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July 11, 2006
Pressure at the box office | Independent cinema owner John Moore fights to keep ticket prices low while facing infrastructure improvements and industry upheaval
By Samantha Depoy
When John Moore opened Farmington's Narrow Gauge Cinemas in 1995, DVDs wouldn't be available to American consumers for another two years, piracy typically meant robbery on the high seas, and moviegoers at his theater were paying $5.00 a ticket to see Val Kilmer don the bat suit in Batman Forever.
Eleven years later, DVDs reign supreme and movie pirates are distributing films often before they hit theaters. Moore, like every theater owner, sees these developments as a threat to his business. But in other industry trends he's swimming against the tide: While theater admission prices have surged nationwide, a ticket to see Christian Bale's turn last summer in Batman Begins would have cost Narrow Gauge Cinemas' patrons the same $5.00 they spent to see the franchise's previous two flicks. Same for admission to any of this summer's crop of Hollywood blockbusters.
Around the state, theater chains such as Flagship Cinemas and Regal Cinemas charge anywhere from $7.00 to $8.50, depending on the location. And even independent operators Colonial Theater in Belfast recently raised its prices for the first time since 1995 to $7.00 for adults. By comparison, Moore charges $5.00 for adults or $3.50 on Monday nights and matinees ˆ perhaps the lowest in the state for a theater that shows first-run films. With a medium popcorn topped with real butter selling for $3.00 and a medium soda for $1.50, a couple can head out for a movie date for $16.
As the owner of the only movie theater within 25 miles, Moore could raise his prices, but his decision to keep them low is a deliberate ˆ at times painfully so ˆ business strategy.
"Unfortunately, what we see nationwide is that theaters keep pricing themselves out of business. They think they'll raise their profits by raising their prices, but that's not working," says Moore. "What we lose on $7 and $8 tickets, we make up in volume. My theaters are in two of the poorest counties in the state. We're not going to charge high prices for people to go the movies ˆ we just can't afford it."
While western Maine moviegoers love his decision to keep prices low, it hasn't come easy. As Moore strives to equip his theaters with the latest technology and comforts, he's had to find ways to cut costs without cutting corners. He's even branched out to buy and renovate a classic theater in nearby Skowhegan. The result is a longer working week for him, and the formation of stronger partnerships with other local business owners in a quest to keep his box office busy. Nevertheless, as a sometimes helpless bystander in an industry that is undergoing a massive (and pricey) metamorphosis, Moore makes sure he never settles too far into his seat.
Dinner and a movie
Moore, a liberal arts graduate of Colby College, made his first foray into film in Farmington in 1986, at age 21, when he became manager of the State Theater on Broadway. Three years later, he bought the two-screen theater and ran it successfully until 1995, when he relocated a stone's throw down the street into a new building designed to look like an old train depot.
Skeptics forecasted the new theater's downfall, contending its placement below the downtown's well-trodden shopping district ˆ on what was once the Sandy River & Rangeley Lakes Railroad yard ˆ would put it out of sight, out of mind and out of business. But Moore says he knew it would be more affordable to have a seven-screen cinema off the main drag, and that if he offered a good product at a good price, the customers would come.
Tom Marcellino, owner of The Granary, a restaurant and pub near the theater, is one local business owner grateful for Moore and his methods. Narrow Gauge Cinemas partners with The Granary and another downtown eatery, The Homestead, to offer $3.00 movie tickets with meals. Marcellino says as a result, it's not uncommon for diners to say they've come from Augusta, Waterville or even further to enjoy dinner and a low-cost movie. "[Narrow Gauge Cinemas] is a cornerstone of the community and one of the things that keeps downtown Farmington so vibrant," Marcellino says. "I know we wouldn't be as popular or as busy as we are without him there. He's brought a ton of business this way."
Gift certificate sales are another component of Moore's strategy to ensure his box office will deliver when Hollywood doesn't. A combination movie pass at Narrow Gauge includes one admission, a small popcorn and a small soda, and sells for $6.00 each or $55 for 10. With complaints by American moviegoers that films aren't what they used to be, Moore says, gift certificates are a way to pull people in when the plot lines don't. "Maybe it isn't the best movie, but it's already paid for so you don't feel bad about going to see it," he says.
Moore also cites the presence of the University of Maine at Farmington as a boost for his business. With 2,000 students just a short stroll from Narrow Gauge's steps, he says he is able to offer 9:00 p.m. shows that other small, independent theaters aren't successful with. And while summer is the busiest season, the college crowd helps his returns stay relatively stable during the year.
Still, in order to maintain low ticket prices, he's always looking for ways to cut his operating costs. Four months ago, he opted to buy and book films himself instead of having a professional buyer work on his behalf ˆ and his expense. Although he declined to say how much money the move has saved him, Moore says it's likely the best decision he ever made, because it puts him in control of what his customers see. While the buyer may have known the industry, he says, no one knows the whims and wants of western Maine moviegoers better than he does.
That's why, when the historic one-screen Strand theater in Skowhegan went dark for nearly two years, Moore took a risk and bought it in 2003. Although he knew that reopening the circa-1929 cinema would put a dent in attendance at the Farmington theater ˆ as Skowhegan-area cinema patrons would have a local option rather than making the 25-minute drive to Farmington ˆ Moore explains he'd rather share an audience between two theaters than risk losing a portion of his customers to another owner who might have purchased the Skowhegan theater.
While keeping the Strand's historic interior intact, including balconies, light sconces and tin ceilings, he built an addition housing two new screens and updated all of the theater's systems, from heating to seating. As Skowhegan embarks on a revitalization effort, Moore hopes his cinema will be one of the downtown's anchors.
Skowhegan officials feel the same way. Jeff Hewett, Skowhegan's economic and community development director, hopes the Strand will convince local businesses owners to keep their doors open later to cater to movie patrons looking to dine and shop before their show. "He took a big leap when he did his project and everyone else started stepping to the plate after that," Hewett says.
As in Farmington, tickets in Skowhegan are only $5.00. Though he declines to disclose revenues of either theater, he says the Strand's numbers "are showing that while it's not a home run, it's a solid hit." And he adds, "They can only go up as good things happen to the downtown."
Crossing the digital divide
Even without the threat of nearby competition, Moore has felt compelled to update his Farmington theater. Two of the auditoriums have recently been converted into stadium seating, and one more is due to be revamped later this year. That's because Moore believes it's important for customers to see profits being put back into the business, and that offering the most current amenities would "make it very painful" for another theater to open in Farmington.
But while he is cautiously optimistic that another cinema won't light its marquee in Farmington or Skowhegan, Moore is on the edge of his seat about what lies ahead in an industry he describes as "in upheaval." Earlier this year, director Steven Soderbergh ˆ the Oscar-winning director of Traffic and hits like Erin Brockovich ˆ gave the industry minor palpitations with the release of Bubble, which hit both theaters and television on a Friday and was released on DVD a mere four days later. Piracy also is a growing problem, with copies of films illegally making their way onto streets and the Internet, sometimes even before the movie makes it to theaters.
Terri Westhafer, a Colorado-based cinema industry consultant and the past president of the International Cinema Technology Association, describes piracy as an epidemic that is hurting everyone in the industry. But she says the current transition from film to digital cinema projection technology has the potential to curb this problem through scrambling and encryption.
The cost of converting to the emerging technology is worrisome for Moore, however. While costs vary for purchasing the digital cinema equipment itself, the National Association of Theater Owners projects it could cost theater owners between $2,000 and $10,000 per auditorium, per year, to maintain digital projectors and other equipment.
Only about 550 of the 38,000 or so movie screens in the nation have made the switch so far, Westhafer says, but she stresses it's a critical move that others, like Moore, must make. Still, financing such improvements is tough for theater owners, who actually make their money on concessions rather than ticket sales. But there are many tactics to boost revenue beyond charging more for Snowcaps and soda. One way is through pre-show on-screen advertisements, which is now a $500 million annual industry. Moore recently got in on this moneymaking trend and admits it's a "great revenue stream," but as usual, declines to give specific numbers.
In order to succeed, though, independent theaters must find a niche, says Westhafer. That could mean offering restaurant-style food service during movies or owning a vintage theater like the Strand in Skowhegan. "I think it's a really good time to be an independent theater owner. They've got more flexibility than they've ever had," Westhafer says. "My advice to independents is to know your market and know what you are good at and what you love to do."
For Moore, that means offering all the cutting-edge amenities of a big theater chain. But with cell phones chirping and kids kicking seat backs ˆ both annoyances Moore says he and his staff fight aggressively ˆ it's not surprising that some people would rather watch movies in the comfort of their own home. "Ultimately, theaters don't control their own destiny. If film companies can bypass the theaters and still make money, they will," Moore admits. "There is a lot of discussion right now about whether theaters will be viable in the future."
Michael Hurley, owner of Belfast's Colonial Theater, is less pessimistic. He says the industry will endure because there will always be a customer base that wants the experience of watching a movie in a theater. "When we opened in 1995, it was before DVDs, the Internet, TiVo, Video on Demand and cell phones. Today, there is an endless array of new media choices but movie theaters have been able to survive," he says. "People have been predicting our death since the advent of radio."
As a fellow independent theater owner, though, Hurley teases that Moore is "crazy" for keeping his prices so low. He recently raised ticket prices at his own theaters from $6.00 to $7.00 to offset higher costs such as rising heating bills. "Five bucks is a good deal and I hope the people up there appreciate it. But I think [the price] should be higher," Hurley says. "While the big theater chains have the advantage of being in the big markets, our advantage is that we don't have competition. It's almost like a monopoly."
Despite having to continually adapt to industry changes and technological upheaval, Moore still takes time to appreciate what his business is all about: Good movies. He's looking forward to seeing the Owen Wilson, Kate Hudson and Matt Dillon summer comedy, You, Me & Dupree. But even as he acknowledges his place in the entertainment industry, he maintains that his success depends more on the local community than the Hollywood machine. And with that focus, he says he's going to resist as long as possible the price hikes that have become so common at other theaters. "I live in this community and I can't with a straight face look at my neighbor and charge what those other theaters charge," he says. "You do business in the community and you want to be a part of it. I think you have an obligation to at least help the community that is feeding you."
Eleven years later, DVDs reign supreme and movie pirates are distributing films often before they hit theaters. Moore, like every theater owner, sees these developments as a threat to his business. But in other industry trends he's swimming against the tide: While theater admission prices have surged nationwide, a ticket to see Christian Bale's turn last summer in Batman Begins would have cost Narrow Gauge Cinemas' patrons the same $5.00 they spent to see the franchise's previous two flicks. Same for admission to any of this summer's crop of Hollywood blockbusters.
Around the state, theater chains such as Flagship Cinemas and Regal Cinemas charge anywhere from $7.00 to $8.50, depending on the location. And even independent operators Colonial Theater in Belfast recently raised its prices for the first time since 1995 to $7.00 for adults. By comparison, Moore charges $5.00 for adults or $3.50 on Monday nights and matinees ˆ perhaps the lowest in the state for a theater that shows first-run films. With a medium popcorn topped with real butter selling for $3.00 and a medium soda for $1.50, a couple can head out for a movie date for $16.
As the owner of the only movie theater within 25 miles, Moore could raise his prices, but his decision to keep them low is a deliberate ˆ at times painfully so ˆ business strategy.
"Unfortunately, what we see nationwide is that theaters keep pricing themselves out of business. They think they'll raise their profits by raising their prices, but that's not working," says Moore. "What we lose on $7 and $8 tickets, we make up in volume. My theaters are in two of the poorest counties in the state. We're not going to charge high prices for people to go the movies ˆ we just can't afford it."
While western Maine moviegoers love his decision to keep prices low, it hasn't come easy. As Moore strives to equip his theaters with the latest technology and comforts, he's had to find ways to cut costs without cutting corners. He's even branched out to buy and renovate a classic theater in nearby Skowhegan. The result is a longer working week for him, and the formation of stronger partnerships with other local business owners in a quest to keep his box office busy. Nevertheless, as a sometimes helpless bystander in an industry that is undergoing a massive (and pricey) metamorphosis, Moore makes sure he never settles too far into his seat.
Dinner and a movie
Moore, a liberal arts graduate of Colby College, made his first foray into film in Farmington in 1986, at age 21, when he became manager of the State Theater on Broadway. Three years later, he bought the two-screen theater and ran it successfully until 1995, when he relocated a stone's throw down the street into a new building designed to look like an old train depot.
Skeptics forecasted the new theater's downfall, contending its placement below the downtown's well-trodden shopping district ˆ on what was once the Sandy River & Rangeley Lakes Railroad yard ˆ would put it out of sight, out of mind and out of business. But Moore says he knew it would be more affordable to have a seven-screen cinema off the main drag, and that if he offered a good product at a good price, the customers would come.
Tom Marcellino, owner of The Granary, a restaurant and pub near the theater, is one local business owner grateful for Moore and his methods. Narrow Gauge Cinemas partners with The Granary and another downtown eatery, The Homestead, to offer $3.00 movie tickets with meals. Marcellino says as a result, it's not uncommon for diners to say they've come from Augusta, Waterville or even further to enjoy dinner and a low-cost movie. "[Narrow Gauge Cinemas] is a cornerstone of the community and one of the things that keeps downtown Farmington so vibrant," Marcellino says. "I know we wouldn't be as popular or as busy as we are without him there. He's brought a ton of business this way."
Gift certificate sales are another component of Moore's strategy to ensure his box office will deliver when Hollywood doesn't. A combination movie pass at Narrow Gauge includes one admission, a small popcorn and a small soda, and sells for $6.00 each or $55 for 10. With complaints by American moviegoers that films aren't what they used to be, Moore says, gift certificates are a way to pull people in when the plot lines don't. "Maybe it isn't the best movie, but it's already paid for so you don't feel bad about going to see it," he says.
Moore also cites the presence of the University of Maine at Farmington as a boost for his business. With 2,000 students just a short stroll from Narrow Gauge's steps, he says he is able to offer 9:00 p.m. shows that other small, independent theaters aren't successful with. And while summer is the busiest season, the college crowd helps his returns stay relatively stable during the year.
Still, in order to maintain low ticket prices, he's always looking for ways to cut his operating costs. Four months ago, he opted to buy and book films himself instead of having a professional buyer work on his behalf ˆ and his expense. Although he declined to say how much money the move has saved him, Moore says it's likely the best decision he ever made, because it puts him in control of what his customers see. While the buyer may have known the industry, he says, no one knows the whims and wants of western Maine moviegoers better than he does.
That's why, when the historic one-screen Strand theater in Skowhegan went dark for nearly two years, Moore took a risk and bought it in 2003. Although he knew that reopening the circa-1929 cinema would put a dent in attendance at the Farmington theater ˆ as Skowhegan-area cinema patrons would have a local option rather than making the 25-minute drive to Farmington ˆ Moore explains he'd rather share an audience between two theaters than risk losing a portion of his customers to another owner who might have purchased the Skowhegan theater.
While keeping the Strand's historic interior intact, including balconies, light sconces and tin ceilings, he built an addition housing two new screens and updated all of the theater's systems, from heating to seating. As Skowhegan embarks on a revitalization effort, Moore hopes his cinema will be one of the downtown's anchors.
Skowhegan officials feel the same way. Jeff Hewett, Skowhegan's economic and community development director, hopes the Strand will convince local businesses owners to keep their doors open later to cater to movie patrons looking to dine and shop before their show. "He took a big leap when he did his project and everyone else started stepping to the plate after that," Hewett says.
As in Farmington, tickets in Skowhegan are only $5.00. Though he declines to disclose revenues of either theater, he says the Strand's numbers "are showing that while it's not a home run, it's a solid hit." And he adds, "They can only go up as good things happen to the downtown."
Crossing the digital divide
Even without the threat of nearby competition, Moore has felt compelled to update his Farmington theater. Two of the auditoriums have recently been converted into stadium seating, and one more is due to be revamped later this year. That's because Moore believes it's important for customers to see profits being put back into the business, and that offering the most current amenities would "make it very painful" for another theater to open in Farmington.
But while he is cautiously optimistic that another cinema won't light its marquee in Farmington or Skowhegan, Moore is on the edge of his seat about what lies ahead in an industry he describes as "in upheaval." Earlier this year, director Steven Soderbergh ˆ the Oscar-winning director of Traffic and hits like Erin Brockovich ˆ gave the industry minor palpitations with the release of Bubble, which hit both theaters and television on a Friday and was released on DVD a mere four days later. Piracy also is a growing problem, with copies of films illegally making their way onto streets and the Internet, sometimes even before the movie makes it to theaters.
Terri Westhafer, a Colorado-based cinema industry consultant and the past president of the International Cinema Technology Association, describes piracy as an epidemic that is hurting everyone in the industry. But she says the current transition from film to digital cinema projection technology has the potential to curb this problem through scrambling and encryption.
The cost of converting to the emerging technology is worrisome for Moore, however. While costs vary for purchasing the digital cinema equipment itself, the National Association of Theater Owners projects it could cost theater owners between $2,000 and $10,000 per auditorium, per year, to maintain digital projectors and other equipment.
Only about 550 of the 38,000 or so movie screens in the nation have made the switch so far, Westhafer says, but she stresses it's a critical move that others, like Moore, must make. Still, financing such improvements is tough for theater owners, who actually make their money on concessions rather than ticket sales. But there are many tactics to boost revenue beyond charging more for Snowcaps and soda. One way is through pre-show on-screen advertisements, which is now a $500 million annual industry. Moore recently got in on this moneymaking trend and admits it's a "great revenue stream," but as usual, declines to give specific numbers.
In order to succeed, though, independent theaters must find a niche, says Westhafer. That could mean offering restaurant-style food service during movies or owning a vintage theater like the Strand in Skowhegan. "I think it's a really good time to be an independent theater owner. They've got more flexibility than they've ever had," Westhafer says. "My advice to independents is to know your market and know what you are good at and what you love to do."
For Moore, that means offering all the cutting-edge amenities of a big theater chain. But with cell phones chirping and kids kicking seat backs ˆ both annoyances Moore says he and his staff fight aggressively ˆ it's not surprising that some people would rather watch movies in the comfort of their own home. "Ultimately, theaters don't control their own destiny. If film companies can bypass the theaters and still make money, they will," Moore admits. "There is a lot of discussion right now about whether theaters will be viable in the future."
Michael Hurley, owner of Belfast's Colonial Theater, is less pessimistic. He says the industry will endure because there will always be a customer base that wants the experience of watching a movie in a theater. "When we opened in 1995, it was before DVDs, the Internet, TiVo, Video on Demand and cell phones. Today, there is an endless array of new media choices but movie theaters have been able to survive," he says. "People have been predicting our death since the advent of radio."
As a fellow independent theater owner, though, Hurley teases that Moore is "crazy" for keeping his prices so low. He recently raised ticket prices at his own theaters from $6.00 to $7.00 to offset higher costs such as rising heating bills. "Five bucks is a good deal and I hope the people up there appreciate it. But I think [the price] should be higher," Hurley says. "While the big theater chains have the advantage of being in the big markets, our advantage is that we don't have competition. It's almost like a monopoly."
Despite having to continually adapt to industry changes and technological upheaval, Moore still takes time to appreciate what his business is all about: Good movies. He's looking forward to seeing the Owen Wilson, Kate Hudson and Matt Dillon summer comedy, You, Me & Dupree. But even as he acknowledges his place in the entertainment industry, he maintains that his success depends more on the local community than the Hollywood machine. And with that focus, he says he's going to resist as long as possible the price hikes that have become so common at other theaters. "I live in this community and I can't with a straight face look at my neighbor and charge what those other theaters charge," he says. "You do business in the community and you want to be a part of it. I think you have an obligation to at least help the community that is feeding you."
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