Movie theaters thrive in downturn

LA CROSSE -- For about two hours, laugh, weep, shiver with fear, feel your adrenaline pumping -- all for $10 or less, preferably in a comfy chair, maybe with a barrel of buttered popcorn radiating warmth in your lap.

LA CROSSE -- For about two hours, laugh, weep, shiver with fear, feel your adrenaline pumping -- all for $10 or less, preferably in a comfy chair, maybe with a barrel of buttered popcorn radiating warmth in your lap.

Sound like a bargain?

In a downturned economy, going to the movies is an enduring entertainment option, even as family budgets lop off vacations, lavish dining and $80 blue jeans.

Still one of the cheapest out-of-home entertainment venues, movie theaters are ringing up profits with the proliferation of premium technology, such as IMAX and 3-D, and because movie-going -- even during the Great Depression -- has always been driven by product: movies that people want to see.

Attendance nationwide was up about 4 percent in 2009 from the previous year.


"As an industry, theaters had a record year last year," said Carlo Petrick, spokesman for Milwaukee-based Marcus Theatres Corp., which operates the Marcus Cinema in La Crosse at 2032 Ward Ave.

Attendance also was up in 2009 for the Marcus chain of theaters, Petrick said, adding the company doesn't give out attendance numbers.

"What has happened is people are not spending a lot of money taking their family on vacations and long weekends and the Dells and destinations like that," Petrick said. "They're staying home more often. But they're still looking for ways to have fun and entertain. And movies are an economical way to take a family out for an entertaining evening or afternoon."

Petrick also said attendance has been up in the past year partly because many good movies were released. He also said attendance at 3-D movies "has been really good. People have embraced the technology. And the 3-D movies that have been released have been very good films."

Carmike Cinemas Inc., based in Columbus, Ga., operates the Valley Square 6 movie theater complex near Valley View Mall and has reported its attendance was up 3.6 percent in the first nine months of 2009, compared with the same period a year ago. It hasn't announced figures for the entire year yet.

Both Marcus and Carmike offer promotions that help attract customers.

For example, Marcus is offering a Frosty Flicks kids' winter film series at 10 a.m. Saturdays with tickets priced at $3 and popcorn included. And Carmike is offering Stimulus Tuesdays, with popcorn and a drink each priced at $1 and candy priced at $2.50.

"Because of the low cost, people don't feel bad about going to the movies. But only if they're interested in them," said Warren Miller, an analyst with Morningstar who tracks Regal Entertainment Group and Cinemark, two of the country's biggest theater chains. "That's why the movies, at least theoretically, are recession-proof," he said.


While customers abandoned other retail businesses, forcing them to shrink inventory, lay off workers or file for bankruptcy in 2009, moviegoers plunked down a record $10 billion at the box office, a 10 percent boost nationwide from the year before.

Owners of those box offices are emerging superstars in an otherwise moribund retail landscape, drawing foot traffic and sparking business where they open.

Things weren't always so golden for the movie-theater industry.

Movie companies moved into the new millenium building stadium-seating theaters rather than renovating existing ones, said Miller, the Morningstar analyst. The resulting glut of theaters, compounded by some particularly bad movie years, bankrupted some companies, he said.

Expansion now is more rational, mostly coming through the purchase of existing theaters, Miller said.

New screens we're seeing now were probably on the books before the recession hit, said Eric Handler, analyst with MKM Partners. The number of screens is growing at about 1 percent per year, he said.

Theaters are certainly poised to gain revenue from technology, some of which streamlines operations or can command premium prices, typically a few dollars per ticket, analysts say.

That's crucial when you consider that 80 percent of "Avatar" viewers are choosing to pay a few bucks more to see it in 3-D, said Brandon Gray, president and publisher of the online box-office reporting service Box Office Mojo.


Rather than relying on film, theaters are converting to digital projection, which is essential for 3-D but also cuts the cost of handling film, which can noticeably degrade with each showing.

Unlike film, digital projection permits quick duplication if a movie proves more popular than anticipated so it can be shown on multiple screens, Miller said.

Gray cautions against relying heavily on technology to boost box-office revenue.

"The industry is focused on technology, but the story is what people pay for," he said. "There is no indication that 3-D is here to stay. It could be a novelty."

Attendance at 1.4 billion estimated for 2009 is a 4 percent jump from 2008, he said.

Rather than economic forces, what's showing will always drive attendance, he said. "If the selection isn't appealing, people won't go."

The notion of a recession-battered public turning to the big screen for solace and escape is almost mythical, Miller and other analysts say.

"I think it's more that movie theaters are just not as tied to the economy; they're not cyclical," Miller said.


Movie theaters do have to keep ahead of the home movie theater, which is gaining in appeal, he said.

IMAX theaters combine film and digital technology with gigantic screens for what the company calls a superior viewing experience. And theaters in selected markets are trying to set themselves apart by offering high-end touches such as ushers, upgraded and reserved seating, seated dining and full bars.

-- Copyright (c) 2010, La Crosse Tribune/Distributed by McClatchy-Tribune Information Services

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