The Invasion of the Screens : Despite Recession, the Multiplexes for Movies Keep On Multiplying

In the best of times, moviegoers typically have a choice of a dozen major feature films. But what’s been changing lately is the growing choice of movie theaters .

Like some monster from the movies, the multiplexes just seem to keep multiplying.

This fall, major movie theater chains in Southern California are adding 48 screens to the more than 800 already open in the Los Angeles and Orange County markets--and that’s not counting the plans of various independent theater owners.

By the end of 1992--despite an industrywide leveling off of ticket sales--many of the chains plan to open about 100 more screens throughout Southern California.

In San Diego County, within just the past month, Edwards Theaters opened a six-screen facility in La Costa, Landmark Theaters opened its five-screen complex in Hillcrest, and the independent Nickelodeon Theater Co. opened the eight-screen Mission Marketplace in Oceanside. In addition, Pacific Theaters last year opened an eight-screen complex within eyesight of its theaters in the Grossmont Mall.

All of the growth follows a trend that some have dubbed “The Screening of America.”

During 1990, the National Assn. of Theater Owners estimated that more than 900 screens were added in the 50 states, bringing the national total to 23,814.

But the growth has come in what seems to be the unlikeliest of times.

Box-office grosses for 1991 to date are slightly off the pace of 1990, which was the second best year on record. And despite a surge of recent holiday hit movies, the overall grosses for all movies continue to slide, according to firms tracking box-office grosses. And two of the largest theater chains, AMC Entertainment Inc. and Cineplex Odeon Corp., have shown losses in the current fiscal year.

Among the reasons for the downturn is the competition for entertainment dollars. Consumers have flinched at the thought of spending $6.50 to $7.50 a ticket for first-run movies. The notion that the All-American date can cost as much as $30 just for two tickets, refreshments and parking is enough to cause many in these cost-conscious times to rent a movie and put a sack of popcorn in the microwave. Or go to a bargain matinee.

Cable and the growing pay-per-view industry are giving theatrical presentation a further run for its money.

So why now?

“All it takes is one big hit movie and suddenly the whole picture changes,” said John Neal, senior vice president of marketing for the 2,500-screen United Artists Entertainment chain.

Theater operators say the decisions to build the new theaters were made several years ago, during a period flush with hit films and a stronger economy.

Said William F. Kartozian, the president of the National Assn. of Theater Owners: “I’ll bet if you ask a lot of the theater owners now, their answers about deciding to build may be different than a few years ago.”

Kartozian said that real estate considerations are as much a part of the theater business as any other factor. The fact that the eastern and northern states were harder hit by the recession before the West accounts for the fact that Southern California has continued to see theater expansion. He said another key factor is the region’s growing population.

“But things will taper off,” he predicted, in Southern California, like the rest of the nation. “There are few developers beginning projects, real estate is soft and the markets are mature (meaning cities and neighborhoods have enough theaters).”

Almost 100 screens have sprung up in the last two years in Southern California alone, with many concentrated on Los Angeles’ Westside, West Hollywood, Marina del Rey, Culver City and Santa Monica, as well as in growing areas of Orange County such as Costa Mesa, Anaheim Hills and Trabuco Hills.

And now, another wave of openings is under way, timed to coincide with the holidays--one of the biggest moviegoing times of the year.

It’s “probably a coincidence,” that so many new theaters are opening in a relatively short time, said Robert Miller, vice president of film marketing for General Cinema, which is about to open a major Hollywood complex.

The company’s expansion plans got under way before the current recession, Miller said. “The Hollywood Galaxy 6 was four years in the making. We saw an opportunity in the Hollywood area and felt more screens would be a service.” He said the competition with the nearby El Capitan and Chinese theaters is “healthy and good for business.”

However, Hollywood Boulevard theaters east of Highland Avenue have not fared so well and many observers say that area is ripe for a shakeout. Hollywood Boulevard’s three-screen Hollywood Pacific near Cahuenga Boulevard, was recently named as the site for the proposed Hollywood Entertainment Museum. The once-glamorous Egyptian Theater, now operated by United Artists Entertainment, plays primarily second-run features.

Another project that represents a long-term investment is Laemmle Theater’s Sunset 5 in West Hollywood. In the four years since the complex was conceived, the area has undergone a spurt of growth. Four years ago, at the nearby Beverly Center Cineplex, there were 13 relatively small-capacity theaters. Today, there are 23 screens in the area, including the Beverly Connection’s six screens, the single-screen Cinema Showcase and the three-screen Fairfax Cinemas.

By the time the Sunset 5 opens, some industry observers say, the district will be overbuilt. Owner Robert Laemmle agrees it will be crowded but believes his art-film booking policy, which has served him well in such other tight markets as Santa Monica, will counter the competition.

Generally, a theater market--known in the trade as a zone --often can support as many theaters as there are major film releases at any one time, usually 12 to 14.

“That’s why,” said Steve Guilula, president of Landmark Theaters, “a lot of the exhibitors feel they have to jump in certain areas that are growing, when the chance comes, just to maintain their strategic market position. Or face losing out.”

Landmark, which runs the revival house Nuart Theater in Los Angeles, built its four-screen Samuel Goldwyn Pavilion Cinemas in the Westside Pavilion before the big boom in that part of the city. That boom included the opening of the AMC 14 in Century City and growth in Santa Monica, which is putting the squeeze on theater attendance in Westwood Village.

Similarly, Guilula said, Landmark was in a position to watch San Diego’s emerging Hillcrest area five years ago and last week opened the Hillcrest 5. “Here was a lively urban area . . . that had a lot of shops and restaurants. We had served the neighborhood with the Guild Theatre for years, so we knew it was a place we wanted to be.”

But in places where several theater chains have moved in, the proliferation of screens has resulted in “marginal profits” for some exhibitors, Guilula said, as the same number of patrons is spread more thinly. “But it’s been great for the moviegoer who has a lot more convenient locations and newer theaters and added comfort,” he said.

Said United Artists’ Neal: “You’ll be seeing some selling off of non-strategic and low-producing theaters by the chains,” as a result of the industry’s building binge. His company, in fact, has closed down some theaters.

In the best of all possible worlds, most exhibitors say there is a balance for every market. And usually that’s a densely populated, upscale neighborhood with 14 to 16 screens.

In Los Angeles County, and to a lesser extent Orange County, as the population densities of cities deepened, new zones emerged. In North San Diego County, the eight-screen Mission complex is within 7 miles of a dozen screens, but it is considered a “free zone” and doesn’t have to compete for movies, according to Skip Regan, president of Nickelodeon, which opened the eight-screen complex in Oceanside.

In the city of Los Angeles, Westwood Village once dominated the Westside, with Hollywood as the city’s other key zone. As a result, major releases were limited to two first-run screens in the whole city.

But as the population has grown, the Westwood-Hollywood dominance has been broken, primarily by the opening of the AMC 14 in Century City and the Cineplex Odeon chain’s Universal City 18 Cinemas.

Similar fractionalizing occurred in Pasadena, once a one-zone area with theaters concentrated on the city’s east side. But population in the San Gabriel Valley increased and the Old Pasadena neighborhood on the city’s western edge was rediscovered an revitalized. Among the new businesses moving in was a United Artists theaters six-plex, which, in effect, established a new zone on the city’s west end. The debut two weeks ago of AMC’s eight theaters in Old Pasadena effectively filled that zone’s needs.

Theater expansion in Greater Los Angeles, however, has not been evenly spread out. While the last two years has seen unprecedented additions, not a single new screen has been added in the South and South-Central portions of Los Angeles or, for that matter, in downtown Los Angeles.

Said one exhibition executive who did not wish to be identified, the lack of economic growth and the fact that the major retail chains have largely ignored South-Central L.A. is a hindrance. “Where are you going to put a theater unless you’ve have the security and parking that a shopping mall provides?” he said.

The lack of economic energy in South-Central L.A. has been a hindrance to the Economic Resources Corp., owner of the three-screen Baldwin Hills Cinema on South La Brea Avenue. Executive vice president Kenneth Lombard said his company has been unable to reach a deal with the builders of a nearby Crenshaw Boulevard shopping center. In the meantime, he said the Baldwin Hills Cinema will add two screens next spring.

Elsewhere, a number of chains plan more expansion:

* SoCal Cinemas, based in Newport Beach, is studying expansion of its Anaheim Hills 10-plex, Cinemapolis, possibly to 14 screens. It also is looking at sites in Riverside and Vista, according to president Bruce Sanborn.

* AMC is building a 16-screen complex near a Metro Rail Blue Line station in downtown Long Beach that is to open in December 1992.

* In Montebello, AMC has a 10-screen complex set to open next summer.

* Edwards Cinemas, is proceeding with a long-range building program despite the soft movie market. It plans an eight-screen opening at Triangle Square in Costa Mesa in May, plus 10 screens in Westminster, 8 in Del Mar, 5 in Trabuco Hills, 10 in Valencia, 8 in Anaheim Hills and 10 in Santa Maria, over the next year.

Said owner James Edwards Sr., 85, who is widely considered the dean of Southern California exhibitors: “We’ve always believed in building in new areas of population.” He said the current program reflects that thinking.

The current business slump does bother him, however.

“It does affect everyone. Even the movies. But in 61 years in the business, I’ve seen it happen over and over again. To say that the business is dead--that’s just a bunch of bunk.”

Kevin Brass in San Diego contributed to this article.