Magazine article Newsweek

The Last Picture Show? Theater Chains Are Finding Themselves in a Truly Scary Movie as Rampant Overbuilding Has Led to Problems

Magazine article Newsweek

The Last Picture Show? Theater Chains Are Finding Themselves in a Truly Scary Movie as Rampant Overbuilding Has Led to Problems

Article excerpt

The films may not be getting any better, but the theaters sure are. When Misty Croughen and Dara Robertson of Ventura County, Calif., went to see "Nutty Professor II: The Klumps," they enjoyed stadium seating, gourmet snacks, handy cupholders, a choice of starting times at convenient 30-minute intervals and crystal-clear digital sound. "You pay more," says computer programmer Croughen, who handed over $7.75 per ticket at the Edwards Camarillo Palace 12 Cinemas. "But it's worth it."

The moviegoers' nirvana, however, has turned into a financial hell for the nation's big theater chains. Five years ago such exhibitors as AMC and Regal launched a building blitz as they set out to transform the pedestrian act of moviegoing into a plush theme-park-like experience. Sony's popular Metreon in San Francisco touts 15 theaters, one giant Imax screen, nine restaurants and even a Maurice Sendak "Where the Wild Things Are" store. The goal was to lure people to the movies more often and have them spend more per trip on fancier concessions. The proliferation of new theaters was also supposed to usher in a golden new era of moviegoing, with screens available for new hits, the classics and indie films. In 1995 there were 27,805 screens in the United States. By last year the number had jumped 34 percent to 37,185.

The construction boom, however, hasn't had a happy Hollywood ending. While the number of theaters exploded, ticket sales have increased at a far slower rate. Now the new theaters are fighting over the same customers and killing off the older shoebox-size theaters. In Houston the AMC Studio 30 sits less than four miles from the 24-screen Cinemark Tinseltown, and last week both were showing 21 of the same movies. "We put megaplexes too close to competing megaplexes and even our own theaters," admits Edwards Theatres' Steve Coffey. …

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