Inside Indie Movie Theaters’ Battle to Survive

Small Theaters Struggle to Survive in
Pamela Littky for Variety

Nestled at the foot of a large hill on the edge of downtown Providence, R.I., Cable Car Cinema was known to local moviegoers as ”the one with the couches.” That was a charitable description. They were love seats, really — perfect if you were with a date but awkward if you went to see a movie with a friend or found yourself seated next to a stranger.

Despite, or perhaps because of, its idiosyncratic seating, Cable Car inspired fierce devotion among its regulars, a collection of Brown and Rhode Island School of Design students, professors, artists and cinephiles.

“It was a place you went to commune with fellow movie lovers,” says Mike Ritz, a longtime patron. “You didn’t go there to see ‘Spider-Man.’ They played art films that challenged you, that provoked emotion, that made you think.”

Last May, after 42 years of screening everything from “Pulp Fiction” to “RBG,” the Cable Car ran its projector for a final time and closed its doors forever. The business was profitable, but owners Daniel Kamil and Emily Steffian could not come to an agreement with RISD, the building’s owner, on a deal that would enable them to buy the theater outright. Kamil and Steffian concluded that in order to remain competitive they needed to expand beyond their tiny single-screen space.

“We were looking at a future where it was going to be harder and harder to just break even,” Kamil told Variety. “We bought the theater because we loved movies and we wanted to preserve a local icon, but we couldn’t make it work.”

The closure left a void in the tight-knit community of indie film fans, one that has yet to be filled. ”I kept having this really unhealthy fantasy that some miracle would happen and someone would swoop in and save it at the last minute,” says Cable Car regular Anna Macgregor Robin. “You know, like in the movies.”

But no white knights came to the rescue, and the theater has become a prime example of the challenges facing independently owned movie houses. Confronted with aging audiences, competition from streaming services and theater chains boasting recliner seats and other amenities, many of these exhibitors balance precariously on a knife edge between popping more popcorn and being forced to turn off the marquee lights.

“It’s a tough business,” says Eric Handler, an exhibition industry analyst at MKM Partners. “Your revenues are inconsistent. Your rent keeps going up. Unless you have some deep-pocketed investor, you don’t have the capital to do what they’re doing in theater chains by investing in high-end food items and fancier seating.”

Independent theater owners have been forced to come up with creative ways to stay solvent.

Some have transitioned into nonprofits; others have embarked on GoFundMe campaigns to finance renovations. Newt Wallen, head of operations at the Anthony Wayne Theater, a movie palace in Wayne, Pa., that’s grown ragged around the edges, has been soliciting donations from patrons who live in the cinema’s Main Line neighborhood in hopes of installing new leather seats and carpeting, painting the lobby and sprucing up the screens. He wants to raise $2 million, but declined to say how close he is to reaching that goal.

“I’m painting, I’m fixing the plumbing, but there’s only so much I can do,” says Wallen. “I’m playing on people’s sympathies and hoping they donate. But sometimes it’s hard. Sometimes I feel like I’m screaming at the sky.”

Despite the challenges, a large number of independently owned cinemas still exist. The exhibition business in the United States is dominated by three major circuits — Regal, AMC and Cinemark — that collectively control 50% of the roughly 41,000 screens in the country. But once you get past these juggernauts there are a number of smaller circuits and mom-and-pop theaters. Of the more than 600 members of the National Assn. of Theatre Owners, the leading exhibition industry trade group, 414 boast fewer than 10 screens and 91 have single-screen venues.

“The challenges and opportunities vary by market,” says Patrick Corcoran, a spokesperson for NATO. “Business tends to be hyperlocal and impacted by what’s happening in their economies.”

That means that ticket sales can be heavily influenced by a factory closing or a new company planting its headquarters down the street, not just what movies are hitting screens.

General manager Victor Martinez is a 31-year veteran of the historic Vista theater in Los Angeles.
Pamela Littky for Variety

The term “independent” is a flexible one. NATO defines it as a theater or theater chain that has 75 screens or less. That encompasses a wide range, from the single-screen Cable Car to the 47-screen, five-location Cinergy, a thriving chain in Texas and Oklahoma. These businesses exhibit all kinds of films. Some play obscure foreign language movies; others showcase the latest superhero adventure. Regardless of their size or what movies they’re presenting, independent theaters have no choice but to out-hustle the bigger circuits if they want to survive. Take Vintage Cinemas, a three-theater chain in Southern California. Company head Lance Alspaugh thinks it’s the personal touch that makes the difference.

“Those [corporate chains], they’re cookie-cutter,” says Alspaugh. “They are boxes with giant seats.”

In contrast, Alspaugh and his staff know their customers by name. They also respect the privacy of the celebrities who frequent the Vintage’s two locations in L.A.’s Los Feliz neighborhood (the Los Feliz Theatre and the Vista), a group of A-listers that includes Angelina Jolie, Katy Perry and Quentin Tarantino. In the process, the company has fostered a vibrant sense of community. These aren’t just locations to go see the latest movies.

“Our place is a special place,” says Alspaugh. “We’ve had weddings there. We’ve had funerals there.”

The Vista attracts a smattering of locals representing multiple demographics, as well as suburbanites drawn to Los Feliz’s boutiques and Instagram-friendly hipster aesthetic. At a recent showing of “Captain Marvel,” gaggles of teenage girls, Marvel fanboys and couples congregated to cheer on Brie Larson as she battled to save the universe. Perhaps the evening’s most dazzling special effect was the price of admission, which was $9.50 for a Sunday-night showing, half the cost of a ticket a mile down the road at the Arclight Hollywood. While the Vista doesn’t boast the Arclight’s high-end snack selection of caramel corn or wasabi peas, its popcorn and sodas are also lower-priced. But maintaining the theater’s appeal takes time and sweat. Alspaugh, who became Vintage’s CEO in 1999, says he’s always working.

“Things do break,” he says. “A popcorn popper is not heating the way it’s supposed to, or the roof is leaking. Or an emergency exit is needing to be replaced. Anything like that worries me. I’m like a doctor — I’m never off call. I don’t think I’ve ever really been off.”

Alspaugh may spend a lot of time putting out fires, but he’s been lucky in one important respect: He’s had a secret weapon in general manager Victor Martinez, a 31-year veteran of the Vista, Vintage’s most popular theater. Martinez has become a local legend for making frequent appearances in costume as characters from the newest releases. It’s a tradition he started in 2004 when he donned a Venetian masquerade mask and cloak as a tribute to the monstrous central character in “The Phantom of the Opera.” Since then, he’s worn everything from Wolverine’s adamantium claws to promote “Logan” to Capt. Jack Sparrow’s mound of dreadlocks and mascara for each new “Pirates of the Caribbean” film.

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“I created a monster,” says Martinez. “In the beginning I said, ‘Wouldn’t it be so cool if someone was dressed as the character at the door, cutting tickets?’ The reaction was so amazing, Lance got a ton of emails. Now they want me to dress up for everything. For ‘Godzilla,’ ‘The Nun,’ ‘Dumbo.’ I only do it when it’s appropriate and I know it’s going to be great. I don’t want it to become tired.”

Costumed ticket takers isn’t enough for every theater. Some, such as Cinergy, have found ways to diversify their revenue. The chain doesn’t just screen movies. Its locations also offer bowling alleys, escape rooms and virtual-reality games. And it’s working. While some theaters struggle to stay in business, Cinergy is in expansion mode. It plans to open two more locations by 2020.

“I spend a lot of time trying to understand demographics of locations, both ours and potential sites,” says Jeff Benson, CEO of Cinergy. “I spend a lot of time courting banks, talking to different lenders, making sure we’ve got capital lined up for whatever it is we need. We’ve refinanced several loans lately. We’ve put recliner seats in all of our locations. We’re putting four additional screens in our Odessa, Texas, location.”

This isn’t Benson’s first rodeo. In 2001, he founded Movie Tavern, one of the earliest cinemas to embrace the idea of offering dine-in service while a movie played, and grew the company to 14 complexes in five states before selling his stake to Cinemark in 2008. At the time, the idea of serving dinner at a cinema was novel. However, Benson recognized that something needed to change — studios were demanding a greater share of ticket sales, and attendance was flatlining.

He had to grow his revenue or face a future of ever-tightening margins. With this in mind, he set out to make Cinergy an entertainment destination that wasn’t a slave to showtimes. “I think our days are numbered as an industry if we don’t evolve,” says Benson. Because Cinergy doesn’t just show movies, it has been able to weather the recent box office slump — ticket sales this year are down approximately 20%.

“With all the games and bowling and family entertainment components — escape rooms, rope courses — typically that sort of stuff does really, really well when it’s cold outside,” he says. “Even though the movies have been lackluster at best, we’ve set records in the game rooms each of the last three weekends in a row.”

Vintage Cinemas CEO Lance Alspaugh says, “I’m like a doctor — I’m never off call.”
Pamela Littky for Variety

Cinergy may be adding locations, but other theaters face a more perilous future. One avenue that some have taken to stay afloat is to become a nonprofit. That strategy has enabled The Brattle, a Cambridge, Mass.-based theater that plays a mixture of classic films, independent features and foreign language fare. Situated in the middle of the Harvard University campus, the intimate venue is something of a curiosity, with its Valentine’s Day showings of “Casablanca” and its rear projection system. In 2001, Ned Hinkle and Ivy Moylan, two Brattle employees, took over the lease and created a foundation to run the theater. After looking at the books, they realized they couldn’t keep showing art-house movies unless they could pursue alternative forms of funding, such as grants and charitable contributions.

“We would not have lasted the last 20 years if we were not a nonprofit,” says Hinkle. “We would have had to change our programming model, and we didn’t want to do that.” With so many charitable causes asking for money, Hinkle acknowledges it can be tough to find people willing to write checks.

“We’ve had our ups and downs,” he says. “It’s been hard at times to get the community to see us as an arts institution. People wonder why we’re a nonprofit if we’re selling tickets. There’s a dividing line in many people’s minds between popular art like movies and art art like ballet.”

Even movie theaters that make money serve a social good, exhibitors claim. Generations of young people have had their first professional experience working in the box office or at the concession stand. Moreover, the theaters themselves can become de facto community centers. At a time when viewers devote more attention to their smartphones or tablets or at home bingeing Netflix shows or searching the internet, movie theaters present a rare venue for people to gather and have a shared experience. The movies they see on the big screen have their own value, taking audiences to new worlds, introducing them to characters and experiences that are very different from their own.

“I’ve seen films that have changed the trajectory of my life,” says Ritz, the Cable Car patron. ”They’ve changed how I behaved or saw others. They’ve opened my eyes to new possibilities.” Denise Mahon got a similar message from customers when she decided to close Varsity Theatre, a single-screen cinema in Des Moines, Iowa, last December. The theater was purchased by her father, B.C. Mahon, in 1954, and Mahon took it over in 2009 following his death. It still attracted customers, but Mahon got worn down from the pressures of working 365 days a year. She needed to have knee surgery that would take her out of commission for months, and she entertained fantasies about traveling.

“It was a wrenching decision,” recalls Mahon. “I felt like I was letting people down, and I felt like I was letting my dad down on some level.”

Cinergy theaters feature entertainment options like bowling alleys in an effort to grow revenue.
Wade Griffith

Closing the Varsity was poignant in other personal respects. Mahon’s birth announcement was made on a frame of film and projected on-screen. Growing up she had birthday parties at the theater, and in high school she worked the cash register, which taught her how to make change. What surprised her, though, was how much the decision affected her customers.

“I got stacks of cards where people just poured out their hearts,” says Mahon. “People would say what a vibrant part of the community this had been, or they’d talk about seeing a movie here and how much it had meant to them. Dad prided himself on showing movies that made you think, and people appreciated that.”

On a snowy night right before New Year’s Eve, it fell to Mahon to show one last movie. The place was packed with well-wishers and media. Mahon hired a choir to sing show tunes and “Auld Lang Syne.” And she picked a very special feature to help roll the credits on the Varsity, “Cinema Paradiso.” The 1988 Italian film centers on the bond that forms between a kindly movie house owner and a boy who grows up to become a famous director. It is, in every respect, a love letter to the power of cinema.

“All I have to do is hear that theme song, and the tears start streaming down my face,” says Mahon. “That story is my dad’s story. He just loved entertaining.”