Thread by @screening_room_

So: WHAT HAPPENS when a movie theatre can't succeed as a business anymore, and the ownership is ready to sell, go-out-of-business, or retire?

🧵A thread.

#BehindTheScreens

I've been the owner of a small movie theatre for over 10 years now, so I've noticed how things have played out in the past for other Canadian cinemas.

I've been learning some of the lore, but of course there are other film exhibition vets with more stories & insights than me!

First off, NO ONE IS HAPPY when a movie theatre closes down... except the ownership of the competing movie theatre down the street.

Everyone loves movie theatres: we are good for the local economy (nearby restaurants & shops) AND we're community cultural centres, open to all.

But a movie theatre that's legally classified as a business (as The Screening Room is), is not able to access all the public funding that goes to other cultural centres that support the arts, tourism, education, etc.

So BUSINESS LOGIC PREVAILS, which leads to 3 typical endgames:

#1: Sell the business to someone else. Multiplex buy each other/consolidate all the time (Famous Players, Empire). Even if the new owner can't make it profitable, they can close it down (let the lease expire or sell the building) while having succeeded at buying market share.

When theatre chains sell their unwanted buildings as real-estate, they MAKE A DELIBERATE STRATEGIC POINT of selling it to a buyer who will NOT operate a cinema in that space, even including it in the sales agreement.

Condo developers will pay top dollar for large downtown lots.

This is what happened with Kingston's downtown Capitol 7 movie theatre, which was located up the street from us. Built in 1932. Sold to a condo developer by Empire in 2012 once Empire built a new suburban multiplex with parking & IMAX near the 401.

cinematreasures.org/theaters/16751

Sobey's then sold off the Empire chain in 2013.

Cineplex bought up most of the locations (earning their 75% market share), but (supposedly) Cineplex helped west-coast regional chain Landmark buy some locations like ours, where there already was a Cineplex in the same territory.

And chains are going global in their consolidation: as tweeted earlier, Landmark was bought by a Belgian company Kinepolis in 2017 for $123 million. And Cineplex was nearly sold to UK-based Cineworld in a $2.1 billion (USD!) takeover, but the pandemic undid it.

Anyways, when the Capitol 7 closed down, it left us as the only cinema in downtown Kingston.

As a moviegoer, I *loved* that cinema, and when it closed it meant I had no place within walking distance to see mainstream films (I had no drivers license at the time).

I named the METRO screen of our cinema as tribute.

But, of course, as a *movie theatre owner*, it was financially good for us. Unfortunately, it did not change our booking status with distributors, which means that you still cannot see first-run films in Kingston's downtown.

When Vancouver-based Canadian cinema legend Leonard Schein retired, he sold the his cinemas The Park and Fifth Avenue to Cineplex. The Ridge was sold to a condo developer.

But anyways, regarding this #1 "Sell the Theatre" scenario, it's how I came to own The Screening Room.

I bought it for $50,000 from the hard-working, tired & pessimistic previous owner. I quit my job as a librarian to do it.

Officially, in the legal sales agreement, I bought "equipment" & "customer goodwill." But in retrospect, the most valuable thing I got was an existing set of relationships & expectations with the film distributors.

More on that in a bit...

Well anyways, there have been multiple times during the past 2 years where I've thought "get me out of here!" and wanted to quit/sell, but our theatre is not currently a profitable business... we've been treading water on moviegoer donations and the pandemic dole.

Once the pandemic money runs out, The Screening Room will start hemorrhaging thousands of dollars a month again, as it was during Spring/Summer 2020.

How much could I sell it for? We are operating at a loss & we still have some "Big 2018 Renovation Project" loans to pay.

Onto business-exit endgame #2: If you own the building, you just close up the movie business, sell off the equipment & hope to find a new tenant.

The world is full of old movie theatre spaces being used in creative ways... churches, stores... gyms!

eatdrinkfilms.com/2016/08/17/cre…

I *think* the wonderful outdoor gear store up the street from us, Trailhead, us used to be a cinema (if not, then it was originally a live theatre venue).

But a lot of old cinema buildings sit empty for a long, long time. There are *multiple* photography books out there dedicated to abandoned movie theatres.

popularmechanics.com/culture/a23500…

The thing is: theatres are spaces purpose-built for large numbers of people to all sit in the same direction and look at a screen.

The have high ceilings & raked floors and other characteristics not suited to other commercial uses (retail, restaurant, office, etc).

If a shopkeeper or a restaurant goes out of business, the landlord can lease the space to a new energetic entrepreneur will operate a new shop or restaurant in the space (sometimes re-using the built-in kitchen & furniture that are considered leasehold improvements).

But if a cinema goes out of business, the landlord will not easily find someone new who could run a successful cinema business in that space.

Why? Because Cineplex controls the territory AND the distributors who supply the movie product!

See my Rant #1:

https://twitter.com/screening_room_/status/1519490417057742850

And when it comes to blocking new enterprising movie theatre operators out of the business, IT DOES NOT MATTER how wealthy or well-connected you are, or how excellent your movie-going experience is.

Take the example of The Paradise Theatre on Bloor Street in Toronto.

What an incredible project! The building was bought & reopened by wealthy financier Moray Tawse, who was "motivated to restore it by his love of a cinema of similar vintage, where his mother worked when he was a child."

EVERYTHING about the cinema is expensive & state-of-the-art

Now imagine it's January 2020:

You're in Toronto's Koreatown & you want to see PARASITE, the movie people keep raving about.

Would you prefer to:

A: Walk 15 min west to the newly-restored & reopened Paradise Theatre?

B: Walk 30 min east to Cineplex Varcity?

Maybe you want option B because you're collecting Scene points / other reasons, but I bet there's a lot of folks who'd prefer A, the Paradise!

And I bet PARASITE's Canadian art-house distributor would have *loved* for their film to play at the "talk of the town" new cinema, too.

I'm sure you saw where this hypothetical "IF you could choose" question was going.

OF COURSE The Paradise wasn't able to play Parasite. It may have been a foreign-language film, but it was a HIT, and Cineplex gets exclusive first dibs on all hits.

dailyhive.com/toronto/paradi…

Cineplex CEO Ellis Jacob on how they know where to program diverse films at their locations:

"We have a Scene loyalty program, which helps us in understanding, by theater, what movies are working and which guests are coming to those movies."

boxofficepro.com/cineplex-ceo-e…

What about the local operator's art of *knowing* their community, listening to "please play movie X!" requests, and looking at people's faces as they exit the cinema?

Scene can't track how a movie makes you *feel*, or your receptivity to something new and surprising.

Thankfully for us, Cineplex's data analytics suggested that Kingstonians were not interested in a South Korean film, so we got to play it exclusive in Kingston, first-run.

It grossed $51,000!

Independents in bigger markets like @RioTheatre in Vancouver were not so lucky.

@RioTheatre So now here's my point:

If a wealthy Toronto banker with the best people, location & tech can't even realize his dream of running a great independent movie theatre that plays EXACTLY what its neighborhood want to see...

... well, then...

What hope is there for *anyone* else?

@RioTheatre You may have noticed that, up to this point, I've been making my argumenst based on sentiments like "consumer choice is good, monopolies are bad", etc.

I COULD ALSO go into how the state of things is *not good* for people marginalized by class, race, gender, geography, etc...

@RioTheatre ... because there are *injustices* all over the exhibition paradigm that decides who gets to play which movies for whom, where and when.

But it's the uncontroversial long-established Canadian competition laws that are unambiguously being broken here.

@RioTheatre "The Movies" are a profoundly confused, intention-obscuring haze of social, economic, cultural, spiritual & political interests.

The confusion made explicit: the Roxy Cine-Gog, the former discount double feature second-run in Victoria. Their slogan? Where Movies Are a Religion.

AND I'M NOT DONE YET! I haven't even reached my "How movie theatres go out of business - Endgame #3" yet.

Will get to that later.