- The Washington Times - Sunday, May 22, 2005

It’s a Saturday night in suburban Kansas City and Wayne Sutter and his family are waiting outside the AMC Studio 30 megaplex to see “XXX: State of the Union.”

The giant theater — its spotlighted facade can be seen on the highway a half-mile away — anchors a shopping center, attracting people with virtually every major commercial film currently playing, many on multiple screens.

“It’s nice to come here and have all the variety in one place,” Mr. Sutter said.

While it seems as if gigantic movie theaters have been with us forever, the megaplex theater — defined as having 14 or more screens and modern amenities like stadium-style seating — has just turned 10 years old.

AMC Entertainment Inc. opened the first, the Grand 24 in Dallas, on May 19, 1995, ushering in a new concept that used its scale to change how movies are shown. Ticket prices and audience expectations have gone up in the 10 years since, and megaplexes now face problems of their own.

The idea was to match the successful Big Box stores sprouting across suburbia, said Peter Brown, chief executive officer of Kansas City-based AMC, which now operates 229 theaters, 77 percent of which are megaplexes.

“It might make some sense to think of the movie theater as a superstore of entertainment,” Mr. Brown said. “It was not just bigger, it was better. It was a better mousetrap.”

Improved facilities and the ability to watch whatever movie they wanted when they wanted it brought people through the door and bulked up Hollywood’s grosses. Since 1995, the number of tickets sold has grown 19 percent to 1.53 billion last year and annual box office receipts have blossomed 76 percent to $9.53 billion, according to the National Association of Theater Owners.

The megaplex has also contributed to the average ticket price increasing $2 over the last 10 years to $6.21. But National Association of Theater Owners President John Fithian said many things went into that, including increased costs for renting films from studios.

“When you offer consumers a better theater experience, that cost goes into the mix, but it certainly is not the only factor,” Mr. Fithian said.

The megaplex hasn’t always been good to the theater industry that spawned it. After the Grand 24 opened, most major theater chains raced to build their own megaplexes or retrofit older theaters, racking up huge construction costs. Most of the industry’s main players filed for bankruptcy in the late 1990s, leading to widespread consolidation.

Audiences were willing to go to theaters farther away because they liked the seating better and theater chains filed for bankruptcy to get out of leases on theaters they wanted to get rid of, said theater analyst Dennis McAlpine of McAlpine Associates.

Since peaking in 1999 at 37,131 screens, the number of screens was down to 36,012 last year as companies closed smaller, less-profitable theaters slightly faster than they opened new ones. But there is a concern that the screen count is still too high, especially since ticket buying has apparently leveled off. Last year, gross revenue stayed flat at $9.5 billion, while the number of tickets sold actually dipped 2.5 percent.

AMC and its main rival, Regal Entertainment Group, both had a down year and flat revenues in 2004. Regal reported profits of $90.8 million, down 51 percent from $185.4 million the year before. AMC, which was sold in December to a private investment firm, reported losing $67.2 million through its first three fiscal quarters, ending Dec. 30.

Among the megaplexes’ problems is that their greatest strength — the ability to attract large crowds — means a majority of people interested in a movie see it in the first few weeks, leading studios to pull the film from circulation sooner. That cuts into theater revenues.

In addition, movies are coming out on DVD an average of four and a half months after hitting the screen, a full two months earlier than in 1994 and almost a month earlier than just two years ago.

The megaplex also has affected the market for independent and foreign films. While industry experts say their limited audiences don’t fit in the megaplex’s economics, the art houses that show them now reflect some of the advancements of the megaplex because patrons have demanded them.

“We’re not showing ‘Star Wars’ so we don’t need a state-of-the-art 1,000-seat theater, but we do need a state-of-the-art 300-seat theater,” said Ray Price, vice president of marketing for Landmark Theaters, which operates 209 screens in 22 markets. “You build different theaters for different goals.”

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide