Theater Chains Pin Their Hopes On Two Films

from the doubling-down dept

There's been a lot of talk about how bad things are for theater owners these days, as the quality gap between what people can get at home and what they can get at the theater continues to narrow. It doesn't help these companies that Hollywood as a whole is faring poorly, with many questioning the studios' traditional blockbuster-reliant model. However, two major theater chains, Cinemark and AMC are set to do IPOs soon, amidst a moderate uptick in ticket sales and what's expected to be a strong summer movie season. Both chains were taken private a few years ago, when market sentiment was particularly negative on these companies. But has anything really changed for them? At the moment, the best argument for them seems to be that this summer will see the release of Spiderman 3 and Pirates of the Caribbean: At World's End, both of which are expected to be mega-hits. But it's ridiculous to judge the prospect of these chains on two movies that will come and go over the next few months. If the overall economics of the industry continues to deteriorate, a couple films coming out this summer don't mean anything. It's also worth mentioning that Hollywood is once again going back to the sequel well in hopes of drudging up a couple of hits this summer, and yet as one financial analyst puts it, "There's an unbelievable amount of marketing dollars being spent to promote these films over the next couple months." So not even the sure things are sure things unless an unbelievable amount of marketing dollars are spent.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, Apr 25th, 2007 @ 2:08am

    Spider-Man 3. Not Spiderman 3.

    Stan Lee insists the hyphen is important. He claims it differntiates a man with the powers of a spider from a man who is a spider.

    So there.

     

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  2.  
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    Anonymous Coward, Apr 25th, 2007 @ 2:16am

    I wholeheartedly agree with those that think same day DVD release would only serve to accelerate the demise of movie theatres. I see no advantage or benefit to the theatre operator -- none, zero, nada.

    From the customer perspective, there would be short term benefits; more choices, more options is always a plus for the customer. Those benefits are only temporary though -- as movie theatres go out of business and the multiplex cinemas go the way of the drive-in, customers will end up having less options. The simple fact of the matter is that there will be no more movie theatres if the business of theatres is not viable.

    It's clear to me after reading these threads that there's SO MUCH hostility towards the "movie experience" that I can't help but feel the demise of theatres is inevitable. In the public conciousness, the perception is that movie theatres are filled with nothing but crying babies, annoying cell phone users, idle chatters and laser pen wielding teenagers. These horror stories are so pervasive and so often repeated that I can't help but suspect that customer dissatisfaction has turned them into urban legend. Sure, I've had bad experiences at the movies -- some of the very ones I just listed -- but they are the exception rather than the rule.

    I work in IT (like many others who frequent TechDirt) and this whole backlash against movie theatres reminds me a little of the Microsoft backlash. At some point, the hostility towards Microsoft became so prevalent that it almost became hip to hate them. I knew Microsoft was in serious trouble the day I overheard two co-workers with absolutely zero technical skills/knowledge talking about the evils of Microsoft. They were essentially just repeating (mangling might be a better word) all of the negative things that they heard someone else saying about Microsoft. These were the kind of end users who say things like "I went to The Google last night..." and yet there they were, doing there best to imitate a couple of angry Slashdot veterans. The tone of the conversation was such that if Steve Ballmer had suddenly appeared in the room, I would have been witness to the birth of a lynch mob (minus the pitch forks and torches...damn OSHA to hell).

    That last paragraph was sinfully off topic but what I was trying to convey is that I don't believe there's anything that can save the theatre business because there's just too much bad blood between them and their customers. Releasing DVD's concurrently would be like replacing the coffin maker's hammer with a nail gun...

    -Gonnosuke

     

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  3.  
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    alternatives, Apr 25th, 2007 @ 2:32am

    Good riddence

    Let the theaters die and may they take the corporations that buy laws like the DMCA and try to remove fair use.

    The DMCA and groups like the MPAA is why *I* stopped consuming movies and music. I voted with my dollars.

     

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  4.  
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    Ramon Casha, Apr 25th, 2007 @ 2:51am

    Adapt or die

    When was the last time that Cinema theatres showed us something really innovative to make us want to go again and again? I think the last one was 3D flicks - and these tend to be few and far between. Before that it was colour - at a time when TV was black and white. In so many decades, is that the best they could come up with?

    Home entertainment has moved ahead in leaps and bounds with surround sound and hi-res lcd projectors... not to mention much more comfortable seats, the facility to pause when you want, mountains of pop corn or anything else you want, at a humane price and basically every other comfort I can think of.

    As time goes by, the reasons for going to see a film at a cinema are disappearing and the only thing that theatre owners do about it is complain and demand longer time-windows until DVDs are released... which of course leads to piracy. If the cinema theatres are incapable of coming up with a viable business model, then they SHOULD close down.

     

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  5.  
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    Anonymous Coward, Apr 25th, 2007 @ 3:35am

    I still go to theatres three times a week. In the university district of seattle where I recently moved, there are theatres that show both older (our man in havana, the third man) and newer movies (grindhouse, black snake moan) in an atmosphere of reasonable prices (6.50 during the day and all day tuesday) and adults (no screaming babies or cell phones). I am always happy to support these theatres over watching just on a tv (I sold my last tv 6 months ago) watching a dvd. If a theatre shows classic old or new movies, people will pay for them. One of the theatres is even a "non-profit" with all volounteers and I pay for the 4 dollar popcorn, because they will continue to show those movies the big chains won't. And once the FCC take sover cable, we may never see again.

     

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  6.  
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    Lastdon, Apr 25th, 2007 @ 4:00am

    Hollywood

    Hollywood spends an astronomical sum on marketing which is very unfair on the audience, who are forced to buy unimaginative & uncreative stuff at very high cost. Hollywood must decentralize its outlook about movies & focus on developing local content. This will lead to a reduction in the cost of production & marketing. The movies with universal appeal could be taken to an international audience. This will be a great fillip for artists throughout the world, & add tremendous diversity to the entertainment industry & widen our outlook. Hollywood can actually use this oppurtunity to make money & bring the world closer.

     

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    Vincent Clement, Apr 25th, 2007 @ 5:22am

    Maybe it's time for the movie studios to take ownership of the theatres?

     

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    BTR1701, Apr 25th, 2007 @ 5:27am

    Superior and then some

    > as the quality gap between what
    > people can get at home and what
    > they can get at the theater continues
    > to narrow

    Narrow? In my case, it's closed the gap completely and quickly moving in the other direction. My home theater experience far surpasses what I get at the local cineplex.

    At home, there are no squalling babies, no bored kids running up and down the aisles while their oblivious parents ignore them, no teenagers laughing and giggling through the whole movie, no cell phones ringing, no bright little LCD screens popping up like firelflies in the dark theater as those aforementioned teenagers text-message each other continuously, no one crawling all over me to go to the bathroom (and when I have to go to the bathroom, I don't have to miss any of the movie), no uncomfortable seats, the picture is always in focus, the surround sound is always on, no having to drive across town or pay for parking, the snacks don't require a small loan to afford, the movie starts when I want it to, and the per-movie "ticket price" is cheaper.

    Watching a movie with my girlfriend on my plasma screen and surround system at home is far superior by an order of magnitude to anything I find at my local theater chain.

     

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  9.  
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    _Jon, Apr 25th, 2007 @ 5:40am

    The topic of the post is that these companies are going to IPO after going private. Given the facts and opinions presented in the post, this creates an interesting situation.

    Consider three main reasons why a company goes public;
    1. Additional capital required for expansion
    2. Share the risk / reward with investors
    3. Earn "reward" for previous investment

    Clearly, these companies don't need money to expand. The investment firms that hold them now aren't short on capital - they had the money to take them _private_.

    Given the poor future prospects, I suspect the reason these companies are being IPO'd is because the long-term forecast is so poor. These investment firms are looking to get money from investors to recoup their money before the market goes belly up.

    I predict that within 5-10 years of these IPO's at least one of the companies will be in bankruptcy. In fact, they will probably take on huge amounts of debt, figure out a way to spend / funnel *that* money back to the current investment firms, then go belly up. Investors and creditors (e.g. us) will be left with the bill and the current owners will get rich(er).

     

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  10.  
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    BTR1701, Apr 25th, 2007 @ 5:50am

    Re: Urban Legend

    > These horror stories are so
    > pervasive and so often repeated
    > that I can't help but suspect
    > that customer dissatisfaction has
    > turned them into urban legend.

    No urban legend here. I live in a heavily surbanized area where the local teens from about four different high schools use the movie theaters as a social networking venue. They're not there to see the movie, any movie. They're there to see and be seen by the other teenagers and literally (no exaggeration) every single movie I've been to has been plagued by laughing, giggling, cell phone use and constant running in and out of the theater. Complaints to the management have been useless.

    Perhaps the reason the horror stories are "so pervasive" as you put it, is because in many areas the *bad behavior* is just as pervasive. If you haven't personally noticed it, then you're just lucky.

     

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  11.  
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    Wolfger, Apr 25th, 2007 @ 6:32am

    Re:

    "Spider-Man 3. Not Spiderman 3.
    Stan Lee insists the hyphen is important."

    I see. So it's Comicbook-Nerd, not Comicbooknerd. :-D

     

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  12.  
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    Wolfger, Apr 25th, 2007 @ 6:35am

    I think the theater industry is relying more on 2 technologies than 2 movies. There have been a lot more movies (300, Spider-Man 3) coming out in Imax format (which few if any people can replicate at home, and Disney's new digital 3-D which requires special hardware to show. It's these unavailable-at-home formats that will save the theaters from utter ruin.

     

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  13.  
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    Mike4, Apr 25th, 2007 @ 6:39am

    In mentioning the blockbuster films of the summer, you failed to recognize Transformers.

    I agree that movie theaters don't offer a better experience that many of us can get at home, but I also think there are quite a few good movies being released this summer and high ticket sales might just give everyone a false hope of a resurrection. Quality movies should overcome many of the problems that theater owners face nowadays, because there really is no alternative. If a movie is quality and enough people are talking about it, a lot of people will pay to see it, rather than waiting for the DVD. When bad movies are released, most people will opt to stay home and watch a better movie on their 50" HDTV (which, by the way, offers a better picture quality than the bigger, fuzzy movie screen).

    Now if movie theaters started showing films in HD, that would be a different story.

     

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  14.  
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    chris (profile), Apr 25th, 2007 @ 6:42am

    Re: Hollywood

    add diversity?

    focus on local content?

    bring the world closer?

    aparently, you don't know what hollywood is about.

     

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  15.  
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    Overcast, Apr 25th, 2007 @ 6:59am

    I would hate to run a business that depended on Hollywood's ability to make entertaining movies....

     

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  16.  
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    James, Apr 25th, 2007 @ 7:28am

    #2 .. are u insane?

    You must not go to the theatre as much as you think you do.

    Why do you think people make comments about how bad the movie experience has gotten? Are they making it up?

    Lets review, for those who've been sleeping, going to the movies (at least here at the "purple palace" megaplex as i call it):

    - commercials, before the movie
    - people talk during the film
    - people answer their cell phone DURING THE FILM
    - you need a small loan to buy anything @ the concession stand
    - last few times a small mexican family (with about 4 children in tow) arrives 5 minutes into the previews (yes some of us enjoy them) making plenty of noise, talking about where to sit

    Hmmm.. lets see why would anyone NOT want to pay $9.50 a ticket? When they can enjoy all of that?

    I have no idea.

    Hollywood needs to fix their crappy movies.. but theatres have to got to fix their crappy movie environment.

    Last movie I saw was "300", at an IMAX theatre and it was actually a nice movie going environment. Perhaps $11 or $12 a ticket is a good way to keep the riff raff out?

     

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  17.  
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    Peet McKimmie (profile), Apr 25th, 2007 @ 8:28am

    One other geeky comment.

    Another reason why the "Multiplex Experience" is poor, from my POV.

    I used to work in the TV industry, and if I've really enjoyed a movie I like to sit through the credits to see who was responsible for providing my enjoyment. Unfortunately, in my local multiplex, even if you manage to run down the steps and stand at the front somewhere there won't be people blocking your view by sauntering to the exit as the credits start to roll, the operators will fade up the house lights and stop the credits prematurely as soon as 2/3rds of the people have left, presumably so they can let the next "house" in sooner and show more ads. I prefer DVD any day.

     

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  18.  
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    Dam, Apr 25th, 2007 @ 8:54am

    Re:

    Movie studios used to own their own theaters. That's why old theaters had names like Paramount and RKO. The ownership was broken up by anti trust laws back in the 1930's.

    However, I think in today's diverse entertainment environment, it would be difficult to claim ownership of the theaters is a violation of anti trust.

    Besides, with the crap Hollywood puts out totday, would YOU want to own a theater?

     

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  19.  
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    Joe, Apr 25th, 2007 @ 8:57am

    I would go to the theaters if they made the food cheaper. 10 bucks for popcorn and soda? I'll wait for the DVD.

     

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  20.  
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    Peet McKimmie (profile), Apr 25th, 2007 @ 9:03am

    Re: Re:

    Besides, with the crap Hollywood puts out totday, would YOU want to own a theater?


    Yes. Yes I would.

    But I wouldn't show movies in it.

    Based on comments above about how movie theatres have become de-facto social networking locations, I would go the whole hog. Charge $10 for a "day ticket", show pop videos and promos on a continuous stream and bring back the old-style "usherette" as a combination walking shop and chaperrone, turning it into a safe central venue for kids to meet up and misbehave. I'd still be getting the door receipts; they'd still be buying the overpriced burgers and Coke (or risk being thrown out and their ticket confiscated for bringing in their own food) but I wouldn't have the overheads of actually paying for the movies.

    In fact, the screen would become a net revenue stream, with record labels and advertisers paying me to place their product in front of teen and pre-teen* eyes.

    (*If the theatre was a multiplex I would split it between pre-teen, with lots of adult supervision, early teen and older, each being shown content that was age-appropriate...)

     

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  21.  
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    Celes, Apr 25th, 2007 @ 10:37am

    Re: #2 .. are u insane?

    I must be one of the lucky ones - there's a drive-in theater pretty close to where I live. The ticket price isn't too bad. The concessions are pricey, but I buy them to support the place (as they explain it, the charge for the tickets barely covers their royalty cost).

    Don't have to worry about sticky seats and floors - your car is as clean as you are. And any cell phone disturbances come from your own family, or whoever you went to see the movie with, and you have every right to turn around and tell them to shut the heck up or get out of the car. Or just turn your stereo, which is playing the movie, up so loud they can't hear the person on the phone. ^_^

    It's pretty much the only theater I visit anymore because it gives me some control over my environment - I totally agree that most normal theaters offer a horrible experience if you're actually there to see the movie.

     

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  22.  
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    Jared, Apr 25th, 2007 @ 10:47am

    You also forgot...

    You also forgot Harry Potter 5 coming out in July. That may very well blow the pants off of Spidey, Transformers and Pirates, all of which look good and which i will see. My theatre experiences are usually not that bad other than the severe pain in my wallet. As one comment above says, the theatre owners need to innovate and offer a better and more unique experience: Better seating, food you can order and have delivered to you, more adult sections where you could have more adult beverages if your patrons so chose and other things. They need to make things appealing. Less exorbitant pricing would be a good start too.

     

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  23.  
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    DashRiprock, Apr 25th, 2007 @ 12:01pm

    flattened

    I have to agree and disagree with some of the comments posted above. Seeing a movie at a theater the pros and cons:
    Pros: The going to a movie experience, big screen, big sound, big popcorn and pop without the wife hassling me about cholesterol (she never goes); first run (hopefully without having your expectations contaminated by "professional" reviewers who only give 4 stars to John Wayne movies (sorry John).
    Cons: big price; big background distraction from aforementioned asshole brats with cellphones and a teenage sense of humour they think everyone else wants to hear; expensive concession bar...
    But the the number one biggest bummer is that a lot of these big entrance fee movies are crap/boring. I can't remember how many times I watched a movie on DVD and said: "Man I'm sure glad I didn't have to pay full price to see that." ( And don't even get me started on buying a CD that ends up only having one good song on it - Hurray $.99 downloads of individual songs you can preview)
    That being said, I have a 4 thousand dollar surround system with a 46" high def TV. Why would I ever want to pay even more to see a movie at a theater? I've kind of narrowed it down to the following criteria: It has to be a new release, with at least the expectation of some "edge of the seatness/special effects extravaganza" and has to be a movie that lends itself to the advantages of big screen big sound. (sorry "MY Dinner with Andre")
    BUT!!! Theater owner/managers need to start being more proactive about goons who ruin the BIG SCREEN experience for those who have paid good money to see it. The price of a ticket is not an entitlement to be an asshole at the expense of other people. Do something about it or fail.

     

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  24.  
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    fuse5k, Apr 25th, 2007 @ 12:27pm

    free business idea

    I bet that someone could make a LOT of money right now.
    It seems so simple, but obviously there are some that dont get it.
    People are basically tired of the corporations owning the movie going experience.The expensive tickets, the rip off snacks etc.

    So if the corporations cant provide what the people want, why doesnt joe independent jump in and make the bucks.

    You could easily find a suitable building and convert it, and make the experience worth the cash, the problem isnt that noone wants to go to the movies any more. the problem is that the charge for the tickets is not equal to the value of the experience you receive.

    For example, I would pay £5-10 to go to a cinema, where no under 18's were permitted i didnt feel like i had been bent over and dry humped at the desk when paying for snacks.
    Smaller, local companies have the knowledge of the local area and possible niche's in the market.

    I would honestly be sad to see the end of the cinema, but i can see that it would be easy enough to make it worth it again.

     

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  25.  
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    Dosquatch, Apr 25th, 2007 @ 1:13pm

    Re: (by Peet McKimmie)

    Yes. Yes I would.But I wouldn't show movies in it.

    Peet, This is genius.

     

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  26.  
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    Peet McKimmie (profile), Apr 25th, 2007 @ 1:29pm

    Re: Re: (by Peet McKimmie)

    Thanks. :-)

     

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  27.  
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    Alan Smithee, Apr 25th, 2007 @ 3:00pm

    I went from working IT to running an independent movie theatre. I love seeing these conversations.

    People still love to see movies! It's amazing how many people show up and say, "I'll take a ticket for whatever shows next".

    Distro/Studios take 60%, that goes down to about 40% the more weeks a movie is playing. That's the percent of the ticket prices. I still have rent, wages, electricity and the rest of overhead to pay. Concession sales is what keeps us open. Yes, it's expensive. Any suggestions?

    Being independent, I'm screwed by the distributors over what I can show and how many times a day, I need to show them. The studios don't want to see me go under, so I get floated big name stuff that the usual chain theatres get once or twice a year.

    Distro is done in word of mouth way that makes me wonder how much of it is still run by the mob though.

    I hate paying money at a theatre to have to see an ad, but I still need to sell slide ads in between the movies. I won't run commercials and "luckily", I haven't been offered enough money to run them against my own best wishes.

    I haven't had a complaint over cell phones or rowdy teens, but how most people who see a high-brow art film aren't the types to abuse us in that way.

    I'd like to run union projection, but I can't afford it. I do care, and I hire people who care. That's a problem with most theatres. Managers (glorified 20 year old kids) get a 5 minute explanation on how to run a film through a projector. It's sad that our main attraction (showing a movie), gets abused this way by most theatres.

     

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  28.  
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    BTR1701, Apr 26th, 2007 @ 6:21am

    Re: free business idea

    > For example, I would pay £5-10 to
    > go to a cinema, where no under
    > 18's were permitted i didnt feel
    > like i had been bent over and
    > dry humped at the desk when
    > paying for snacks

    There's a theater in Austin, Texas, called The Alamo Drafthouse that is the only theater I will still go to and it's precisely because they make the experience different and attractive, like you say. (FYI: the Alamo Drafthouse made an appearance in the recent movie "Grindhouse".)

    For one thing, they have a liquor license so they can sell beer and other alcoholic beverages. The seats are also arranged around tables like a restaurant and after you buy your ticket and sit down, you can order drinks and a meal-- real food, not just popcorn and candy-- and have it served throughout the presentation.

    At first I thought having the waitstaff walking in and out, serving food and drinks during the movie, would be a massive distraction but it's actually less annoying than the typical flock of people constantly going to the bathroom during a regular movie and at the Alamo, they're at least not crawling all over you to get out into the aisle.

    The sound is great, the picture is clear and the food is decent. Makes for a fun evening and it gives me something for my money that I can't get by staying at home and watching a DVD.

     

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  29.  
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    SailorRipley, Apr 26th, 2007 @ 1:01pm

    Re: by Alan Smithee

    I guess most people don't get your name, I do though :-)

    I agree with the majority opinion, I would love to go often to movie theaters, provided it would be a good experience. IF the experience is good, I don't mind being ripped off for snacks. (although the theater/restaurant concept sounds interesting too).

    But I have to admit, I almost never go to movies anymore, because of all non-movie related crap...

    I admit, part of it is the "youth" with their cellphones, lasers, etc...but I get just as annoyed from an adult loudly consuming his/her snacks, or one person having to explain part of the movie to someone else (for what ever reason, stupidity, bathroom break) don't get me wrong, I have done this too, however, when I do it, the only person affected by it is possibly the person sitting right next to me, and he would only have heared an un-intrusive murmur, vs. a whole segment of seats getting an unwanted recap of analysis

     

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  30.  
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    kweeket, Apr 26th, 2007 @ 4:43pm

    Re:

    I think the best way to save the theater business is best demonstrated in Portland, where the movie theaters (for example the ones owned by McMenamins) serve food and beer, seat you in comfortable couches, and still only charge about $10 a ticket.

     

    reply to this | link to this | view in thread ]


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