Mining the Silver Screen
Step aside, department stores. Here come the cinemas.
Throughout Southern California, scores of new movie theaters are making their screen debuts at shopping malls and other retail centers. Hundreds of new theaters have been built in recent years and hundreds more are planned. Every week seems to bring another announcement of a new multiplex--anywhere from half a dozen to a dozen or more screens.
Silver screens are proliferating for a variety of reasons.
For one, filmgoing is on the rise. Americans in 1996 bought more movie tickets than in any other year since the 1950s--1.3 billion of them, according to Jim Kozak, communications director of the North Hollywood-based National Assn. of Theater Owners. That figure still falls far below the peak of 4 billion in pre-television 1946, though the box-office take last year was the biggest dollar total ever, $5.9 billion.
New cinemas also are appearing in malls because of changes in movie theater design, most notably stadium seating, in which terraced and more steeply sloped floors provide an unobstructed view of the screen for everyone. Movie chain executives say the new, more desirable design has rendered many old theaters obsolete.
But possibly the biggest reason screens are proliferating is that malls need them to bring in foot traffic--more than half the people who go to a movie in a mall do some shopping.
“What you’re seeing in Southern California is something that’s happening throughout the country. Theaters are now being treated as anchor tenants,” said Howard Lichtman, an executive vice president at the Cineplex Odeon chain, which is in the midst of a three-year, 500-screen national expansion.
In many cases, movie theaters already “have become the anchors” at shopping centers, said Rich Given, executive director of marketing and publicity for the Mann Theatres chain, which Given said will expand its 400 screens in California and metropolitan Denver by about 100 theaters over the next several years.
The emergence of cinemas as first-choice tenants represents a fundamental change in American retailing, which for decades depended on department stores to serve as people magnets for malls and shopping centers.
But the department store industry has consolidated, leaving gaps in shopping centers, and now mall owners are turning to movie houses. One of the first and best examples is at the Promenade in Woodland Hills, where marketing director Ken Stephens said foot traffic has increased substantially since a Saks Fifth Avenue store was converted in May 1996 into a complex of 16 AMC theaters, all with stadium seating.
Stephens said besides a steady and gradual increase in traffic at the mall, which previously had no theaters, “we definitely see a spike in traffic when there’s a big blockbuster” movie playing.
While existing malls are turning to theaters as a way to attract shoppers, theaters are also being incorporated into new malls from the outset: 52 screens at the Ontario Mills outlet center, 30 more at the CityMills center under construction in Orange, and multiplexes of all sizes at other developments around the Southland.
Even Pacific Theatres’ venerable Cinerama Dome, a Hollywood landmark that opened in 1963 “with stadium seating,” is adding 15 screens, said Neil Haltrecht, vice president of the real estate division at Pacific, which has about 300 screens in California and Hawaii and plans to double that number in three years. He said the Hollywood screens will be part of a new “Cinerama Dome Entertainment Center” that will include shops, a health club and office space.
Such plans reflect an about-face in the way the retailing community views movie theaters, according to Simon Perkowitz, president of Long Beach-based Perkowitz & Ruth architects, which specializes in theater design.
Mall operators “used to think of theaters as a negative because they require so much parking, but now they see them as a benefit” because of the shoppers they attract, Perkowitz said.
Meanwhile, movie house operators are developing a new attitude too, he said, reflected in designs that include spaces next to theater lobbies where moviegoers can sit for a quick meal, a wider variety of food and snacks, and lobbies decorated with murals and old movie memorabilia.
These are all signs that theater operators “view the theater as a place where people are encouraged to spend some time rather than just go to the movie and then leave,” Perkowitz said. The shift in attitude has occurred in just the last few years, he said, spurring theater owners to turn to “designs that are a little bit of a throwback to the time when movie theaters were more lavish and more like a performing arts center.”
Instead of the box-like and often cramped and featureless multiplexes of the 1970s and ‘80s, he said, the new theaters have higher ceilings, more decorative lighting, murals, and touches of marble, porcelain, brass, chrome and neon to make them brighter and more appealing.
Such changes are credited with helping to revive a number of malls, but some movie chain executives and mall operators are already saying they may be headed toward too much of a good thing.
“New theaters cannibalize old theaters,” Cineplex executive Lichtman said. Although the movie-viewing market has grown, he said, it hasn’t grown at a rate commensurate with the theater expansions.
“Theaters are not a panacea,” the Promenade’s Stephens said. “They made sense here because they brought something new to the market, but they are not the solution in every case.”
Lichtman said Cineplex, now in the midst of its previously announced merger with Sony’s Loews Theaters chain, estimates it will have to shutter about 100 of the 3,100 screens the merged entity will have.
What will happen to outdated movie houses “is a good question,” said Pacific’s Haltrecht.
“Some of the old theaters will be modernized and some will probably be converted to other uses, but there’s a fortune to be made for the person who has a good answer,” he said.
Despite the uncertainty over what the industry will do with its old theaters, Haltrecht is upbeat about the prospects for continued growth in moviegoing because of the basic human need to get out of the house.
“You can order take-out food from some of the best restaurants in Los Angeles, but people still go out to eat. You could stay home and eat take-out food and watch a video, but people still like to go to the movies,” he said.
Those who own and operate malls are counting on such growth as well, according to a 1996 study commissioned by the International Council of Shopping Centers, which showed that about 60% of movie patrons of mall theaters shopped in the mall during their visit, while nearly 40% saw the movie and left. Overall, the movie viewers spent 30 minutes at the mall before seeing a film.
However, the study suggested that it remains an open question whether the movies will offer a happy ending for mall owners and operators over the long term. Many institutional investors, it said, remain “restless and unsure” about whether silver screens will provide a lasting silver lining for the retail industry.
