Home theater sales put the squeeze on box office numbers
Advances in quality for home theater systems are keeping more movie watchers home, and some theater owners are taking notice.
2005 was the worst in 20 years for box office sales, and last year showed only a slight upturn. Industry watchers cite the rise in home theater technology – and the drop in price for such systems – as the chief catalyst for the trend. Still others point to the stagnant quality of "corporate theaters" as a factor.
To make matters worse, movie studios such as The Walt Disney Co. have moved to release DVDs of new films near the same time as the theatrical release. Last November, Reuters reported that Disney CEO Robert Iger suggested the DVD and theatrical releases could become simultaneous as studios market to both products’ audiences. Some theater executives are crying foul and others re-invent the product in order to compete.
"It’s been a very slow decay," said Vancouver-based Cinetopia owner Rudyard Coltman of the state of corporate theaters. "There’s been a big gap in the visual quality in film. And it’s an antiquated technology, about 70 years old."
In contrast, Coltman touts his theater, in operation since July 2005, as offering "21st century quality" to moviegoers. He spent $10 million to address the drop in box office interest and to offer a sort of Xanadu of movie theaters. The venue offers eight 50-foot-tall, high-definition digital screens, large leather high back seats, an option to watch movies in a living room setting while having food and drink delivered by a wait staff, on-site fine dining and an art gallery in the lobby.
"Cinetopia is better than home, that’s what we’ve been shooting for," Coltman said. "The genesis of Cinetopia came from the advent of affordable luxury home theater." Coltman said a large demographic has quit going to the movies because of a set of problems that consumers regularly mention in focus groups. These problems include crowds, people kicking the backs of seats, talking, and – not the least of which – seating that remains the same as society changes.
Theater chains such as Regal Entertainment Group have attempted to cater to the customer by reportedly providing pagers to patrons in some locations so they can summon ushers to report disturbances. Coltman turned up the luxury.
Cinetopia offers 52-inch seats, compared to the 40-inch standard at corporate theaters.
"People have generally gotten taller and 38 percent of the population is obese," said Coltman. "They don’t fit into the seats as well anymore, so they’re uncomfortable."
In the bid to become the venue of choice for movie watchers, selling the experience has paid off for Coltman. But home theater retailers are following suit – minus the crowds and the parking lot.
"We ask our customers if they are looking for the true theater experience," said Vancouver Best Buy Electronics General Manager Kevin Rose.
Consumers can now install plasma screens with better resolution than traditional theaters, and identical sound quality. According to Rose, home theater sales have spiked dramatically in recent years, and prices have dropped 30 to 40 percent in the last year. Such products have become one of the largest portions of store sales, said Rose.
While theaters like Cinetopia offer a luxury experience, home theater answers with personally-tailored luxury.
"It really comes down to ‘what kind of home theater experience do you want?’" said Rose.
But how much would it cost?
Rose said he can put a full-blown, theater-quality system in a customer’s home – including giant high definition screen, TiVo, THX-quality surround sound and a DVD and VHS player – for $133 per month, through a three-year interest-free loan. That will keep a family of four in theater-quality movies with On-Demand cable access (around $33 per month) every night of the week for three years at a total cost of $10,033.
The "better-than-home" experience at Cinetopia is not inexpensive. What would cost $9 at a conventional first-run theater carries a $13 ticket price here. And that’s only for the standard theater seats. The living room seating is a couple dollars more. But Coltman said business has been good – and widely attractive.
"We took a zip code survey of our weekend customers and learned that 55 percent came from outside the Vancouver area," he said. "I think we’re part of a new movement, and we have been well-reviewed in the industry."
Assuming $26 for two adults and $16 for two children and including around $20 for treats, a family of four could go to Cinetopia every weekend for three years at a cost of $10,416.
On the off-chance they went every night, it would cost them $67,890.
A nostalgic alternative
While home theater retailers and Cinetopia target the "total luxury experience" market, others continue to offer good old-fashioned movie house fun. Kiggins Theater on Main Street in Downtown Vancouver shows second-run movies in a 70-year-old, one-screen theater. Theater owner Deborah West regards owning the theater a labor of love.
"It’s a pain," said West, who maintains a day job while running the vintage theater.
The aging Art Deco design and an ocean of rickety theater seats, coupled with the modest concession stand – complete with drink cups stapled to the wall to advertise size and prices, offers a nostalgic and cozy experience. Better yet, a double feature at Kiggins is only $4.
Vancouver resident John Burgstahler has been going to the movies at Kiggins since the 1960s. He said he would rather see movies there, and puts no premium on first-run viewing.
"I’m not one that has to be at the theater on the day a movie is released," he said. "I prefer the vintage theater."
When it comes to deciding whether to watch at home or in the theater, Burgstahler said that depends on the movie.
"There are just too many movies that you still really need the big screen for," he said.
