Single-Screen Theaters Feature Art Films : Landmark’s Outlook Bright in Fading Business

Four movie houses in San Diego specialize in foreign or “art” films, and San Francisco-based Landmark Theatres owns all of them. It’s not exactly a monopoly, since any theater can show the films, but Landmark clearly has the market to itself.

“It’s astonishing that Landmark has four theaters in a city the size of San Diego,” said Allen Gates, owner of La Paloma Theater in Encinitas. “I wouldn’t want to compete with them.”

In the age of six-screen theater complexes and home video mania, Landmark is unusual in a cinema industry bemoaning the decline of art theaters. Landmark operates 36 screens in 26 theaters, mostly on the West Coast, including the Park, Ken, Cove and Guild theaters in San Diego.

Doggedly Single-Screen

“They are the only national, or quasi-national, specialty theater chain,” said Jeff Lipsky, president of the motion picture division of Skouras Pictures, a film distributor. “There is nobody that can boast the same presence in as many large cities as they can.”

Real estate values have made the large, single-screen theater almost extinct and the multiscreen complex much more economical. In San Diego, the Loma and the Fine Arts (formerly a Landmark theater) have fallen victim to redevelopment within the last two years.

Yet, in San Diego at least, Landmark doggedly sticks to maintaining one-screen, free-standing theaters.

Each of its San Diego locations seats 500 to 600 people, and, like all of Landmark’s theaters, specializes in screening art films and films unable to garner the distribution support of a major studio. Although the theaters occasionally screen movies from major studios--such as Stanley Kubrick’s “Full Metal Jacket” last year--they usually feature only independent and foreign films, often with subtitles.

“We don’t show dubbed movies,” said Bill Richardson, Landmark’s manager in San Diego.

Most of the large, independent San Diego theaters went through a “revival house” stage of showing Hollywood classics and second-run movies--films that had already been through town at least once. By showing double features and changing the films almost every night, they were able to maintain a regular audience.

Video Changed Everything

“A double feature of ‘Harold and Maude’ and ‘King of Hearts’ was a guaranteed draw,” said Richardson.

But the home video boom effectively eliminated that market. Many theaters then turned to foreign movies, which, at the time, usually meant soft-core sexual films. Eventually the line between art and pornography blurred. The Guild and the Fine Arts were operated by the Art Theater Guild, which, despite its name, essentially specialized in sexually explicit films.

At one time, before the company took over operations, three of the four Landmark theaters here showed porn movies.

Meyer and partners Steve Gilula and Kim Jorgenson met and took over the Nuart in Los Angeles in 1975. They leased the Ken on May 14, 1975, eventually picking up, in order, the Guild, the Fine Arts, the Cove and the Park.

The Park, formely the Capri, was a gutted building when Landmark began leasing it two years ago. Although the company has ownership interest in some theaters, it leases all of those it runs in San Diego.

Through the years, competition to Landmark’s San Diego movie houses has gradually faded. The last big competitor was the popular Unicorn Theater in La Jolla, a traditional, classically styled theater beloved by old-movie buffs.

Dibs on the Dubbed

“I loved the Unicorn,” said Richardson. “But the Guild (which opened in 1978) was a larger theater, and it could get films before they could. I hate to say it, but that was probably a major factor” in the Unicorn’s closing.

Indeed, a major part of Landmark’s success in San Diego stems from its ability to get first-run foreign films before anyone else.

While more than 1,000 prints of a major studio film may be distributed--2,500 copies of “Crocodile Dundee II” were sent out nationally--there may be as few as a dozen prints of a foreign film available in the United States. There is no real mystery to it: Prints are simply expensive to produce.

With few prints available, distributors--the companies who lease prints to exhibitors--are selective and seek to get the maximum return from each copy. Unlike with a major studio release, which a chain such as Mann Theaters might show simultaneously on dozens of screens throughout the county, San Diego might get only one print of a foreign film.

And, in San Diego, Landmark is usually the one to get the print. It is “very infrequent” for someone else here to even bid on a foreign film, said Lipsky of Skouras Pictures.

“Landmark is the largest exhibitor in the area, and it can control when a (foreign film) will be played and when it is released,” said Alan Grossberg, formerly co-owner of the Flower Hill and La Paloma theaters.

(Now the house manager for Symphony Hall and a film booker for a Vista-based company, Grossberg and his Flower Hill partner, Phil Bresnick, filed an antitrust suit a few years ago against seven major distributors and five exhibitors, alleging restriction of trade. Grossberg said the major distributors and exhibitors were preventing his theater from acquiring first-run movies. The suit was settled out of court, he said.)

Second-Run Debate

Once Landmark completes the first showing of a film, other theaters still have difficulty obtaining a print, because Landmark may take it to one of its other markets, Grossberg said.

“After Landmark is done with the film, it is pulled out completely. You can’t get a sub-run (a second release) in San Diego on an art film,” he said. “The market is there for widening the run.”

Distributor Lipsky disagreed. “The market disappears entirely for any kind of (second-run) film,” he said.

The small audience for the films dictates that the showing must be exclusive to one theater, or the films would fail, according to Lipsky.

Meyer denies that Landmark is able to control a film from city to city.

“Ninety-nine percent of the time, each market is treated on its own,” he said.

The right to screen films usually goes to the highest bidders. Distributors and exhibitors negotiate such factors as the percentage of ticket sales that will go to the distributor, the length of the run, how much money will be guaranteed the distributor and how much will be paid up front. Along with the building lease, film rental is an exhibitor’s largest overhead cost.

No Room for Bidding?

For the first week of a first-run movie, the distributor might negotiate for 70% of the ticket revenues, receiving less in subsequent weeks. For mainstream movies, the split averages 55%-to-45%, with the exhibitor taking the larger chunk. Since specialty movies take longer to generate an audience, the up-front money and early-week percentages for the distributor are usually less than for mainstream movies.

At least one expert believes there is no room in the specialty film business for the type of competitive bidding that takes place on major studio films.

“They would compete themselves to death,” said Art Murphy, professor of film at USC and film industry analyst for Variety magazine. “Companies would be out bidding for films to the point they would kill each other off. Then there would be no one in the market.”

The audience for art films is so small, Murphy said, that without a company like Landmark, there is little chance the films would find a venue. Major exhibitors could “swoop down” to pick up occasional big-selling art films, controlling the market the same way they control the major studio releases, he said.

“There is no room for two or three companies,” Murphy said.

The audience for specialty films is notoriously hard to develop, but it is also notoriously loyal.

“It’s tough because there are so many movies,” said Gates of La Paloma. “The same people who said they don’t want to see one film want to see Yugoslav comedies. People tend to like what they like.”

Fanatics Help Finances

Yet the business depends on habitual customers, people willing to check out a theater’s current offering regardless of style and origin.

“The theaters appeal to the fanatical devotee of this type of film,” said Murphy. “They keep coming back to see everything the theater shows. They will be loyal, which is almost as good as selling subscriptions.”

Instead of running different movies almost every night, Landmark’s theaters usually present weeklong runs of foreign films, mixed with films with cult followings.

“ ‘Rocky Horror Picture Show’ and ‘Au Revoir Les Enfants’ are strange bedfellows,” said Meyer. “But that is part of the mix we’ve encouraged to come to our theaters. People intrigued by cult movies will be intrigued by French films, too.”

Apparently, San Diego is rapidly developing into an ideal specialty market.

“Certain cities like Seattle and San Diego are good film towns in general” because of an abundance of educated and sophisticated people, said Murphy.

Although students and counterculture types provide a large percentage of the market, the theaters need affluent customers if they are to survive. Ticket prices in Landmark’s theaters, not necessarily cheaper than at mainstream movie houses, usually range from $4 to $5.50.

Must Promote Themselves

Unlike theaters screening major studio releases, which benefit from waves of advertising for films like “Rambo III,” the art theaters must do their own promotions to attract customers. Murphy said Landmark has a strong reputation for its “field promotions,” its ability to generate word-of-mouth support for films, usually by coverage in the local papers and some limited advertising.

In San Diego, local movie critics regularly review the art films at the four Landmark theaters. The company also involves other organizations in low-overhead promotions, such as a June 4 benefit scheduled for public TV station KPBS to commemorate the 10th anniversary of the Guild.

By far the most successful local promotion, though, is the monthly calendar for the Ken, which boasts a circulation of 100,000.

Meyer said Landmark succeeds because it takes extra steps to keep its loyal customers happy. Theater managers are encouraged to be creative, and discouraged from stopping zaniness such as the Spam throwing that often accompanies the screening of films by the English comedy troupe Monty Python.

Generally, Landmark has larger staffs at its theaters, and takes extra pains to keep the facility clean and comfortable, with a wider-than-normal selection of food and drinks at the concession stands.

“Our audiences tend to be more critical,” Meyer said. “Our audience appreciates being able to come to a theater and know what they get in terms of the showing.”

In Landmark’s San Diego theaters, at least, audiences can also expect larger screens and quality sound systems. Although Meyer said Landmark is exploring the possibility of opening a multiscreen complex in San Diego and does have smaller screens in other markets, it has no plans to split its San Diego theaters.

“Audiences don’t want to feel like they’re walking into another shoe box,” he said. “We think that’s important.”