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Nov 27, 2023

Movie Theaters Offer Larger Screens, Heated Seats and Sushi to Lure Fans Back

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After scraping by during the pandemic, cinemas are hoping to lure back moviegoers by spending millions of dollars on upgrades.

By Jane Margolies

More than three years after the pandemic slammed movie theaters, reducing the flow of new films and keeping patrons away, operators hope a slew of wide releases this summer will finally get those who have grown accustomed to streaming movies at home back into theaters.

If they do return — for "The Little Mermaid," "Barbie" or the latest from the Spider-Man and Indiana Jones franchises — moviegoers may find that the spaces look and feel different.

Cinemas were already upgrading before the pandemic — bringing in cushier seating, bigger screens, better sound equipment, and tastier food and beverage options.

But many theaters also went into 2020 with thin margins and may have survived only because of federal pandemic relief programs. Now cinemas are spending millions of dollars to beef up their offerings and surpass moviegoing of old.

"There's an urgency now," said Mike Polydoros, president of PaperAirplane Media, a cinema marketing agency.

Theaters are installing heated lounge chairs that fully recline or have built-in trays and buttons to summon waiters. Some seats move in sync with the movie's action or provide special effects such as a blast of air during a windy scene, tricks that were once typical only at amusement parks. Some auditoriums now have screens on the sides as well as at the front. Menu options have grown ever more sophisticated. Sushi, anyone? You can wash it down with an I.P.A.

Theaters are offering other thrills. One outside Fort Worth built a gangplank 22 feet above an arcade floor — walk it if you dare. Another in Dobbs Ferry, N.Y., has a kitchen and lobby bar with TV screens so a customer can, say, catch the end of a ballgame before the feature starts.

Emma Boonshoft, 30, a public relations consultant, said she had not been to the movies with her husband since before the pandemic. But they tried the Dobbs Ferry venue, part of the Look Dine-In Cinemas chain, after it opened, sharing a pizza and a salad before "80 for Brady."

"It felt like a real date night," she said.

Not surprisingly, such excursions now cost more, and not just because of pricier refreshments: Some theaters are charging 65 percent more for a movie shown on the jazziest new screens like ScreenX and RealD 3D.

The upgrades are part of an effort to make up for lost time. Domestic box office earnings so far this year still don't match prepandemic levels. And experts say it could take years for the movie theater industry to recover from pandemic losses, possibly hampering operators’ ability to make investments to stay competitive.

"There's tremendous optimism within the industry right now but we also have to be mindful of what happened a few years ago," said Michael O’Leary, president and chief executive of the National Association of Theater Owners, a trade organization. "That compels us to keep innovating."

Streaming presented a challenge before the pandemic, but when theater owners were forced to shut down and restrict capacity, Hollywood studios started releasing movies to streaming services and theaters simultaneously, or sidestepping theaters altogether. Movie theaters, also known as exhibitors, lost 80 percent of their domestic box office revenue in 2020, according to Comscore, which compiles moviegoing data.

Many exhibitors renegotiated their leases during the pandemic and used funds from the federal government's shuttered-venue-operators grant program to pay rent.

Some theaters didn't make it. About 5,000 remain in the United States, down from 5,869 in 2019, according to the theater trade group; the number of screens fell to 39,007, from 41,172. Even drive-ins — which enjoyed a renaissance during the pandemic because of safety concerns about indoor venues — shrank in number.

The new emphasis is on quality over quantity, industry experts say, with new theaters going smaller, with fewer screens. Lounge chairs take up more space than upright seats, so auditoriums accommodate fewer patrons.

"They’re not building 24-screen theaters anymore," said James O’Neil, an executive director at Cushman & Wakefield, a commercial real estate services firm.

EVO Entertainment, one of a handful of companies creating "cinema entertainment centers," turned a 14-screen theater in Southlake, Texas, into an eight-screen venue with a restaurant, a rock-climbing wall, a ropes course, bowling, bumper cars — and that aforementioned gangplank. The cost: more than $10 million, about the same to build a complex from scratch, said Mitch Roberts, the company's chief executive.

"You can't do the bare minimum anymore," he added.

Such extravaganzas may be difficult to pull off in dense urban locations. But cinemas all over have been upgrading their technology, from ticketing to projection systems.

"It's become an arms race," said Paul Dergarabedian, a senior media analyst at Comscore.

Many operators are installing premium large-format screens — which include IMAX systems, with their giant, curving screens, and ScreenX, which projects films in the front and on the sides.

Showings on these screens often sell out first and account for an increasing share of box office revenue. The screens generated about 9.2 percent of domestic revenue in 2019, according to Comscore, which predicts they will bring in nearly 17 percent of revenue this year.

At some Marcus Theaters locations, auditoriums with large-format screens also have recliners that heat up — and the company even sells blankets so you can get really cozy.

The average ticket price has inched up to $10.53 last year from $9.16 in 2019, according to the Cinema Foundation, a nonprofit arm of the National Association of Theater Owners. That can jump to $20 or more for a movie in an auditorium with extra-large screens or 3D. And customers appear willing to pay to see blockbusters at their best.

Theater chains are also experimenting with premium pricing for the best seats in the house and highly anticipated movies on opening weekends.

Some operators continue to lean into food and beverage offerings, including upgraded concession items that moviegoers can order in advance and restaurant operations with servers at patrons’ beck and call.

New on the menu: bowls and salads. Cinépolis theaters now serve nachos with real or vegan cheese. Look Dine-In is brewing its own beer in Chandler, Ariz. Theater bartenders are concocting movie-themed cocktails.

Food and alcohol sales bring higher profits than ticket sales, a big chunk of which goes to studios. "That's why you’re seeing so many theaters add bars," said Mark Hunter, a managing director at CBRE, a commercial real estate services firm.

Exhibitors are also taking cues for investments from their loyalty-programs data, said Jackie Brenneman, president of the Cinema Foundation.

Even as they push to upgrade, many companies continue to struggle financially, and some chains are shedding locations. AMC Entertainment, the largest circuit in the United States, is saddled with debt. And investments in technology are expensive — an IMAX system costs about $1 million, not including installation, which might involve knocking down a wall between two small screening rooms to create a large enough space, said Richard L. Gelfond, chief executive of IMAX.

Some theaters receive assistance paying for renovations from landlords or developers who hope the foot traffic from a successful cinema will help neighboring retailers. Box office hits like "The Super Mario Bros. Movie" may make it easier for theaters to borrow for capital improvements, industry experts say.

"We are starting to see banks get a little more comfortable," said Brock Bagby, executive vice president and chief content and development officer of B&B Theaters.

Exhibitors are also trying to get more use out of their real estate. Some are screening concerts and TV shows or hosting trivia nights and video game tournaments. At a theater in Wesley Chapel, Fla., a suburb of Tampa, B&B leases one auditorium to a spin studio and another to a live comedy club.

But all the new tricks aside, popular movies ultimately draw customers, and operators are hoping this summer's releases continue the momentum from the Mario Bros. hit, which helped push April's domestic box office up 11.5 percent compared with the three-year prepandemic average for the month, said David A. Gross, who runs Franchise Entertainment Research, a movie consultancy.

"It was a breakthrough," he said, "the first month we’ve had since the pandemic that was better than prepandemic."

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