Television was going to end the movies. Everyone in the 1950s knew that. Didn’t quite turn out that way – as this weekend’s $45 million opening of “Star Wars: The Last Jedi” demonstrates – but the advent of new forms of entertainment did get movie theater operators thinking about ways to compete for audience share, a trend that has ramped up to new heights 60 years later.

IMAX. 3-D. Variable ticket pricing. Loyalty clubs. Bars and restaurants. Recliner seats. Reserved seating. To the casual observer, it might look as though exhibitors are throwing everything against the wall to pull people away from weekend Netflix binges or other, smaller screens.

Theater owners, however, insist that a constant stream of incentives and marketing strategies is normal for a business that must keep evolving. And that holds true for large chains, such as Knoxville-based Regal and AMC, or an independent operator like Nashville’s Belcourt Theatre.

Renovations, upgrades and enhancements are part of the business model now, exhibitors say, because the public demands a more immersive entertainment experience – and is willing to pay for it.

“About a decade ago, AMC was looking at the movie industries and seeing how it could reinvent itself,” says Ryan Noonan, the company’s public relations director. “We started making some changes, and I don’t think anyone realized that it would change the landscape as much as it has.”

He points to the chain’s MacGuffins Bar and Lounge, a full-service bar placed in theaters so moviegoers can purchase their tipple of choice before heading into their screening. AMC also bumped up its food offerings, which now include dine-in service in some locations, including at Franklin’s AMC Thoroughbred 20, and began to install recliner seats in some locations beginning in 2010.

Customers can still purchase a ticket for a regular seat in the $13 range and skip the add-on’s, but others are more than happy to do so, even if it means their ticket prices could soar north of $20 each in the case of an IMAX 3-D presentation.

“When we rolled out the recliners, the response was phenomenal,” Noonan adds. “Moviegoing skyrocketed. So, we tried it in another location, and got the same result.

In a city dominated by chain theaters, Nashville’s Belcourt Theatre is thriving as a nonprofit dedicated to independent, documentary and classic films. It underwent a massive interior and exterior renovation in 2016.

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“We have been taking older assets, theaters that have been around for 15, 20, even 30 years and adding in recliners and other features as part of needed upgrades. New screens, new sound systems, alongside new carpet and paint, the stuff you don’t really brag about but that does make a difference.”

The company reported almost double the visits in some of those locations. The chase was on.

Knoxville-based Regal Entertainment Group also has been experimenting with seating, food and other enhanced options, but what’s next for the chain is somewhat uncertain since it was acquired by European chain Cineworld Group on Dec. 4 for $5.9 billion, including assumption of Regal’s debt.

Regal CEO Amy Miles issued a statement, that promoted, in part, “Cineworld’s commitment to maintain a strong presence in the U.S. and Knoxville, provide a global platform positioned for continued growth and innovation.’’

Other Knoxville officials, including deputy mayor Bill Lyons, add the buyout shouldn’t affect the Knoxville-based theater operator’s local presence or its plans to move into a riverfront office tower.

Both AMC and Regal have found success, and both also continue to see the ups and downs of the movie business.

Big investments, big dollars

The movie-exhibition industry is a multimillion-dollar enterprise, even in off times. Its latest competition comes from online streaming services, which have put a dent in profits.

Regal has 7,315 screens in 561 theaters in 43 states, as well as in Guam, Saipan, American Samoa and the District of Columbia, company records show. It announced revenues of $716 million for the third quarter ending Sept. 30. 2017, down from $811.5 for the same period in 2016.

AMC has 1,006 theaters and 11,046 screens in the United States and overseas markets, including 14 European countries through its Odeon subsidiary.

It announced total third-quarter revenues of $1.178 billion, up from $779.8 million for the same period in 2016. Of that, admissions revenues were up 51.7 percent, and food and beverage were up 45.2 percent.

Still, AMC shares took a tumble when it reported a net loss of between $174 and $178 million between April and June, compared to a $24 million profit during the same period a year ago.

Regal and IMAX also saw dips as industry watchers voiced their ongoing concerns about attrition due to poor performance by some releases and lighter attendance.

Belcourt's Manzler/Webb Screening Room

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At the same time, consumers are spending an estimated $11.9 billion on subscription streaming series such as Netflix, and on-demand series such as Apple iTunes and Google Play.

Further muddying the waters, innovations such as MoviePass, a subscription ticket reselling start-up that began in 2011, is now offering virtually unlimited movies for less than $10 a month (subscribers can see one movie per day by using the app), down from its $50 a month plan at launch.

AMC, in a news release last summer, referred to MoviePass as a “small fringe player,” adding it would try to block the service from its theaters.

Most recently, Regal has announced a test run at variable ticket pricing to begin in early 2018. Partnering with mobile app Atom Tickets, the pricing system will be similar to what’s offered online for hotels, airlines and live entertainment, with higher prices for peak opportunities and lower for films that might not be doing as well. The company has declined to name specifics about markets or time frames.

Bottom line? In the movie-exhibition biz, it’s about staying current or, better yet, staying ahead.

In the 1950s, exhibitors responded to TV with 3-D, CinemaScope even VistaVision. Will recliners and visual/sound surround do the trick for this generation?

The moving target, it would seem, is to find the spot between just how much a customer will pay for a movie with all the bells and whistles.

There’s also the increased importance of keeping those seats full since many of these renovations greatly reduced seating capacity.

“If you can figure out what the guest wants, what gets moviegoers excited about being in the theater, you can build traffic,” Noonan explains.

“For the longest time, it was about building the biggest auditorium, with the most seats, as you could. That worked. But as more entertainment options became available, and as people got more discerning, something needed to change.

“The movie theater industry evolved into a focus on creating a great experience, which is where we are now.

“Reserved seating, recliner seating, mobile ticketing, enhanced food and beverage … 20 years ago these were unheard-of options, but now if you don’t have them, you’re going to lose market share.”

Independent operators

Mainstream operators like AMC have issues of size and scale (not to mention shareholders) to contend with, but that’s not to say independent theaters don’t have their fair share of headaches.

A new bar is one of several upgrades at the Regal Green Hills Stadium 16 theater at the Mall at Green Hills. The theater now has all reserved, recliner seating and expanded concession choices.

-- Lyle Graves | The Ledger

Many of them are membership-based, which means they have boards and other stakeholders to answer to, as well as a very vocal audience of people who love independent cinema.

It’s all worked out fine for the Belcourt Theatre, which reopened in July 2016 after a massive renovation. Time was, the campaign was to save the building, not fix it up, which shows that it has been able to keep audiences happy and coming back, says Stephanie Silverman, executive director.

“We’re not really trend-driven in the way we make decisions about programming,” Silverman acknowledges. “And when it comes to the building, our conversation about renovation was as much about stabilizing and restoring the building as it was about enhancements that we could make.”

As far as programming went, the Belcourt staff’s first goal is ensuring that the audience is getting what it wants. That means a comfortable auditorium, certainly, but going in a slightly different direction than recliners. At the Belcourt, the renovation included adding a classroom so that discussions could be held after documentary screenings, for example.

“For us it as about creating lively and wonderful ways for people to connect,” Silverman adds. “We also added a small screening room just so we could get more films throughout the building, and keep those that may have a smaller audience or just need one or two screenings a day.

“From a programming point of view, we were looking to expand capacity and experience in more and different ways than the just physical.”

The Belcourt already offered a full bar, so the biggest change around food and beverage was to add more local vendors to the concessions area. That includes a partnership with the commercial kitchen program of Conexion Americas, which allows the theater to support that agency and others.

Business has been brisk since the grand reopening, and Silverman says that like her big-box counterparts, the idea now is to keep tinkering with the formula to see what combinations can keep momentum going.

“The market will always find its balance,” she predicts. “People are testing a lot of things now. The chains have some very big real estate bills to pay every month, which is the beauty we have here in terms of being a small, boutique site.

View of the bed seats in Hangzhou’s first bedroom cinema in Hangzhou City, east China’s Zhejiang province. The theater offers a total of 13 beds with four rows. One bed is counted as two seats, and they are not sold alone. The price is from 140 to 150 yuan, which translates to $21 to $23.

-- Imaginechina Via Ap Images

“We can spend time and money on marketing and reaching specific audiences, for example, whereas they have to take a more global approach. But wherever you go, pricing is pricing and people are sensitive to it.

“There can be a point where you stop feeling welcoming, and so we work to keep the ticket cost reasonable,’’ she adds.

AMC’s Noonan is optimistic. “We’re selling tickets, and the guest feedback is through the roof at the renovated locations.

“People are willing to pay more for an experience they feel is worth the value. What we’re working to do is make sure that a renovated theater, or dine-in theater, is not significantly more than a traditional theater so that a family who wants to see a movie there isn’t priced out.”

And, he adds, the old standby of value pricing for movies before noon, or other selected times, still exists.

Doing the math

Whatever the price point, the large chains have had to do a fair amount of number crunching to factor in the expenses behind a theater renovation to their bottom line, and then, going forward, how to create revenue from auditoriums that may have fewer seats.

“Something like reserved seating doesn’t really cost us more, and we’ve tried to keep ticket prices down even where we have done significant renovations,” Noonan points out.

“What we have done is build popularity for a location, so even if it loses 50 percent of 60 percent of seating capacity, we’re up in attendance.

“More people are coming, and they are coming more often. Reserved seating has helped with that, because the guest knows that he or she can select the type of seat they want, at the time they want, and it’ll be there waiting. It all ties into convenience, and how the whole package of a movie-theater experience is getting better.”

Scheduling also plays a role, with very popular movies getting lots of times on lots of screens, so customers can choose traditional or recliner seats, 3-D or other options if they are available.

“Star Wars: The Last Jedi,” for example, will likely play almost around the clock. And then, as its attendance drops off, other films will be scheduled in and around it so that as many options as possible are available.

How much is too much?

That kind of flexibility is appealing to consumers, as are the various upgrades and enhancements.

The industry has listened and evolved, and that’s why both Noonan and Silverman say the narrative about theaters struggling is inaccurate, given the ongoing growth in attendance.

“During the recession that began in 2007 and 2008 the Belcourt had very strong years,” Silverman points out. “The movies are still an affordable way to escape or do a deep dive into something, to get out into a community of people and have a shared experience.

“No amount of Amazon or Netflix binging can replace the moviegoing experience, and they’ll never have screens as big as ours.”

The focus remains on the screen as well at AMC, Noonan adds, even with enhancements that could be seen as pulling customers’ attention elsewhere.

“Nobody’s getting up six times to get more drinks,” he says. “The goal is to provide a great moviegoing experience.

“If someone wants a beer, they can do that now. And if they want the IMAX, or the Dolby Cinema, experience, they have options for that.

“We’re not just expanding beyond popcorn and soda, but also into better food, so that if you want to see a movie after work, you’ve got options.”

AMC has renovated more than 150 theaters, and Noonan says that attendance increase between 40 percent and 60 percent in the 12 months following the addition of new seating and other features.

“The focus on the guest experience is paying off for us,” he says. “Dine-in kicked it off for us; we opened the first dine-in location in 2008 and very quickly added more. Now there are about 40 nationwide, some of which came to us when we acquired Carmike.

“They have been the perfect combination of dinner and a movie, all in one place, for consumers and so have worked very well for us.

“That success has led to these other programs, and there will likely be continued changes as well.”