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A study on the challenges of running a successful theatre; prepared for Mr. George Prescott

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Dec. 22, 2016 – West Bend, WI – A couple years ago I was hired by George Prescott to do some research on entertainment venues in Washington County and Southeastern Wisconsin. Mr. Prescott was exploring the options for the downtown West Bend Theatre owned by his son Matt. Mr. Prescott wanted to know what made a showhouse successful, what were the challenges, and what were some of the unique nuances.

I spoke with operations directors and executives directors from a variety of venues including neighborhood movie theatres, the Washington County Fair Park, the Schauer Art Center and more.

A bullet-point report is what follows.

 

John Brannan, director of operation with  Rosebud Cinema, 6823 W. North Avenue Wauwatosa,

Two theatres, Rosebud Cinema (150 seats) and Times Cinema on Vliet Street in Milwaukee (200) are operating as first run, single-screen theatres. The Avalon in Bay View is a larger neighborhood theatre, more of a movie palace with 220 seats in main house and 70 seats in a second screen.

All of these are ‘for profit’ theatres owned by Lee Corporation. They are open 365 days a year with limited showings on Thanksgiving and Xmas but – that’s changing because holidays are becoming very popular. Theatres show primarily first-run movies but you can get other films; can NOT get Disney.

Radius is pretty small – these are truly neighborhood theatres. People are not coming from a large distance. From a marketing perspective we’re trying to make our customers very loyal rather than trying to draw from a larger distance.

Booking agent – when you book the movies you’re committed to the title for two to three weeks. Booking agent is key because they have great relations with film companies.

Critical – Need to establish a good reputation with film studios. There are 8 – 12 film studios dealing with and need to establish a good track record. First couple years struggled to get titles. Not that many prints/copies – if a movie opens on less than 2,500 screens the neighborhood theatres normally DO NOT get the movie.

The film companies will look market by market and see what you’re gross results were for previous movies. The gross for movies typically falls off after week one (fall 30 – 50 percent).

Ticket price Rosebud Cinema – evening $9 for adults and $11 for 3-D.  Kids are $7 in evening and $6 in afternoon.  Monday – Thursday at 7 p.m.  Friday 7 and 9 p.m.  Saturday and Sunday run 4 – 5 shows. Turnout varies per title – could get as low as 100 a week to as high as 800 a week and a lot depends on time of year.

Best and worst – Best week of the year is the week after Xmas  Dec 26 – Jan 8. Other really good time is May and June and that’s when the film companies release the best films. September is always awful and August is pretty bad too. Midnight Friday show has a spotty audience.

Revenue – Pay about 55 percent to film company to run movie and theatre takes 45 percent of ticket sales. Settle with film companies after the movie runs to. Movie theatre reports gross on a daily basis.  For a small theatre that’s just getting started – the film companies will have to develop a trust issue. They may ask for $2,000 – $3,000 and then when grosses come out the film company will send money back.  “If that’s what it took for us to get Hunger Games – we’d do it. At the end of the day it shakes out to be the same, but it’s kind of a hassle,” said Brennan.

Movie theatres are a skinny margin business – Over half the revenue goes to the film company and a critical amount is what you’re making on concessions. 5 – 8 percent is the bottom line – even for the multiplex theatre.  Small theatre has to find niche and keep expenses down. We’ll do movie marathons or double features but those don’t make as much as you would think.

Staff – Almost all are part time about 10 staff at neighborhood theatre. Avalon will have about 40 people.  (manager, staff cleans the theatre after show)  People love the business. Minimum wage to $10 an hour.

Liquor license – That’s pretty critical. Full wait staff at the auditorium and a full kitchen and they will bring food and drinks at the Avalon. Show people what they’re not experiencing at the other multiplex theatres.  Seating has a big flip-up table. Medium-priced menu – historically movie theatres have the most expensive soda anywhere. You have a captive audience. A beer 16 oz tap is $5.

Projection – All digital. This is one of the primary items to figure out. Film companies don’t deal with film anymore. There is a way to get the projector through a third party and then pay a ‘virtual print fee.’   Ballantyne Strong, Inc Business Summary: Ballantyne Strong, Inc., Omaha, NE designs, integrates, and installs technology solutions for retail, financial, government, and cinema markets worldwide.

Renting theatre/ risks – We rent the theatre but we’re kind of limited because when you deal with film studios there’s a schedule that’s expected so you need to run one show on weeknights and 4/5 shows on the weekend. If you preempt your regular shows then the film company goes ballistic. We do Saturday and Sunday morning rentals or after the movie. It’s not worth it to irritate the film company even if they’ll bring 300 people and $5,000. The film company could then cancel your next title for two weeks.

Marketing – Groupon.com is marketing that really works. Can only use Groupon on weeknights  Package a pizza and two drinks and two tickets at a discounted price. Big trend now for theatres. Groupon has an email list. Promote food and beverage / people will find the movies and the studios will promote the movies. We need to promote the fact we sell beer.

Demographic – family and also an adult audience.

This is a really fun business to be in. You can get a good type of employee because people are so interested in it. You’re a slave to the quality of the movie but when you have a few screens to fill you will find a good product.

 

Brenda Johnson executive director Schauer Arts and Activity Center in Hartford (UPDATE: B. Johnson is no longer with the Schauer Arts Center)

The Schauer Arts Center in Hartford is a 501-c3, completed in 2001 following a $5.9 million reconstruction of a vacant cannery building. The 571-seat theatre has a full-time staff of nine, offers free parking for 200 plus, and has a liquor license – the board of directors is discussing whether to offer food.  There are grants and raffles and sponsorships to stay in business.

The theatre generally features musical acts and community theatre – 50 shows booked a year – Fri., Sat., Sunday except for a brief hiatus in summer. Executive director Brenda Johnson says, “In Wisconsin people don’t want to be inside during summer. The Skylight and Rep in Milwaukee have both gotten rid of their summer entertainment.”

This year the shows at the Schauer are selling out but fund raising is not going well. People are tired of being asked for money. Washington County is the richest county in the state, it’s also the most conservative county in the state and it’s the county that per capita in the county gives the least in the state. (Note these statements were in 2014)

Cost – Nobody understands what it costs. Restaurants and the arts are the two most volatile businesses to go into. We do more music because of cost and popularity.  Audience likes what they’re familiar with – they don’t like to try something new.

Demographic – Washington County has an older demographic which means audiences shrink because people don’t drive at night and if the husband has died, it means the woman doesn’t drive. “Young people – they save their money and go to one or two expensive concerts a year.”

Exploring creative marketing – Can the city keep the taxi running later at night, do we start renting a bus and charge people to pick up and take home.

People say they want matinees and we book them and they don’t come. Tricky – people say one thing but they don’t follow through on what they say.

 

Pull from a strong 40-mile radius  – How many people from Milwaukee, Elkhart Lake, Beaver Dam, Madison, Fond du Lac, Sheboygan. People appreciate the product and the experience we have here.

Movie theatre – “I’d probably go with movies because I think younger people are looking for those kinds of things. We don’t have a venue in this area with a theatre that serves food and drinks and a movie. We get a lot of requests for movies but we want to show old movies on DVD.”

Plays – tickets are $60 – $100 to meet costs and make a profit. Can’t bring Broadway to the Schauer because that needs 4,000 seats.

Surveys – The Schauer has done surveys but they tend not to work. “People say one thing and they do another. I want people to help develop a strategic plan – it doesn’t work like it has elsewhere. They just complain.”

New Plan – we’ll go for growth – need to go for diversity. Part of plan to help revitalize Hartford. I’m all about creating experiences. People come see the show and get out.

Contracts – Many acts/music artists cannot be booked in Hartford because of a clause limiting radius/calendar to play in Milwaukee and then at the Schauer. The Pabst has a 60-mile, six month clause. Some artists play for a certain size house –

Theatre needs to pay for artist’s hotel, transportation, food and the bigger names are pickier. The marketing, pay for the crew back stage. “Whatever I pay for a show I tack on another $10,000 and you can’t guarantee you sell out.”

“Relationships with the agents – if artist is particular they will ask for tickets to NOT go above a certain level. Can take six to eight months to book an act because of routing and fees and travel costs,” said Johnson. “A lot of theatres the exec. director is the booking agent.”

Everybody likes to say – if you build it they will come, that doesn’t always work. Need a full time tech director – sound and lighting and facilities. Once show is booked – there is a tech rider for lighting, sound, staging, special effects. What needs to be set up, how many to unload truck/semi. All the logistics – go smooth as possible.

Thoughts about WB Theatre – “There’s still an aspect of people /high schoolers that want to go out and be social. There are certain things you want to see on a big screen. You don’t want to stay home all the time – something to be said for a fun night/date night – need something to relax, dinner and a movie.”

 

Sandy Lang, exec director at Wash. Co. Fair Park (UPDATE: Sandy Lang is no longer with the AIS)

Most important: Acoustics/sound

Concert: Affordability is key. Booking acts starts $75,000 – $175,000 – $400,000 and on top of that there’s sound and light starting around $45,000

Format: Country is hot, classic rock, Fond du Lac has popular ‘Life’ concert – Christian rock

Booking agent is concert key: Working with a booking agent; they have relationship with AMC

Movies: Price is major – People in Wash. Co. want a lot for a little. Dinner and a movie is theme for Fox Bay Cinema in Whitefish Bay. Rivoli has Tuesday night $5 movie and free popcorn = popular

Scheduling: Weekends will generally be booked but can you afford the building to stand empty during the week. Heat bills, cost to staff/operate.

Conference opportunity: generally they want breakout rooms

Marketing: Partnering/cross promotion with other businesses/restaurants/taverns. Social media

Trends: State Fair – reasonable large space but nickel and diming and charging $15 for parking.

Caution: No refunds on tickets. Distance radius – no compete in contracts.

Best thought: When proposing the Wash. Co. Fair Park, Sandy Lang and Shawn Graff held four town-hall style meetings. They solicited public opinion from organizations/ groups – what they would like to see, frequency of use, what they would spend.

Target audience and area competition: MOWA, Fair Park, WBHS, UWWC, Schauer Art Center, Regner Park /Silver Lining Stage,

 

Sue Bausch at UW-Washington County Theatre,  400 S. University Dr., West Bend,

* Plays – There isn’t much of a backstage in the theatre, so plays could be difficult to produce in this space. A play with a very small cast may work, but space is definitely not ideal for this.

* Films – Finding a niche with second run and old movies like the Rivoli in Cedarburg; it has been done very successfully and is a good option. The low prices, family orientation, and feelings of nostalgia make it a great fit for a hometown theatre.

* Comedy club and stand-up comedy – Another strong possibility and there is little competition in the area.

* Sales presentations, company meetings – additional revenue options

UW-WC presents a Fine Arts Series each academic year. The series includes 5 or 6 visiting artists (in a variety of genre) as well as two theatrical productions (fall and spring). ) The series also includes performances by UW-WC’s Moraine Chorus and Moraine Symphonic Band (with winter and spring concerts).

Musical Masquers (UW-WC’s resident community theatre group) also produces 2-3 theatrical productions typically winter and summer. In addition, there are youth theatrical productions, lectures, dramatic productions, awards presentations, and more. The theatre is constantly in use.

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