “for free” as part of the subscription to the service.?

Experiment with new, more immersive, ways of telling stories on the big screen. There’s a really interesting startup called CtrlMovie that are producing “choose your adventure” features where audience members instantly vote on their phones to guide the characters and storylines through a large number of alternative narrative paths and endings. These releases can become truly exhilarating social events which doesn’t need people sitting close to each other to be enjoyed. Formats? Who needs them. What is a format anymore anyway??Heard about TikTok? Did anyone actually see “The Irishman” in one sitting? Took me three nights to finish it.??Guess that made it a mini-series. Or a warp-speed released trilogy.??One of best thing I have seen over the last couple of year on Netflix was “Love, Death + Robots”.??Each episode anywhere between 8 to 17 minutes long.??

Just a quick anecdote to illustrate the idea of breaking the fixed idea of what a “movie” is. When 20th Century Fox was actively developing a feature version of the hit TV show “24” I pitched the idea of calling it “6” and have three 2 hour features - each with self-contained story arcs but also forming part of the overriding 6 hour arc - all being released over a 12 month period with the Home Entertainment release of each installment just preceding the theatrical release of the next episode. I wanted it presented in real time - like the TV series - to keep the brand and story identity whilst making it suitable for the big screen. Wrong time I guess, but then again a movie version never happened since the only material being considered was a sub-par “Die Hard” type action film with none of the exciting and ground breaking time elements of the series.??But I digress…

People are eager to get back to some sense of normalcy, that’s a given.??I don’t know how many polls I have seen espousing audiences supposed eagerness to step back into the wonders of the dark auditoriums.??Well if you believe in polls, you believe anything.??If the industry simply presents and offers a “cleaner” and “safer” but otherwise shittier experience than before, what percentage of heavy movie theater goers will come back – and at what frequency?

The future is already here. The world changed in 2020.??Scary? Sure, if you want it to be, but after every big global crisis – whether they were world wars or depressions/recessions – pragmatists and visionaries worked together and helped usher in an even better world to replace the one devastated by cataclysmic events. Now if we could only use this opportunity to also fix the overall infrastructure, and in particular the traffic, in Los Angeles… I’ve got a few ideas, but that’s for another slightly incoherent ramble.?