Arthouse chains making inroads

NEW YORK — When the major theatrical circuits began opening megaplexes in the early 1990s, several promised to dedicate at least one screen exclusively to specialized film. In case anyone missed the point, one chain even set aside two auditoriums in a 24-screen multiplex for what it called “gourmet” product.

However, these good intentions quickly disappear when a niche pix fails to draw crowds its first weekend or when a studio film promises greater returns. “For all the commercial circuits, the studios are their primary suppliers. They will abandon specialized screens for wide releases when they have to,” says Stephen A. Gilula, president and CEO of Landmark Theaters, which operates 139 arthouse screens nationwide.

Whether they be independently owned venues such as The Little Theater in Rochester, N.Y. or part of chain such as The Landmark Embarcadero in San Francisco, arthouses have traditionally given specialized product time to find its audience. These theaters play a crucial role in the platform release strategies used by Miramax, Sony Pictures Classics and other distributors of niche pix.

Last year, October Films was forced to scramble when “Breaking the Waves” was pulled after one week at the Sony Lincoln Square, the multiplex it had chosen to open the film over Lincoln Plaza, the premier arthouse on Manhattan’s Upper West Side. October spent weeks trying to find another screen in the neighborhood for the Lars von Trier film, which went on to capture several Oscar nominations.

While it’s easy to point the finger at corporately-owned exhibitors, many cineastes would rather see a film like “Breaking the Waves” at a multiscreen arthouse such as the Angelika Film Center in downtown Manhattan than at a mainstream multiplex. If they get shut out of their first choice, they have other arthouse films from which to choose. There’s also the snob effect. “The art clientele doesn’t want to stand in line with the same people that want to see ‘Speed II’,” said one exhib who asked to remain unidentified. “They want to hang out with other art dweebs.”

Aging palaces

In exchange for this privilege, the arthouse patron often misses out on the opportunity to see a film in a theater with state-of-the-art technology, including. By and large, the theaters dedicated to niche pix are aging movie palaces that have not been well maintained or no-frills venues built with modest budgets. Despite the hip downtown image of The Angelika, distributors complain about its “bowling-alley”-style auditoriums and small screens.

But specialized film lovers will no longer have to settle for second best. The biz is attracting a new breed of investors, who believe there is money to be made by cross-pollinating the arthouse with the multiplex. Following the Angelika’s 1996 sale to Reading Entertainment and City Cinemas by the Saleh family, the Angelika concept will be refined and transplanted to several major U.S. cities. The Sundance Group, the commercial spinoff of the nonprofit Sundance Institute, is expected to enter the exhibition business by partnering with a circuit such as General Cinema Corp.

Sundance, which also operates a cable channel in partnership with Viacom and PolyGram, wants to leverage the brand awareness that has been created by the Sundance Film Festival by creating what some are calling the “Starbucks” of indie film exhibition. The Sundance Group declined to be interviewed for this article.

Reading Entertainment and City Cinemas plan to open the first Angelika outside of New York in Houston at Christmas, said City Cinemas executive vice president of marketing Jack Foley. The eight-screen multiplex will be located in the former Houston convention center, which is being developed by the Baltimore-based Cordish Company. The Angelika is expected to attract patrons from Houston’s nearby opera and symphony as well as road shows from Pace Theatrical Group Inc., which is also leasing space from Cordish.

Foley said that Atlanta and Baltimore are other cities that Reading is eyeing for Angelika outlets. “The vision is to establish the Angelika in the top markets it’s demographically appropriate,” he said. “We’re looking at the top 20 to 30 markets.”

Landmark multi

The newcomers to arthouse exhibition have been inspired to a great extent by the overwhelming success of the Kendall Square, a nine-screen multiplex that Landmark opened in Cambridge, Mass. a year and a half ago. The theater marks the first East Coast outlet for the operator of such successful arthouses as the Samuel Goldwyn Pavilion and the Nuart in Los Angeles, the Embarcadero in San Francisco and the Inwood in Dallas.

The Landmark is not officially up for sale, but sources close to the company say its corporate parent, John Kluge’s Metromedia International Group, received several inquiries about the arthouse chain. Earlier this month, Metromedia sold off the assets of the Samuel Goldwyn Co. — Landmark’s former owner — and Orion to MGM. While Samuel Goldwyn’s ailing fortunes hindered Landmark’s expansion before Goldwyn’s acquisition by Metromedia just two years ago, Gilula said that “capital is not a limiting factor” for the chain that was founded 23 years ago.

While no one doubts the arthouse patron will welcome the introduction of amenities such as digital sound, stadium seating and rocking chair seats, newcomers to specialized film exhibition face several risks, including overbuilding. “There is a potential for the market to become overbuilt,” said Mitch Goldman, the head of distribution and marketing for New Line Cinema. “Only a limited number of people are interested in specialized product.”

Earning respect

“Clearly, there is room for art multiplexing on a national scale by different corporate entities, but they are doomed to failure if they do not come from a genuine point of view about film that will be respected by demanding arthouse audiences,” said Jeffrey Jacobs, who programs the landmark Paris Theater in New York and 30 specialized screens nationwide.

Jacobs and others believe that one reason why the large circuits have failed in their attempts to create arthouse screens within megaplexes is they don’t spend enough time marketing niche pix. “Circuits traditionally do not spend sufficient time marketing specialized product to their audiences because they have come to rely on Hollywood to do their marketing for them,” said Jacobs. Arthouses develop their audiences by building mailing lists, publishing newsletters, magazines and calendars for their patrons and hosting lecture tours and other events that create excitement for their product.

Even exhibitors with modest facilities have succeeded in creating arthouse multiplexes by hiring a marketing exec with experience in this area. Among them is Act III, which has converted some of its older theaters to arthouses after opening new multiplexes with stadium seating in the same markets. Act III has used this strategy successfully in San Antonio and Austin, Tex.; Bend and Corvallis, Oregon; and Bellingham and Spokane, Washington. The 700-screen exhib uses an independent contractor to book its specialized screens.

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