Cinema owners worry about ticket prices, too

The next time your foot sticks to a wad of gum on the movie theater carpet, or you wish the popcorn weren't so expensive and the preshow ads so long, the person you need to talk to is: the theater owner. In large and small movie houses across the US, these little-known figures are largely overlooked. They're a vital link, however, between movie fans and the big-screen experience.

More than 6,000 theater owners met last week in Las Vegas for their national convention. Tuning into the lunchtime and hallway chat of members of the National Association of Theatre Owners (NATO), it's clear, perhaps surprisingly to moviegoers who think their protests over popcorn prices have gone unheard, that concession-stand sticker shock weighs on their minds. But it is only one of the pressing issues that confront today's theater owners as they balance the bottom line against the moviegoer's satisfaction - and ultimately determine the quality of the moviegoing experience.

"I call it the lousy-in-the-lobby experience," says Joseph Chabot, of Moore Theatres, a small chain of 19 screens in four locales outside of Kalamazoo, Mich. "People who've just come from the local fast-food restaurant know what soda costs," he says, "and they don't like paying two or three times as much just to carry it into the theater with them." Mr. Chabot and his partner, owner and president Carol Moore, say they have taken these concerns seriously and come up with a solution - self-service concession stands.

"We let people get their own drinks and popcorn and they love it," he says. "It saves them money and still allows us to make a profit." Chabot says they've seen audience numbers increase since they instituted the new service.

While concessions have been the prime profit center for theaters for many years, the pressure for profits has increased recently as the number of movies in the pipeline has gone up. Chabot explains that the somewhat arcane contract that divides up the ticket price between studios and theater owners is tied to how long a movie plays in the theater.

Although this has begun to change, particularly for the larger chains, the industry standard has long been that the ratio for the first weekend is called the 90/10 ratio. Ninety percent of each ticket goes to the studio and 10 percent to the theater owner. The longer the movie stays in the theater, the more money the theater owner can make off each ticket. But these days, explains Chabot, the pressure to put a new movie in almost each week makes it nearly impossible for many small theater owners, in particular, to reap more than 10 percent of the ticket profit. Phonecalls to several studio distribution departments for comment went unreturned.

"If we didn't have a concession stand, we wouldn't be in business," says Harold Spears, president of Sun South Theatres in Lakeland, Fla. He runs two drive-in theaters and owns the real estate under the screens. He can hold as many as 1,200 people in each venue and normally shows first-run films for two weeks at the most. "We don't make much at the box office," he adds.

Mr. Spears used to be able to charge a flat per-car fee, but now the studios won't allow it. "They've gotten tougher and tougher with us," he says, explaining that he must now charge $3.50 per head (children under 9 are still free, however).

The smaller the operation, the more creative theater owners have to be, says Lourette Ann Bluto, who runs Branson's Imax Entertainment Complex in Branson, Mo., together with her husband, Paul. Along with a three-screen 35-mm theater, they've added a live theater dubbed "Little Opry," a 534-seat Imax theater, and a restaurant featuring Ozark cooking, as well. But, she says, the films are what draw people - especially families - to the complex.

The current trends in movies make Mrs. Bluto's job more difficult: Like many other family-owned theater chains outside the major cities, hers faces hard choices in finding movies that will draw largely conservative, family-oriented audiences.

"Such language in these movies today, " she says. "Why do they need to have every other word be so offensive?" But she faces a problem. If she turns down a hit film, she says, it will hurt her relationship with the studio. "If you pass on a movie because you object," Bluto says, "it will put you further back in the line for the next film."

Underlying all the conversations, however, are questions about the movie-house experience itself.

Movie attendance in the US has dropped in the past two years from a high of 1.63 billion in 2002 to 1.53 billion in 2004, according to NATO. Before 2003, attendance regularly increased each year. The numbers give some theater owners pause.

"In the '50s and '60s, everybody went to the movies," says Chabot, adding that with all the competition from other entertainment sources, including ever more sophisticated home theaters, people are getting out of the moviegoing habit. "We need to do more to develop the habitual moviegoer," he says.

"I worry about all the digital delivery," says Ms. Moore. Once movies can be delivered directly into the home, she adds, all the cheap popcorn and clean floors in the world won't matter. "How long is it before they just won't need us at all?"