A Theater Glut
It's a plot that would confuse even the best screenwriter. Long lines, booming concessions, hi-tech sound systems — all making the theater industry look as invincible as Indiana Jones.
But behind the curtain, some economists say, the theater business looks more like the Titanic, CBS News Correspondent Lee Cowan reports.
"Ultimately, everything that drives them is traffic, and the traffic is starting to deteriorate because we're in a soft economy," said Porter Bibb of Technology Partners, which monitors the film industry.
This Thanksgiving Day holiday was the biggest ever for movies, but last year, four of the 10 largest theater chains filed for bankruptcy. The largest, Regal Cinemas, is teetering on the brink, while two others, AMC and Loews Cineplex, announced major downsizing plans.
The theory used to be: "Build it and they will come." In fact, during the 1990s the number of movie theater screens grew by nearly 40 percent. The problem: ticket sales only grew by half that much, leaving theater owners holding the keys to at least 10,000 more movie houses than they could ever hope to fill.
"Currently, we have about 39,000 movie screens in this country, and that's too many," said John Fithian of the National Association of Theater Owners.
That's up from 26,000 in 1994, a nearly 50 percent increase in just six years. Theater owners complain Hollywood hasn't helped. The Grinch may have led a record box office this Thanksgiving, but this past summer, they say, most movies were turkeys.
But the studios aren't helping, either. They're the ones that get most of the ticket revenue, and they decide which movies the theaters will get — flops included.
"They hold the theater owners really ransom. They say, 'if you want to have Castaway, if you want to have The Grinch, you've got to take these other films as well," said Bibb.
"We've had some of the worst product we've ever had," Fithian said.
This puts even more pressure on theaters to make money somewhere else. General Cinema, which filed for bankruptcy three months ago, has scored big with it's "Premium Cinema" — a theater with a bar and restaurant on the outside, and free popcorn and drinks on the inside.
"There's no lines, it's a nice atmosphere, have a glass of wine..it's pretty good," said one appreciative customer.
Bankruptcy protection has given theaters like this the chance to re-group and beg off long term leases that forced them to keep older theaters up and running — even while the new megaplexes were stealing the show.
"To include a theater like this as part of one of those large complexes gives us something else that our competitors aren't offering and hopefully is going to pull out people that might otherwise have chosen to do something else," said Brian Callaghan of General Cinema Theaters.
But in the end, it's not good foo, but good movies that bring in a crowd. If the trend of mediocre movies continues, Hollywood could begin looking for its next disaster movie right in its own backyard.