Big-screen bonanza

When Aksarben Cinema opens its 10 screens sometime next month, it will be the fifth new movie theater for Omaha in the past five years.

The metro area is bucking a national trend, increasing its number of movie screens by 17 percent — from 129 to 152 — since 2006. At the same time, the number of screens across the country has risen about 1 percent annually.

Now, some industry watchers say Omaha is nearing screen saturation. We're on the edge of having more movie outlets than the local population can support.

Deciding when and where to build a new mulitplex is complicated, say theater owners and industry experts. Local habits, population density near a new theater, income and age demographics, drive times, nearby retail outlets, amenities in the new theater — many factors play a role in whether moviegoers patronize a multiplex.

But there is a limit, as the U.S. movie industry found out about a decade ago.

Overbuilding in the 1990s, including the first stand-alone megaplexes, caused the number of movie screens in the United States to reach 37,396 in 2000, up 58 percent from 1990. In contrast, ticket sales in that period rose just 20 percent.

Too many screens and not enough moviegoers meant large national theater chains like Loews, Regal and Carmike filed for Chapter 11 bankruptcy. Scores of movie theaters — 2,000 screens nationwide — went out of business. Omaha's Indian Hills Theater was one of those victims in 2001.

At about the same time, Netflix launched its subscription DVD service, home-theater systems and flat-screen televisions became more popular and cable services such as DVR enticed more people to stay home.

Redbox kiosks, now renting DVDs for as little as $1 a night, cut into theater audiences even more.

Movie theater ticket sales peaked in 2002 at 1.58 billion and have trended more down than up since. Last year's total was 1.42 billion. Nationally, the number of movie theaters and screens has been almost flat since 2006, averaging about a 1 percent increase each year.

But Omaha saw the addition of 16 screens at Great Escape in 2006, two screens at Film Streams in 2007, 14 screens at Rave Westroads in 2008, five screens at Marcus Midtown in 2009 and now 10 at Aksarben, near 67th Street and West Center Road. That's 47 new screens.

Omaha lost Q-Cinema 9 in 2008, Cinema Center in 2009 and the Stockyards 8 discount theater earlier this year, subtracting 25 screens.

Jeremy Devine, vice president of marketing for Rave Motion Pictures in Dallas, which owns Rave Westroads, said the numbers in Omaha speak for themselves.

“If you look at the trends, I wish those who came in (to Omaha) after us in 2008 well,” Devine said. “I think it's a valid point to wonder out loud if we're reaching too many screens. It's not a definitive thing, but the math is telling.”

Rave Westroads, he said, made sense because it was located on a busy central corridor, in an established mall with general growth and nearby restaurants, and because Rave felt it had an edge in digital technology that made it unique. Rave remains Omaha's only all-digital theater. The theater has done steady, but not whopping, business, Devine said.

The new Aksarben Cinema will also be all-digital. Bill Barstow, owner of the theater's parent company, Main Street Theatres, said deciding when and where to build is complicated, but it boils down to location.

“You have to look at the market as a whole,” he said. “Are the existing screens in the most opportune places? From our standpoint, Aksarben will have the highest-density population within a one-mile radius of a theater in Omaha. The primary factor is where are the people.”

Barstow said local ownership will also be a plus for his theater in responding to customer needs.

A representative of Marcus Theatres declined to comment on the number of screens here or the company's expansion philosophy. Officials from AMC did not return calls.

Marcus, based in Milwaukee, put on hold a planned 14-screen theater at Southport Center, in La Vista near Interstate 80 and Harrison Street, when it bought Douglas Theatres (Twin Creek, Village Pointe, 20 Grand) in 2008, but went ahead with building Midtown.

AMC, based in Kansas City, Mo., owns Oak View 24 and bought Star Cinema 17 in Council Bluffs last year.

Demographic information has gotten far more sophisticated in recent years. Theater owners can find out the average household income, age, education level and buying habits of residents in nearly any neighborhood — even how often they go to the movies, said Patrick Corcoran, director of media and research for the National Association of Theater Owners.

“Each company approaches it in a different way,” Corcoran said from his Los Angeles office. “There just isn't a definitive number (of screens that fit a particular market), and the number of seats per screen varies widely, so seats are probably a better measure than screens.”

A typical multiplex might have one or two auditoriums that seat 300 to 400. The rest are smaller, with as few as 100 seats.

An old industry rule of thumb was that it took about 5,000 to 6,000 residents to support one movie screen. Divide Omaha's metro area population of about 850,000 by 152 screens, and you get about 5,600 people per screen, near the edge of the industry guideline.

In contrast, Des Moines, with a metro-area population of 562,000, has 92 screens. That's about 6,200 people per screen.

Wichita, Kan., with a metro-area population of 550,000, has 77 screens. That's about 7,200 people per screen.

Theater chains continue to seek reasons for people to go out rather than stay home.

Across the nation, the investment push now is to convert older auditoriums from film projectors to digital technology and to add 3-D capability, something not yet refined for effective home use.

In mid-2008 fewer than 5,000 of the nation's 39,000 movie screens had digital projection equipment, and about 1,000 could show digital 3-D. According to digitaltrends.com, digital projectors now are in place for more than 10,000 screens and 3-D capability could reach 5,000 screens by the end of this year, up 1,000 just since March.

When movies are released in both 3-D and 2-D formats, half the revenue comes from the higher-priced 3-D tickets. The average U.S. movie-theater ticket price rose nationally from $5.39 in 2000 to $6.41 in 2005 and $7.50 last year, according to the National Association of Theatre Owners.

Another national trend is luxury theaters with posh seating, food service and alcoholic drinks served at your seat — all for an added price. Omaha's Marcus Midtown, which opened last year, offers all that, plus trendy lounges. Aksarben Cinema is seeking a liquor license.

Most Omaha-area theaters have added digital, 3-D or IMAX screens in the past two years.

Contact the writer:

444-1269, bob.fischbach@owh.com

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