Mega-Success of Upscale Movie Centers Spawns Valley Sequels

By JENNIFER PENDLETON

Feb. 9, 1999 12 AM PT

SPECIAL TO THE TIMES

When the Sherman Oaks Galleria is reborn next year, adorned with upscale shops, offices and restaurants, it will feature an 18-screen movie megaplex with all the bells and whistles: stadium seating, digital sound and the fancy snacks that are becoming standard in the nation’s increasingly cushy movie houses.

Pacific Theatres Corp., builder of this megaplex-to-come, recently shut down its five-screen theater at the mall so the company can concentrate on constructing the upscale one.

“In the last couple of years, there’s been a tremendous surge in new amenities,” said Pacific’s Executive Vice President Chan Wood. “It looks like it’s what the public wants.”

Wood should know. About a year ago, his company opened the Winnetka 20, a cinema wonderland with 5,900 seats, 70-foot screens, stadium seating and pizazz food, such as Pink’s hot dogs (as in the storied Hollywood eatery).

And that Chatsworth venue, the region’s largest, has since become one of the country’s highest-grossing theaters, with annual box-office revenues exceeding $13 million, according to Wood.

So there are more such theaters on the way. The popularity of the Winnetka 20 and other theaters of its ilk, plus a 10% surge in the national box office take to around $7 billion last year, has prompted a silver screen building boom in the San Fernando Valley and elsewhere.

Recently, Pacific opened another a new megaplex in Northridge Fashion Center (10 screens); Encino-based Mann Theatres turned on the projectors at the new Plant 16 cinemas on the site of the former General Motors plant in Panorama City. Edwards Cinemas built a fancy six-screen theater in the new Commons at Calabasas shopping center on the southwestern edge of the San Fernando Valley.

Common to most is stadium seating, which puts patrons on a steeply angled floor that gives them a better view of the screen, eliminating the ancient “tall, big-haired woman” obstacle by perching viewers head and shoulders above the row in front.

Mann President Jeffrey Lewine said more local megaplexes are in the exhibitor’s future. He is convinced that patrons will pass up conventional theaters, even those closer to home, to reach the plush new venues.

“We’re actively pursuing a site for development,” Lewine said. “We intend to maintain our position in the Valley.” (That could change under new ownership, however; Warburg Pincus, the investment bank that owns the Mann chain, is offering it for sale.)

The goal, theater executives said, is not only to attract patrons, but also to get an edge in the competition to secure the new, hot films from distributors.

“Absolutely, there’s competition,” said Phil Zacheretti, a spokesman for Regal Cinemas, who added that if two competing megaplexes are in the same area, “only one of us is going to get that Star Wars prequel”--the expected next Holy Grail for theater owners, scheduled to be released in May.

In that box-office rivalry, the larger, state-of-the-art complex most often gets the goods, experts said.

The onslaught of the luxury cinemas is forcing older theaters, which seem drearily spartan by comparison, to rethink their competitive strategies.

Short of retrofitting to add stadium seating, which costs millions, some are trying other tactics: sprucing up with new seats, adding brand-name concessions or offering new services, such as guaranteed seating. Some have cut admission prices.

But in this increasingly treacherous marketplace, will all survive?

Unlikely, most observers say.

“Older theaters are going to fall by the wayside because they can’t compete in the environment today,” Lewine said.

It started three years ago. In 1996, AMC Theaters converted the Saks Fifth Avenue store in the Promenade Mall in Woodland Hills into a 16-screen movie house with 3,000 cushy, airliner-style seats--perfect for cuddling--and stadium seating. Other movie houses in the region felt the customer drain immediately.

“We’ve been impacted a great deal by the new AMC complex,” acknowledged Mike Pade, executive vice president of United Artists Theatre Co., which operates the six-screen theater on Canoga Avenue in Woodland Hills.

Not only did the powerful new competitor cut into box-office grosses, it made it more difficult for the UA theater to book top films. “The film companies want to play the newer theaters,” Pade said.

Still, although the UA theater may lack stadium seating--and is hidden behind a Mexican restaurant to boot--it’s still a high-quality venue with a solid future, according to United Artists President Kurt Hall. “Like any other industry when you’ve got new technology, people tend to run to it in the beginning,” Hall said. “But there are still a lot of non-stadium seating theaters in this country doing a lot of business.”

Hall believes the fate of local theaters hangs on their ability to provide higher levels of service. United Artists management is discussing a possible new promotional tactic: Show up 15 minutes before a screening and you’ll get a seat, guaranteed, or be given a free ticket for another performance.

“Clearly we don’t have as new a plant [as the new megaplexes], so we can replace that with other services,” Hall said. “People will come if you have the service.”

General Cinema Corp., which operates the Fallbrook 10 in West Hills and Cinema 7 in Sherman Oaks, insists both theaters remain popular as convenient neighborhood draws. The competition is growing, acknowledged spokesman Brian Callahan, but the company isn’t intimidated.

“We intend to stay strong wherever we operate,” he said.

In recent years, General Cinema started offering brand name snacks, such as Starbucks coffee and Pizzeria Uno pizza. Granted, people don’t go the cinema for the food, but it can be a point of difference that sets venues apart, in General Cinema’s view.

Another byproduct of the Valley screen explosion: Art house and independent films, once the nearly exclusive domain of the Town Center Five, a Laemmle Theatres outlet in Encino, are now readily available on screens throughout the area.

Vice President Greg Laemmle said the Encino theater’s box office grosses are flat, which is disappointing considering the popularity of crossover hits, such as the artsy crowd pleaser “Shakespeare in Love.”

“It used to be a big thing for an art film to play in the Valley. Now, it’s playing in five places,” Laemmle said.

The Los Angeles-based art house chain is focusing on basics: “We are going to continue to do what we do best and consistently, and that’s really focus on films for our audience,” Laemmle said.

Whether that will sustain it, time will tell, but Laemmle Theatres got on the luxury bandwagon last week, opening a theater in Pasadena that Laemmle believes is the first art house to offer stadium seating.

The 18-screen Cineplex Odeon in Universal City, adjacent to Universal CityWalk, also lacks stadium seating, but the management behind this top venue is determined not to lose ground.

Marc Pascucci, Loews Cineplex Entertainment senior vice president of marketing, said Loews will give it “a slight face-lift”--new seats and decor--admittedly as a response to the changing marketplace.

“It would be easy to sit back and say, ‘We don’t have to do anything,’ but we can’t do that,” Pascucci said. “There is increasing competition and increasing technologies out there we have to address.”

Following the example of a Loews Cineplex in New York City, the company intends to add an IMAX theater with three-dimensional capabilities, connected to the Universal City theaters, sometime in 2000, he said.

Some of the Valley’s older theaters have taken the dramatic step of cutting ticket prices. Pacific’s Topanga Theatre in Woodland Hills, at Victory Boulevard and Topanga Canyon Boulevard, and Northridge Cinemas, at Parthenia Street and Tampa Avenue, offer $1.50 admission.

“The theaters are old and obsolete” so Pacific will operate them as discount houses until it decides what to do with the properties, said Pacific’s Wood.

The independent 35-year-old Americana 5 theater in Panorama City has been charging slightly reduced $6 admission for first-run films for the past two years. Now, with the arrival of the Mann 16 megaplex nearby, owner Gene Harvey is anticipating trouble.

“Sometimes with a situation like this--independent versus big company megaplex--they try to hog all the product and don’t want us to play any first-run [films],” Harvey said.

Harvey’s not convinced that stadium seating is the end-all. “Stadium seating is wonderful, and yet every theater does not need to have it,” he said. “Some people don’t like going up and down the steps.”

United Artists’ Hall also points to one of the negative by-products of the new venues: the inevitable crowds. “Some people don’t like the hustle and bustle of the megaplexes,” Hall said.

Probably true. But are there enough such old-fashioned fans to keep the aging theaters in business?

No way, says Wood. “All these old theaters aren’t going to survive.”

Times staff writer Karen Robinson-Jacobs contributed to this story.

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Where They Are

1) Pacific Theatres Fashion Center 10: 9400 N. Shirley Ave., Northridge

2) Pacific Theatres Winnetka 20: 9201 Winnetka Ave., Chatsworth

3) Pacific Theatres Northridge : 19401 Parthenia St., Northridge

4) Americana 5: 8700 Van Nuys Blvd., Panorama City

5) Mann Theatres Plant 16: 7876 Van Nuys Blvd., Panorama City

6) Pacific Theatres Topanga: 6360 Topanga Canyon Blvd., Woodland Hills

7) General Cinema Fallbrook 10: 6733 Fallbrook Ave., West Hills