If started and managed well the movie theatre business can be a lucrative one. Like any other entrepreneurial establishment it takes funds, time and dedication to get it up and running. Good marketing skills, and relevant research are also invaluable to the start up of the movie theatre business.
Types of Movie Theatres
- First Run theatres run mainstream films from major film companies and distributors, coinciding with their release date. A first run theatre can only be opened by obtaining an expensive franchise and licence from major movie theatre companies that are already established. You must abide by the rules of the original theatre company in running your own franchise.
- Second Run theatres feature movies that have already been shown in first run theatres. Ticket prices for these theatres are much cheaper than those of first run theatres.
- Art House theatres or Repertory theatres typically feature alternative art films, independent films or second run classics.
Independent versus Franchise
- Independent theatres run speciality films and so have an edge over franchise theatres. An independent theatre provides a refreshing alternative to mainstream movies, and so is not in direct competition with franchise owned movie theatres.
- Franchise theatre owners have to abide by set rules and regulations in running their movie theatre. Independent movie theatre owners have the flexibility to create a unique atmosphere and cater to a smaller, specialised niche market.
- Franchise owners do not have to put as much effort and capital into advertising. Independent theatre owners have to invest heavily in advertising their films to create awareness and gain ticket sales.
Writing a business plan
- Decide what type of theatre you want to open and do relevant research.
- Establish how much capital you will need to start your business.
- How you plan to run your business should be established.
- Make a projection of the probable profit you’ll be able to turn with your theatre in increments of 6 months, 1 year, 2 years and beyond.
Setting up a bank account
- Set up a business account at a major banking facility.
- Inquire about loans for business and construction if the project will be self financed.
- Pitch your business plan to potential investors to secure funding.
- Put all your capital into your business account so tracking your account can be done with ease.
Building the structure
- Acquire a plot of land. Movie theatres are typically built from the ground up to accommodate their technical and spacial requirements.
- Hire an architect to draw project designs. Decide on the number of individual theatres, bathrooms and where concessions stands will be placed.
- Obtain permits and design approval.
- Hire construction crews to get the building underway.
- Decide how your films will be projected, whether by standard film reels or digitally.
- Decide how your films will be heard, whether by surround sound, Dolby digital or another option.
- Buy audio visual equipment from wholesale manufacturers and have them installed to the correct specifications.
- Create a unique atmosphere for your theatre so your establishment will stand out.
- Contact studios and speak with the manager of distribution.
- Explain your position as a new vendor and express your desire to buy a distribution license to exhibit their films. The manager will walk you through the process and the film prints will be shipped to your location a few days before the film’s scheduled premier.
Getting ticket sales
- Market your new theatre by providing discounts and specials.
- Invest money and time into relevant advertising.
- Initially, host free movie nights. This will bring people to your theatre and give your establishment the advantage of free word of mouth advertisement.