Berkeley’s last independent cinema on why ads matter

January 4, 2011 1:06 pm by Tracey Taylor

Elmwood Rialto Cinemas: the last remaining independent movie theater in Berkeley. Photo: Keoki Seu.

Yesterday we ran a story about the closure of Oaks Theater on Solano Avenue. The cinema’s failure to thrive prompted an interesting discussion among our readers on the difficulties of running a successful independent movie theater.

Among the subjects under consideration was the need for advertising. Reader Larry said he was a fan of local theaters, but that he felt “thwarted” having to watch ads before the screening of films. “This is insulting, taking advantage of my being a captive in my seat at that point to make a few cents more selling my eyeballs to Louis Vuitton and the like. Between a chain that treats me with respect (as a paying customer there strictly to see movies), or an independent who sells me out as a target for advertising, I choose the chain,” he wrote.

Ky Boyd, the proprietor of Rialto Cinemas Elmwood and Rialto Cinemas Cerrito, the first of which is Berkeley’s only remaining independent cinema, responded. We felt it was worth hoisting his words from the comments as they explain the position our rapidly disappearing, locally operated cinemas are in. Here’s what Ky had to say:

Larry – we’d love to not have to show advertising, but the reality of the movie business today is high film cost, high labor cost, rent, insurance, etc., etc., etc. Without the ads the Elmwood wouldn’t be in business. It is interesting you mention the Louis Vuitton spot. That was made specifically for theaters and designed to look like a movie trailer. I think it annoys you because you were drawn into it expecting it to be a preview and then it turned out to be an ad. Like all good advertising it served its purpose. It got your attention and you remembered it, albeit not positively. And by the way, did you notice the ads here in Berkeleyside? We don’t run a 20 minute ad & promo package like AMC, Regal and Cinemark/Century do and we run less advertising than Landmark. If we did not run the ads, tickets would not be a few cents more as you imply, they would be dollars more. It is also worth pointing out that we don’t charge $7.00+ for a large popcorn, which is what most of our competitors are getting. Hope this bit of explanation helps you understand a bit more about the exhibition business. See you at the movies.

Interested in issues surrounding running a business in Berkeley? Be sure to attend Berkeleyside’s first Local Business Forum on Monday January 24, 7-9pm at the Freight & Salvage. Doors open at 6.30 and it’s free.

11 Comments

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  • G

    Thank you Larry.

    I marvel at how people don’t understand that “free” is NOT free. “Free” content is always subsidized in some other way, mostly ads. It’s not a small subsidy either. If you take away ads, expect to pay cable prices for all content. Movies will cost 25-40 dollars, depending on how successful a theater is. That will just cover costs too.

    Honestly, the real competition for movie theaters is not the big movie theaters. It’s your home TV. Your home TV has gotten so good over the last decade that it can now bring a movie experience in the comfort of your house. So far, theater owners have been able to promote 3D, sound technology to convince you to come out. In Japan, they have SCENT technology (you can smell pinewood when actors are in a forest. Weirded out? Don’t be. It’s all to make sure the seats are occupied.)

    Don’t complain about movie theaters wasting your precious time. If you want to make sure ads disappear, then volunteer paying a higher price. Otherwise, your beloved theater will shutter.

  • John Seal

    At least the Grand Lake remains ad-free. Thank you, Allen Michaan…

    Though I’m not an expert on the movie business, I suspect the driving force behind pre-screening ads (which were, curiously, ubiquitous in the UK and Europe long before they became so in the US) is the percentage of gross claimed by distributors during the first few weeks of a film’s run and, conversely, the shortened booking periods for those films. The days when a theatre could book, for example, Star Wars and play it almost rental-free for two or three years are long, long gone. Films playing for a month or more at the same cinema are extremely rare these days.

    I’d love to hear more from theatre folk about this part of the financial equation.

  • Larry

    @G: I do hereby volunteer to pay more to attend movies that don’t have ads.

    I’d love to see an honest accounting to back this your claim that the movie really costs $25-40. How much revenue really comes from the ads, per viewer? Does showing me two ads lower the ticket price by $2? Then I’d rather pay the extra $2 and skip the ads. Do the two ads lower the ticket price by $30, as G claims? Then show a third ad and let me in for free, we’ll both come out ahead!

  • john holland

    “Between a chain that treats me with respect (as a paying customer there strictly to see movies), or an independent who sells me out as a target for advertising, I choose the chain,” [larry] wrote.

    at the risk of being accused of argumentum ad hominem, larry must be high. what movie theater chain treats you like respect? UA? Regal? AMC? please do tell, i’d love to go there.

    EVERY corporate theater chain bombards you with ads before a movie: soft drinks, cars, etc. then there’s the trailers, the endless trailers.

    i can’t imagine how anyone who actually goes to movies could make such an absurd assertion.

    no commercials and respect from the chains? c’mon, stop pulling my leg.

  • Larry

    John, I wasn’t really saying that the chains are better and did not mean to imply that they had no ads. I expect the chains to treat me poorly, which is why I prefer the independents, from whom I hope for more humane treatment. So when they act just like a chain, it nullifies my preference. Does that clarify? I was responding to a previous story that lamented that there was only one independent left in Berkeley, and my point was that although I prefer the small independents in theory, it goes out the window in practice if they treat me as badly as the chains.

  • john holland

    @larry: you spoke of a “chain that treats me with respect.”

    which chain is that? i’m dying to know.

  • Rialto Cinemas Elmwood, Ky Boyd, Proprietor

    John S – yes the Grand Lake does not show ads, but it also has many, many, many more seats to be able to sell than the Elmwood, which seats 276 people at capacity. The Grand Lake is also in a much different booking situation than the Elmwood is where we compete for films with 20 screens downtown, plus four more on Solano Avenue. And yes, movies do cost exhibitors more these days than they used to. But they also cost the studios more to market and more to make. Even independent filmmakers face greater costs getting their films into theatres. All of this results in increased film cost for exhibitors. The bottom line is that if you enjoy the immersive experience of seeing films in movie theatres than please come to the movies. Support your local movie theatres be they independents or others. Berkeley’s theatres took a huge hit when the AMC at Bay Street Emeryville opened up shop. We are committed to keeping both Rialto Cinemas Elmwood and Rialto Cinemas Cerrito vital moviegoing destinations. As I said in my original post, we look forward to seeing you at the movies! Ky Boyd, Proprietor – Rialto Cinemas Elmwood and Rialto Cinemas Cerrito

  • Larry

    @John Holland: Sorry if I was sloppy in my language. I’ll rephrase without any confusing talk of respect: If the independent can’t treat me better than the chain, I have no reason to prefer them. It’s a huge shame, too, because the local independent has within their grasp an inherently superior experience than can be provided by a remotely managed mass-market chain. But they can blow it by emulating the most annoying practices of the chains.

    The Rialto theaters (Elmwood and Cerrito) are among my favorites, along with the Grand Lake, Shattuck, and Parkway (when it existed, sigh). I want them to be successful, and I want to want to go more often. I don’t know if the latest batch of ads are more than they used to have, or longer, or just more tasteless, but I’ve been to both the Elmwood and Cerrito within the last week (yeah, I like movies) and both times found it crossed a threshold and truly detracted from the moviegoing experience in a way that I didn’t used to feel going to those theaters.

  • G

    I wouldn’t be surprised if Grand Lake and Rialto don’t make it in 10 years. I would LOVE to see them succeed, but the future looks dark for movie owners. First, the VOD threat. Studios are threatening to release movies ON YOUR INTERNET only 30 afters release at the movies. If this model works, I have no doubt that window will disappear. Second, local movie owners just can’t handle the real estate and payroll expense. Want to hire an unemployed person today? Sure. Pay their medicare, payroll, workers comp taxes, please. Also, get liability insurance for the theater please. California has made business difficult slowly and steadily. Lastly, it’s not a thriving business if people go only out of some charitable emotion. No one makes money that way.

    Larry, those ads pay tens of thousands of dollars to a cinema over the year. Without that, your ticket will at least double. If someone is paying tens of thousands, it’s the equivalent of entire audiences. Some theaters can keep their popcorn and drink price low by letting in even more ads.

    Everyone knows the AMC killed Jack London, Grand Lake, Berkeley’s Elmwood, Shattuck United Artist, Emeryville United Artist, Albany’s Cinema. That’s ONE megaplex.

  • Larry

    G, I hear you, but I’m still having trouble with the math.

    The Elmwood has 12 showings a week according to their web site. If only 20 people are in the audience on average (that seems low for a stated capacity of 276 seats, but what do I know), that’s about 12,000 tickets a year. If ad revenue is truly “tens of thousands per year” that’s perhaps $2-4 per ticket, depending on how far off my guestimates are. Not nearly a doubling of the ticket price, and a far cry from earlier claims of $15 or more.

    I’d love to hear the real numbers from a theater owner. How much revenue comes from the ads, how many tickets do you sell a year. Divide. If it’s less than a few dollars, I stand by my claim that I’d rather pay a bit more and have a better experience. If it’s a LOT of dollars, then why not show just one or two more ads and fully subsidize the ticket (the TV business model)? Think of the publicity (not to mention butts in the seats and mouths at the concession stand) if you were the “movies are free” theater!

  • Nexus

    Jesus, what a lot of whining. Just go to the movies 15 minutes after the start time and you’ll be fine. I’d love the world to revolve around me, too, but figured out that it didn’t…when I was three.