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» Film-Tech Forum   » Operations   » Ground Level   » A different business model for DI theatres? (Page 1)

 
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Author Topic: A different business model for DI theatres?
Peter Berrett
Jedi Master Film Handler

Posts: 602
From: Victoria, Australia
Registered: Nov 2000


 - posted 11-12-2005 05:05 AM      Profile for Peter Berrett   Author's Homepage   Email Peter Berrett   Send New Private Message       Edit/Delete Post 
Hi all

I am not a DI theatre owner but today I was musing over the merits of a different business model for drive-in theatre exhibition.

With competition from vcrs & dvd it seems to me that the temptation to stay home and watch a cheap movie must be quite enticing to patrons. Particularly on a night like tonight when it is raining quite heavily. I have just been to my local DVD shop and some very good classic movies can be picked up for $A10 and of course unlike a theatre you get the keep the DVD after you have watched the film. I have also noticed in discussions about drive-ins how some weeknights might only attract a small number of cars.

It seems to me that there are two sources of revenue for DI theatres namely the gate price and the revenue from the snack bar.

So here's my idea. Let's say a drive-in theatre was to make admission free for all cars. [Eek!] [Eek!] [Eek!] This amounts to a big loss of revenue but on the other hand you don't have to pay anyone to man the gate so there are some savings there.

Free films would bring in lots more patrons - hungry patrons who hopefully would spend more at the snack bar.

For example let's say you had a drive-in that attracted 20 cars on a particular night. At say $20 a car admission you would lose $400 in revenue but maybe save $40 in wages by making the film free (i.e no need to hire anyone to man the ticket box). Net loss = $360.

On the other hand, if making the film free attracted an extra 60 cars (total 80 cars) you would have say, an extra 60 x 2 = 120 people (at 2 people per car) who would use the snack bar. You would only need to make 360/120 = $3.00 per person in profit (average) to make up the lost revenue. (Achievable if the food is enticing enough)

In a city like Melbourne the potential is much higher. Free films would cannibalise much hardtop competition as well as pick up some people who would otherwise have stayed at home to watch a movie. One could imagine a bigger drive-in attracting 900 cars full of hungry patrons to a free film.

Is such a business model feasible and if not, why not? Could such a business model be feasible on lighter nights only eg Tuesdays? Are there any Drive-ins that do this?

Alternatively would there be potential for free film nights showing older classic films that might be cheaper to exhibit?

cheers Peter

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Louis Bornwasser
Film God

Posts: 4427
From: prospect ky usa
Registered: Mar 2005


 - posted 11-12-2005 08:19 AM      Profile for Louis Bornwasser   Author's Homepage   Email Louis Bornwasser   Send New Private Message       Edit/Delete Post 
I know you want a serious answer...but in true Film-Tech tradition....I've always said the answer is to let 'em in free and CHARGE them to get out. Louis

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Michael Cunningham
Expert Film Handler

Posts: 186
From: Anchorage, AK
Registered: Nov 1999


 - posted 11-12-2005 09:55 AM      Profile for Michael Cunningham   Email Michael Cunningham   Send New Private Message       Edit/Delete Post 
It sounds feasible enough, if you can get studios to give you films with no promise of a percentage of your gate take. If you're just talking about older films, this shouldn't be a problem.

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Matt Fields
Jedi Master Film Handler

Posts: 538
From: Jackson, Ohio, United States
Registered: Jun 2005


 - posted 11-12-2005 10:46 AM      Profile for Matt Fields   Email Matt Fields   Send New Private Message       Edit/Delete Post 
Here in the states, you would not be able to get new films without charging an admission price. You would be able to get old films, usually for a flat fee. Depending on the studio, the prices range from 150-350 USD. The length of time you could rent them for at that price varies between studios. I have booked them for four days at that price.

Every summer we show free kids movies on Tuesday afternoon. They are popular, we get around 400 people per week, more or less.

All that being said, I am of the opinion that your idea would not work. I just don't think the demand for older movies would be high enough to warrant all of the expenses of operating the business. After all, alot of people are still going to see the movies first run, and alot on DVD. Maybe doing one night a week like we do would work.

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Jack Ondracek
Film God

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From: Port Orchard, WA, USA
Registered: Oct 2002


 - posted 11-12-2005 01:40 PM      Profile for Jack Ondracek   Author's Homepage   Email Jack Ondracek   Send New Private Message       Edit/Delete Post 
WOW... too many ways that this wouldn't work here.

As noted above, the percentage model used to pay for film pretty much eliminates this possibility. A flat-pay model won't work because that means films already on video and I don't think even the current rediscovery of drive-ins would overcome that.

Filling your field with people who've entered for nothing is a drive-in operator's worst nightmare come true... as everyone who's done carload prices knows. The public's regard for the activities they participate in is almost directly connected to the investment they made in it. Give it to them for nothing and that's what they think it's worth. Vandalism increases, your place turns into a great place to party, drink, fight... pretty much engage in everything but what you intended your business to be. Your security costs go up and your business is no fun to operate. No thanks... been there.

Letting everyone in free is no guarantee they'll patronize your snack bar either, though you will be picking up all their trash. That's the kind of place we bought 20 years ago when it was 3 screens of carload admits.

Finally... while they may not be major corporate attractions anymore, drive-ins aren't exactly starving these days. New ones are being built, old ones are being restored, and people are noticing that they're an interesting alternative to the product they get at an indoor theatre. It may not be a national phenomenon, but it's not exactly the end that was being predicted for the industry some 10 or 12 years ago.

I really doubt that drive-in owners are looking for this kind of radical business model. In the end though, I think the response from the studios would probably be enough to settle the matter. If someone here gets around to asking them, let me know how it works out! [Big Grin]

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Peter Berrett
Jedi Master Film Handler

Posts: 602
From: Victoria, Australia
Registered: Nov 2000


 - posted 11-12-2005 07:27 PM      Profile for Peter Berrett   Author's Homepage   Email Peter Berrett   Send New Private Message       Edit/Delete Post 
Thanks everyone

It must seem a strange business model but I am looking a few years ahead and assuming that what is happening to software will happen to movies namely mass piracy. [Eek!] In such an environment is would be difficult sell a night out at the theatre when one can download it for free. I note that theatres attendances have begum to decline. The end is nigh. The sky is falling. The sky is falling.

Sorry scratch that - its just the promo for the upcoming Chicken Little film. [Smile]

Should such a doomsday scenario eventuate I expect that a different business model will need to be found for the exhibition industry more generally. So whilst the distribution companies may not accept a flat fee for new movies now they may reconsider in such a future bad brave new world.

I don't know whether free films attract bad types. The Lunar (my local DI) has carload prices and they attract lots of nice families.

Are your free film nights full of drunked, lewd, untidy bad types Matt?

That aside there are those nights that for one reason or another only attract a few cars to the drive-in. Seems to me that an empty carpark makes little $$$ so some change is necessary.

Fianlly if such a business model did work then it would be good as poorer families could enjoy a night at the movies more often.

cheers Peter

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Matt Fields
Jedi Master Film Handler

Posts: 538
From: Jackson, Ohio, United States
Registered: Jun 2005


 - posted 11-12-2005 11:01 PM      Profile for Matt Fields   Email Matt Fields   Send New Private Message       Edit/Delete Post 
Peter-

Are free movie series is for 10 weeks during the summer (every tuesday). All of the movies are PG or G rated. THe audience is basically families, babysitters, and a couple of day cares.

We don't have any problems with unruly people.

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Peter Berrett
Jedi Master Film Handler

Posts: 602
From: Victoria, Australia
Registered: Nov 2000


 - posted 11-12-2005 11:04 PM      Profile for Peter Berrett   Author's Homepage   Email Peter Berrett   Send New Private Message       Edit/Delete Post 
quote: Matt Fields
[Our] free movie series is for 10 weeks during the summer (every tuesday). All of the movies are PG or G rated. THe audience is basically families, babysitters, and a couple of day cares.
Maybe what attracts the bad types is not so much the price of the film but rather the type of film. Somehow, I can't see a car park load of drug-selling bikies coming to see Finding Nemo.

quote: Matt Fields
Every summer we show free kids movies on Tuesday afternoon. They are popular, we get around 400 people per week, more or less.
Is the snack bar well frequented during such sessions?

If it works for you it might work for some other DI theatre owners who have days when attendance is a bit light.

Jack, one other quick point - here in Victoria we are down to 3 drive-ins. Admittedly the Lunar reopened a couple of years ago which has expanded the mark but just recently Victoria's last rural drive-in at Shepparton closed (Dromana isn't really rural). In South Australia we have seen Port Elliot, Murray Bridge and one of the Adelaide drive-ins closed in recent years. In Queensland Aspley has closed and there were noises being made about one of the two remaining Sydney (New South Wales) drive-ins closing.

In net terms its been downhill still but I hope you are right and we can see a resurgence in the number of drive-in outlets in this country (Australia).

cheers Peter

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Matt Fields
Jedi Master Film Handler

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From: Jackson, Ohio, United States
Registered: Jun 2005


 - posted 11-12-2005 11:21 PM      Profile for Matt Fields   Email Matt Fields   Send New Private Message       Edit/Delete Post 
First off, we are an indoor theatre.

Our concession per cap is about the same as the normal movie going crowd.

-Matt

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Paul Trimboli
Master Film Handler

Posts: 274
From: Perth Western Australia
Registered: Dec 2002


 - posted 11-13-2005 02:20 AM      Profile for Paul Trimboli   Email Paul Trimboli   Send New Private Message       Edit/Delete Post 
Hmm that is an interesting idea you have there Peter. If you could show second run before they came out on DVD you could have an idea. I have read many times that a drive in should be treated as a fast food resteraunt that happens to show movies in the carpark- well that is just how you would need to do this! The resteraunt aspect would need to be top notch to ensure people come for the food and choose your resteraunt over another because you show movies in the carpark!

At a local park films were shown for 3 nights, free for up to 15yrs old, $5 15up and they packed people into the park and I belive they made their money on the candy bar.

As to the sort of people you would attract, it would depend on how you marketed it. If it was just Free movies at (name) drive in then you are going to attract some possibly bogan people:D! But if you marked it as a great place to eat sort of thing and somehow included that the movies are free then you might be beter off.

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Peter Berrett
Jedi Master Film Handler

Posts: 602
From: Victoria, Australia
Registered: Nov 2000


 - posted 11-13-2005 06:56 AM      Profile for Peter Berrett   Author's Homepage   Email Peter Berrett   Send New Private Message       Edit/Delete Post 
Thanks Paul

It is just an idea that sort of popped into my head (I must have too much time on my hands).

It sort of grew out of some study of airline ticket costs and the way that some low cost airlines in Europe make a point of filling every seat by dropping prices (sometimes to the point of virtually giving them away) on the plane because an empty seat is lost revenue. It true also of cinema seats and car places at a drive-in. An empty lot equals an empty pocket.

At this point in time the distribution fee structure may preclude the widespread application of my idea but I think it has some merit for certain drive-ins that have very quiet nights during the week. Maybe by showing some old flicks instead of first release films and letting the patrons in for free a few extra dollars can be made. A sort of win win situation for everybody.

cheers Peter

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Jonathan M. Crist
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From: Hershey, PA, USA
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 - posted 11-13-2005 09:41 AM      Profile for Jonathan M. Crist   Email Jonathan M. Crist   Send New Private Message       Edit/Delete Post 
As the operator of several first run as well as discount theatres over the years there is one rule which seems to prevail which I parphrase in pig latin: "Cheepus in unius, cheepus in allius"

On the disount night at most full price theatres the concession per cap usually goes DOWN from the norm. Why? Because those who seek out the disount price also do not buy as much.

If you let the people in for free they will just bring their own food.

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Jack Ondracek
Film God

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From: Port Orchard, WA, USA
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 - posted 11-13-2005 11:02 AM      Profile for Jack Ondracek   Author's Homepage   Email Jack Ondracek   Send New Private Message       Edit/Delete Post 
quote: Peter Berrett
Jack, one other quick point - here in Victoria we are down to 3 drive-ins.
Sorry to hear that, Peter. I don't know anything about how the film industry operates there, nor do I know where the drive-in fits into your culture. Over here, it fit right in, as American GIs came home from the war, bought homes... and cars... lots of them. We built miles of freeways, and as it became clear that we liked being in our cars, the business community scrambled to find ways to give us things to do in them.
That pattern may not have followed in other countries to the degree it did here, considering we once had over 5,000 drive-ins.

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Peter Berrett
Jedi Master Film Handler

Posts: 602
From: Victoria, Australia
Registered: Nov 2000


 - posted 11-14-2005 02:28 AM      Profile for Peter Berrett   Author's Homepage   Email Peter Berrett   Send New Private Message       Edit/Delete Post 
Dear Jack

Here in Australia we have a similar car culture to the point that recent fuel price increases have seen our limited public transport reach overcrowding and there being calls for more public transport. Despite this our State Government seems hell bent on building more and more freeways.

Even though many of our cities have great weather (Perth, Adelaide & Brisbane in particular) and there are lots of cars our drive-ins are down to single figures in most major cities.

i.e

Sydney - 2
Melbourne - 2 (well three if you count Dromana
Brisbane/Gold Coast - 1
Perth - 1
Adelaide - 1
Darwin - 0
Hobart - 0

And yet the Lunar has reopened in recent years with 3 screens (maybe 4 one day) here in Melbourne so there is some hope.

We also have a Moonlight Cinema operation in our summer season which has been going a few years.

I can't fathom why we don't have more drive-ins.

cheers Peter

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David Kilderry
Master Film Handler

Posts: 355
From: Melbourne Australia
Registered: Sep 1999


 - posted 11-14-2005 04:06 AM      Profile for David Kilderry   Author's Homepage   Email David Kilderry   Send New Private Message       Edit/Delete Post 
Jack, we are down from over 350 drive-ins to less than 30, probably closer to 20. The Australian way of life is not dissimilar to that in the US, but our drive-ins have certainly suffered for many reasons. High land values, the VCR and lack of investment (until the mid 1990's no drive-in in Australia had more than two screens).

To some extent the fact that major chains controlled most large city drive-ins was to their detriment. The large chains sold the drive-ins off to finance multiplex expansion in the 1980's. Many closed as profitable locations, but a good deal more money can be made from a rented multiplex than a capitol intensive (land) drive-in theatre.

In country areas, most drive-ins closed to be replaced by smaller multiplexs or twins, triples, quads etc. The cinema business operates much the same here as in the US, with all the major studios having offices here.

One of Australia's largest drive-in chains was owned by 20th Century Fox, Hoyts. MGM also had a chain of drive-ins here. Greater Union drive-ins were half owned by Rank of the UK. The largest drive-in circuit was operated by Village. Until recently they were the largest cinema chain in the world outside the United States. These days they account for a large percentage of the films made at Warner Bros in Burbank (I'm sure you have all seen their logo at the start of many films Matrix, Oceans 11, Charlie and Chocolate Factory and dozens more). They started with one drive-in here in Melbourne in 1955.

We still love our cars and freeways, in fact you can still buy large V8 cars here and we even export the things; take a peak under the hood of a Pontiac GTO and you'll see it is an Australian made GM Holden Monaro with a Pontiac nose transplant!

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