Movies are a global icon of entertainment. Although many movies originate from Hollywood, independent and international film production is growing exponentially. Those who love movies would love to know how to run a movie theater, but starting a new theater can be somewhat daunting. Not only does the location and size of the theater matter, but so does the structure of how movies are distributed to your location.
The first decision that you’ll need to think about is whether or not you’ll franchise your theater. Franchising helps to secure distribution channels immediately and creates an instant reputation within your community, but it comes at a cost. There will be a franchising fee and you’ll need to pay ongoing royalties, but you won’t have to worry about securing screening rights.
1. Get To Know Your Local Market.
Some markets just can’t or won’t support a local movie theater. Just because there isn’t one available doesn’t mean that it is a viable business venture. If there is a 14 screen megaplex that’s less than 30 minutes away, you may not even have a business opportunity. Survey your community to see if they’d support a local theater and how many times they would consider coming to see a show.
2. Get Your Paperwork In Order.
If you decide to proceed with your movie theater, you’ll need to secure a building that can support it. You’ll need large rooms with good acoustics and a stage or wall up front that can accommodate a large screen. Once you secure the location, you’ll need to get your paperwork in order so that you can get the business and theater licenses that are required within your community. Check with your local Permits Office to discuss any specific licensing that may be necessary.
3. Select A Theme For Your Theater.
Most movie theaters will show first-run films for which they hold screening rights for their region. A growing trend, however, is to have theaters that show classic and cult films only on a regular basis. Movie theaters that show favorites like Rocky Horror Picture Show repeatedly can generate just as much revenue as first-run film theaters. This is why your market survey is so important.
4. Determine Your Capital Requirements.
If you are building a theater from scratch or renovating a building to become a theater, then you’ll need capital on hand for equipment, electronics, and digital projection. Movie theaters today don’t generally receive films on reels like they almost all did about a decade before. Now they are distributed on digital cartridges, much like how a home movie will be played.
Your business plan will let you know how much capital that you’ll need. Determine the figure and then secure the financing. If you franchise, there may be access to third party financing through your home company.
5. You Need To Advertise.
Although a movie theater is a destination business, which means people will find it so they can see a movie there, eventually it is not going to stay in business long if no advertising happens. Smaller theaters tend to partner up with local businesses to put display advertising on tables and menus. Larger theaters will secure radio and TV advertising to promote movies and events.
6. You Also Need To Market.
The Rose Theatre in Port Townsend, WA is an excellent example of what a small community theater can do on the marketing front. Every year they help to sponsor a film festival that attracts one big-name celebrity and about 100 films that can be shown in the theater, on the side of a building, and in other venues around the town. The entire community benefits, the theater gets needed exposure that is regional and sometimes national, and this attracts people to see shows all year long.
7. What About Those Concessions Prices?
Let’s address the one issue that all movie theaters face: concessions prices. Sure – people might spend $8 on popcorn and $6 on a soda. Here’s how you can make a real difference: by offering specialty items. Partner up with local restaurants and vendors to offer unique theater snacks and drinks that already have a premium value to them. It’s tough to spend $6 on a small Coke. It’s not so tough to spend $6 on a locally made drink.
Knowing how to run a movie theater ultimately means securing screening rights and then bringing people to the theater to watch those movies. If you follow these steps, you can start a new movie theater from start to finish and potentially find success.
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