Movie theatre attendance have hit record lows. In 2014, the cinema industry sold 1.26 billion tickets, the lowest number since 1995 and a far cry from the all-time high of 1.57 billion in 2002. Ticket prices can be raised to compensate for loss revenue, but there are inherent limits to how effective this strategy can be. Theater chains, like AMC, have instead successfully turned to the concession stand in search of profits. In spite of a 4.5% decrease in ticket revenues, AMC beat Wall Street expectations by recording an 8.8% increase in concession sales. The overall industry, however, will need to evolve as consumers increasingly have more convenient options to view movies at home, such as through Netflix or mobile apps. As such, theatres will need to continue finding new ways to entice getting people to the theatre.
A successful example of how theatres can draw moviegoers to the theatre is Cinepolis Luxury Cinemas. Research has shown that 78% of people eat before or after going to the movies. Movie theatres have latched on to this fact and have envisioned bringing the home experience to the theatre. By providing better quality food and service, customers are not only able to have a more efficient and enjoyable experience, but theatres can further profit by keeping customers in the theatre consuming higher margin products.
Cinepolis seeks to provide an upscale movie going experience by providing comfortable seating, fine dining options and lounge areas for customers to interact. For roughly $20 a ticket ($8-10 more than a typical theatre), customers can have a convenient and time-saving night out by combining the restaurant and theatre experiences. Currently there are 5 Cinepolis Luxury Cinemas in the U.S., all located within upper class neighborhoods in Southern California (e.g. Westlake Village, Del Mar Heights, etc).
Entering the lobby, a customer may opt to enjoy cocktails and drinks at a swanky full bar or eat dinner in the dining area. The dining area offers a high-quality and high-priced menu that consists of food items that range from quinoa salads to truffle flatbread pizzas. Unlike a typical theatre, Cinepolis has a staffed kitchen food and beverage team to help prepare food orders. Inside the theatre, customers will find enlarged recline leather chairs with mini dining tables. Theatres only seat around 60 people as rows and aisles are spaced widely apart. This space allows chairs to fully recline and also provides room for wait staff to maneuver around with minimal disturbance to the customer. Theatres will have a touch-pad at the seat that allow customers to summon wait staff, to order and pay for food and beverages. Wait staff will stealthily bring your order before or any time during the movie. They are even taught to kneel when providing service in order to not block the screen.
All these services and amenities have been very effective in keeping the consumer inside the theatre, consistently generating revenue. Recent reports show that average visit durations are about 4.5 hours per customer. Due to the success of this operating and business model, its no wonder that several competitors are popping up across the country.