For Profit or for What?
A Comparative Case Study on Film Programming Strategies in Nonprofit
and For-profit Movie Theaters
Thesis
Presented in Partial Fulfillment of the Requirements for the Degree Master of Arts in the Graduate School of The Ohio State University
By
Kuo Guo
Graduate Program in Arts Policy and Administration
The Ohio State University
2018
Thesis Committee:
Margaret Wyszomirski, Advisor
Shoshanah Goldberg-miller
Copyright by
Kuo Guo
2018
Abstract
This case study explores the similarities and differences in film programming strategies for commercial movie theaters and nonprofit movie theaters. Movie theater attendance in the US film market has been declining since the beginning of the 21st century, and the number of movie theaters is also going down. Competition inside traditional film exhibition industry and outside from alternative streams are getting severe. The study adapted Margaret Wyszormirski’s Triple-
Bottom Line for arts policy to a triple-bottom-line for film programming, pointing out the three key bottom lines of film programming as content choice, audience development, and financial management. Two movie theaters near OSU main campus area, Gateway Film Center (nonprofit) and AMC Lennox Town Center 24 (for-profit), are compared in these three aspects. This study shows and analyzes their film programming strategies, and their film programmers’ thoughts and rules in making film programming decisions.
ii
Acknowledgment
I would like to express my great appreciation to my advisor Dr. Margaret Wyszomirski for her
guidance, encouragement, and support in my research, courses and life. I would also like to thank Dr. Shoshanah Goldberg-miller for serving as my committee member and supporting me
through the IRB process. I wish to extend my thanks to every professor in the Department of
Arts Administration, Education and Policy who has guided me and supported me through the master degree. Thanks to the very helpful staff members in the department for making my study
and life so much easier. Finally, I wish to thank my parents for their endless love.
iii
Vita
2014……………………………………B.F.A. Film and Television Producing,
Beijing Film Academy, China
2018……………………………………M.A. Arts Policy and Administration,
The Ohio State University
2016 to present…………………………Graduate Teaching Associate, Department of Arts
Administration, Education and Policy
The Ohio State Universtiy
Publications
Guo, K. (2014). On the Creation Strategies of Chinese Films’ Internationalization. Public Art,
Issue 19 of 2014, pp 187-189.
Fields of study
Major field: Arts Policy and Administration
Minor field: Cinema and Video Production
iv Table of Contents
Abstract ...... ii
Acknowledgment ...... iii
Vita ...... iv
List of Figures ...... vii
List of Tables ...... ix
Chapter 1: Introduction ...... 1
1.1 Background ...... 1
1.2 Statement of Purpose and Research Questions ...... 5
1.3 Introduction of AMC Lennox Town Center 24 (AMC Lennox) ...... 6
1.4 Introduction of Gateway Film Center (GFC) ...... 7
1.5 Significance of the study ...... 8
Chapter 2 Literature Review ...... 10
2.1 Current research on film exhibition market ...... 10
2.2 Film Programming in this study ...... 15
2.3 Content, audience, and finance ...... 16
2.3.1 The content ...... 16
2.3.2 The audience ...... 25
2.3.3 Finance ...... 30
2.4 Analytical Framework ...... 33
v Chapter 3. Methodology ...... 40
3.1 Qualitative Research and Comparative Case Study ...... 40
3.2 Data Collection ...... 43
3.3 Interview process ...... 44
3.4 Scope and limitations ...... 49
Chapter 4. Film Programming in AMC Lennox Town Center 24 ...... 51
4.1 Wide release and limited release ...... 52
4.2 Type of films and showtime ...... 55
4.3 Targeting at specific audiences ...... 61
4.4 Ticket price and Concession ...... 65
Chapter 5. Film programming in Gateway Film Center ...... 70
5.1 Program choosing in GFC ...... 70
5.2 Audience development through partnerships ...... 77
5.3 Financial challenges and strategies ...... 79
Chapter 6. Comparing AMC Lennox and GFC ...... 87
6.1 Duty of AMC Lennox’s manager and GFC’s programmer ...... 87
6.2 First Bottom Line – Content (Program) ...... 90
6.3 Second Bottom Line – Audience ...... 97
6.4 Third Bottom Line – Finance ...... 99
6.5 Combining the triple bottom lines into a film programming system ...... 102
Conclusion ...... 105
References ...... 108
vi
List of Figures
Figure 1. Number of cinema sites in the United States from 1995 to 2017 (Statsista)……...... …2
Figure 2. Annual ticket sales in the US from 1995 to 2017 (The Numbers)………..……….……3
Figure 3. The value chain for motion pictures (Eliashaberg, 2006) …………………...………..12
Figure 4. Recoupment waterfall for a $30m feature (stephenfollows.com)...... 13
Figure 5. Market share for each genre 1995-2018 (The Numbers)...... 18
Figure 6. Top-grossing movies for each year (The Numbers)...... 23
Figure 7. 2016 Gender share of total population, moviegoers, and tickets Sold (MPAA)...... 27
Figure 8. Frequent moviegoers by age (MPAA)...... 27
Figure 9. Frequent moviegoers by Ethnicity...... 28
Figure 10. Average cinema ticket price in North America film market (MPAA)...... 30
Figure 11. A rough film programming triple-bottom-line...... 34
Figure 12. Botti’s key factors of artistic value (Botti, 2000)...... 35
Figure 13. Chamberlain’s pricing management model for the performing arts (Chamberlain,
1986)...... 38
Figure 14. Film programming triple-bottom-line based on literature review...... 39
Figure 15. Demographics of Franklin County, OH. (Census Reporter)…………...…………….62
Figure 16. AMC theater chain revenue report of 3/31/2018 (Morningstar)...... 67
Figure 17. Revenue and expenses report of Gateway Film Center (Guidestar)...... 82
Figure 18. Numbers of genre movies screened in AMC Lennox and GFC...... 92
vii Figure 19. Numbers of screenings of genres in AMC Lennox and GFC...... 93
Figure 20. Content choosing model for film programming...... 96
Figure 21. Audience development model for film programming...... 99
Figure 22. Financial management model for film programming...... 101
Figure 23. Triple-bottom-line model for film programming...... 102
viii
List of Tables
Table 1. Cross-tabulation of interactively-coded gender-age variable with genre (BFI/Northern
Alliance/Ipsos Media CT)...... 20
Table 2. Distribution strategies and suitable films for them (Timelock Film AB) ...... 54
Table 3. Film genres programmed during July 9th to July 15th...... 56
Table 4. OSU student demographics (OSU Statistical Summary) ...... 63
Table 5. Ticket price setup of Gateway Film Center...... 65
Table 6. Film screening by genres in AMC Lennox Town Center 24 from 07/09/2018 to
07/15/2018...... 73
Table 7. GFC ticket price by screening time...... 84
Table 8. GFC ticket price by screening formats...... 84
Table 9. GFC membership levels...... 86
Table 10. Duties of the interviewees...... 88
Table 11. Films screened in GFC by categories from 07/09/2018 to 07/15/2018...... 94
ix Chapter 1: Introduction
1.1 Background
The film, also known as movie or motion picture, is a highly entertaining art form combining visual elements, storytelling, and performance. Movie theater, also know as cinema, is the site of film exhibition, which is the retail branch of the film industry. It is now one of the most popular places for people to enjoy their leisure time. A movie theater is actually selling the audience an experience of film, concessions and social environment, so it has a crucial influence on how people like about the film. Movie theater industry is very profitable among all art exhibition industries. The profit comes from ticket sales, concessions sales, and the selling of trailers before each film. Because of the considerable audience volume, movie theaters also attract advertising payments from local agents.
Film and television have been my interest since my childhood. I got my B.A in film and television producing from Beijing Film Academy in Beijing, China. The year I entered film college, 2010, was the first year that the college provides movie theater management courses, and the film college was the only official one in China, meaning that the course was the first movie theater management course in the country. The course was designed according to the dramatically ascending trend of theater chains in number as well as scale in China. It showed me how to capture the opportunities and meanwhile deal with challenges in the fast developing
Chinese movie theater market as a movie theater manager. After graduation, the two years I worked in China’s film and television industry made me realize that China’s entertainment
1 industry is far from maturity, especially in terms of production and exhibition. Knowing that there is a great difference between movie theater market in China and that in the United States, it is still astonishing to me that the number of movie theaters in the United States has been constantly declining since 1995 (Figure 1). The first cause of this declining trend is the merger and acquisition (M&A) of premiere theater chains with small independent movie theaters. The emergence of multiplexes, which is movie theater of multiple screens, made it possible for fewer movie theaters with more screens to cover the same or even larger numbers of audiences in one area. M&A is an inevitable business pattern in many industries, including the film exhibition industry.
Figure 1. Number of cinema sites in the United States from 1995 to 2017 2 Source: www.statsista.com
Other causes are the decline in people’s preference for going into movie theaters (Figure 2) and the intensified competition among media. Jon Silver and John McDonnell (2007) point out five business problems for theater operators: product substitutes such as home cinema and other digital technologies enable people to watch a movie in many forms other than going to the cinema; the total cost (time and money) of watching a movie in a cinema is too high; movie theaters are in a weak position to major studios which is resulted from a wide release strategy; the barriers to entry are very high in the movie theater industry; the barriers to exit a theater chain is also high that it’s difficult for movie theaters to generate revenue from alternative uses when they are empty.
Figure 2. Annual Ticket Sales in the US from 1995 to 2017
Source: The Numbers. www.the-numbers.com/market/ 3
Figure 2 shows the annual ticket sales in the US film market from 1995 to 2017. The ticket sales and box office of the first season of 2018 is simply timed by four because the statistics were gathered in spring 2018, so it cannot represent the whole year. We can see that from the year
2002 to 2017, the trend of US ticket sales is generally declining. On the other hand, the total box office from 2002 to 2017 is generally raising. A simple math of ticket sales (T), box office (B) and average ticket price (P) is T x P =B. If B is going up and T is going down, then P should be going up. The increasing of ticket price then in return intensify the declination of movie ticket sales (or cinema attendance), which has become a challenge for movie theater owners.
The decline of attendance means that movie theaters cannot make easy money nowadays. This is true for both theater chains and independent movie theaters, and doing well-designed film programming to differentiate themselves from their competitors becomes a strategy in dealing with this declination. Theater chains are facing the problem of increasing competition and a lack of product differentiation because the theaters in one chain are highly uniform in programming especially in the same area. Many independent movie theaters, which have been struggling to make a living, have considered a nonprofit path for more revenue sources and more programming options. Small independent movie theaters are usually kept by the community, either to preserve architecture landmarks or to keep a diverse film menu (Draper, 2012). In return, their missions usually include serving their communities. When they become nonprofit, their film programming strategies should fulfill their mission statements.
When I came to the United States in 2015 and started to learn about non-profit arts organizations,
Gateway Film Center caught my attention immediately. In China, most of the movie theaters are
4 for profit. Gateway Film Center is a nonprofit independent movie theater that aims at serving the community with diverse programs. I was fascinated by the various programs provided by GFC but also got curious about its operation mode and how it maintains sustainable. After living in
Columbus for more than one year, I found that AMC Lennox, which is a member of the largest theater chain in U. S., along with GFC, are the two major places for campus area students and citizens to watch movies. The movies shown in the two theaters are quite distinctive, working as complements to each other so that local audiences benefit from more options. Competition between them is also reduced by their distinctive film programs. Both of the two movie theaters are popular in the campus area. Because of the similarity in their location (almost same distance to OSU main campus), a case study of these two movie theaters benefits from many controlled variables, such as transportation, audience base, and same film releasing windows. The comparison between them is thus more convincing. This allows me to specifically examine the differences between their film programming strategies and the rules behind their programming decisions.
1.2 Statement of Purpose and Research Questions
This comparative case study aims to examine what film programming strategies the selected commercial movie theater and nonprofit movie theater have applied to cope with the declination of movie theater attendance. The overarching research question is: How do commercial theater chains and nonprofit movie theaters make their film programming decisions similarly and differently?
5 Additional question to help to explore the overarching question include:
1. What are the rules or thoughts behind their film programming decisions? What information helps them in making the decisions?
2. What are their missions? How are they driven by their missions?
3. What is the relationship between the two movie theaters?
4. How to measure the success of their film programming?
5. What challenges and limitations do they have in making programming decisions?
6. What could be done to make their film programming better?
1.3 Introduction of AMC Lennox Town Center 24 (AMC Lennox)
AMC is an American movie theater chain owned and operated by Dalian Wanda Group.
Founded in 1920, AMC has the largest share of the American theater market ahead of Regal
Entertainment Group and Cinemark Theaters. After acquiring Odeon Cinemas, UCI Cinemas and Carmike Cinemas in 2016, it became the largest movie theater chain in the world, with 2,200 screens in 244 theatres in Europe and over 8,200 screens in 661 theatres in the United States.
AMC theaters provide their audiences with premium movie-viewing experiences. All locations are equipped with RealD 3D technology, and some of them have other cutting-edge screening formats as IMAX, Dolby Cinema, BigD, PRIME and Virtue Reality, etc. AMC also provides its frequent customers with reward programs, the most famous of which is AMC Stubs starting from
April 1st, 2011. This program costs $15 per audience for an entire year. AMC Stubs members will receive $5 on every $50 spent on movie tickets or concessions in any AMC theatre. AMC
6 Stubs members also receive a free size upgrade to popcorn and drinks. As of March 29, 2012,
AMC Stubs had 3.2 million members, which represents approximately 18% of AMC attendance during fiscal 2012. In July 2016, AMC Stubs was split into two programs, the free AMC Stubs
Insider, and the fee-based AMC Stubs Premiere and AMC Stubs A-list. Customers can choose their optimal membership programs based on their frequency of movie-going.
AMC Lennox Town Center 24 not only has premium screening formats as IMAX and RealD 3D but also customer-friendly services. AMC Lennox Town Center 24 has specialized pricing
(student pricing, military pricing, and senior pricing), and provides accessibility assistances
(closed caption, audio description, assisted listening devices and wheelchair access). According to my personal experiences in the theater, I enjoy the stadium seating as well as the many drinks and food options a lot. Other theaters in AMC theater chain have some features that AMC
Lennox Town Center 24 doesn’t have (for example, dine-in theaters). But for me who just want to enjoy a premium movie experience, it never let me down.
1.4 Introduction of Gateway Film Center (GFC)
Gateway Film Center is a nonprofit movie theater of eight screens near the OSU campus. It was opened in November 2005, owned by Campus Partners development group, previously managed by Drexel Theatres Group and then Landmark Theatres. In 2009, it was taken over by an independent operator and was renamed as Gateway Film Center. In 2014, the fifth year of its operation, Gateway Film Center switched from for-profit movie theater to nonprofit movie theater (Evans, 2014). Its president, Chris Hamel, stated that GFC had always been a community 7 and mission-driven film center. GFC benefits from new funding sources, partnerships and more programming options which used to be unavailable being for-profit. Chris Hamel believed that
“Ultimately, the change enables us to better pursue our vision: playing movies that inspire people to see the world and each other in new ways.”
GFC has been making efforts to engage and inspire people by its programming. It was honored
Sundance Award for excellence in programming, community involvement, and operations in
2016. GFC publishes its monthly programming guidance on its websites. It is filled with movies carefully selected by Chris Hamel and events organized by GFC staff. Every year GFC holds several festivals, creating a place for filmmakers to show their works and network with each other.
1.5 Significance of the study
I hope that my case study on the programming of both commercial theater chains and nonprofit movie theaters can shed light on future programming strategies, especially to those that have just entered the business or been struggling with a declination in attendance. I hope this paper can help them think about both for-profit and nonprofit path and make their decisions. As traditional film exhibition industry being challenged by other movie-viewing streams, movie theaters are urged to get distinctive from other streams as well as from their competitors. This study provides a systematic model of analyzing film programming and programming-related audience development and financial management, which can help movie theaters diagnosing themselves and making adjustments. Moreover, for the rapidly rising film exhibition industry in China, I
8 hope this study can be a guidebook for Chinese movie theaters in improving attendance through a well-designed programming decision-making system.
9 Chapter 2 Literature Review
2.1 Current research on film exhibition market
Motion picture, as one of the most popular form of art today, is generally regarded as profitable.
Even though arts are not simply created for profit, no one could deny that artists and art creativity need financial support. The success of a film could be judged by its artistic quality, audience attendance, or reviews, and box-office is always an important indicator. Upon my searching for film industry-related research and scholarly materials, it is obvious that the motion picture industry has been gaining increasing attention from the academic domain. This is because that motion picture is playing a more and more important role in the economy, providing a great number of working opportunities and generating a considerable revenue worldwide. In the year
2016, about 405,620 people are employed in the motion picture and video industry, ranking 85th of 266 industry groups (DATA USA, 2017). The global box office revenue is forecast to increase from about 38 billion U.S. dollars in 2016 to nearly 50 billion U.S. dollars in 2020. Revenue from TV & Video worldwide reached 286.17 billion dollars in 2016 (Statista, 2017). Besides, the motion picture is a significant promotion to American culture. Data are also relatively easy to get compared with other art industries (Eliashberg &Elberse &Leenders, 2006).
The increasing interest to researches on motion picture industry inspires some literature reviews on previous materials. Eliashberg, Elberse, and Leenders organize their literature review according to the three key stages of the motion picture’s value chain: production, distribution, and exhibition (Figure 2). The literature review covers 158 academic research from 1985 to
10 2006. Eliashberg claims that literature in movie production have been divided into two research traditions: the psychological approach and the economic approach. The psychological approach focuses on personal movie-watching decisions, which are related to multiple variables like opinions, needs, values, attitudes, moods, and personality traits. Researches of this approach often collect data by surveying individual consumers. The economic approach explores variables that influence the financial performance of motion pictures. Researches of this approach use aggregate data on movie-going behavior collected by industry trade sources. The two categories of film production related researches are very alike to the two purposes of film programming: for profit or for audiences’ choices. Knowing the two distinctive sources of data collected for two categories of approaches is also helpful to data collection of my research. Eliashberg’s literature review on film distribution also indicates that distributors benefit from shortening the time between theatrical and nontheatrical windows. The rising of nontheatrical streams has begun to impact on theatrical distributions strategies. Theatrical exhibition venues are facing this challenge by nontheatrical streams and are forced to react. Literature review on exhibition shows that strategies of theater management are becoming complex. Duties of theater managers such as programming, administration, pricing tickets and concessions and film scheduling are being discussed. The effectiveness of a strategy depends on its context but this literature review provides me a sense of what has been studied on film exhibition industry as well as its relationship to film production research and film distribution research. The literature review shows that academic research on motion picture industry is extensive and growing rapidly, but research on exhibition and other release streams such as TV, home video, VOD is far from enough. The many options have changed the way of film distribution, exhibition, and streaming,
11 indicating that further interest of research on motion picture will most likely be focused on consumer’s behavior and choices.
Figure 3. The value chain for motion pictures
Source: Eliashaberg, J.& Elberse, A. &Leenders, M.A.A.M (2006) The Motion Picture Industry:
Critical Issues in Practice, Current Research, and New Research Directions.
Film exhibition is the terminal stage of motion picture’s value chain, and movie theater is a major site for film exhibition. However, the importance of movie theaters in the motion picture industry is weakened by the diverse streams of experiencing a film (Figure.2). The multiple releasing choices are given to film distributors also changes the relationship between film distribution and exhibition, making movie theaters more passive in the split of box-office. There is not a standard of what percent could the theaters get from the box-office, but most literature indicate that the ratio is around 40%, varied from 28% to 49%, which is also subject to timing in the release period. As the window between theatrical release and nontheatrical release get shortened, film exhibitors have to be more careful in selecting movies and attracting audiences.
12
Figure 4. Recoupment waterfall for a $30m feature, grossing $75m worldwide
Source: How is a cinema’s box office income distributed? stephenfollows.com
As we can see from this recoupment waterfall for a $30m feature film (figure 3), theatrical box office contributes about one-third of the gross, almost equal to the sale of television copyright.
Home entertainment, VOD and other ways of watching the film contributes another one third.
After deducting all costs, the profit that comes to the investors and producers each is only
$1,789,376, a fairly small proportion from the gross. As mentioned earlier, because of the shortening time between theatrical and nontheatrical windows, the relationship between movie theaters and other streams are becoming more and more competitive. For example, in early 2012, digital download window (iTunes, Amazon, YouTube, etc.) starts about 9 months after theatrical 13 release, while in 2014 the period shrank to 3 to 4 month (Granados, 2015). Since we’ve never seen a newly released movie in a movie theater for as long as 3 months, there’s no evidence that digital download window and other streams are taking the market share of theatrical release.
However, it is reasonable to assume that there will be audiences who would watch a movie in movie theaters but now wait until nontheatrical window starts because it’s much shortened. Also for film producers and distributors, the importance of theatrical box office is reduced by competitive streaming platforms. Though, theatrical box office is not only a revenue source but also an indication of success. The sales of following streams like home entertainment, television and VOD rely on the movie’s popularity and reputation by movie theater goers. This is why the attention to theatrical box-office is only weakened but never ignored.
The following literature review will be focusing on movie theaters and their film programming strategies to make theaters succeed or survive in the severe competition among movie theaters themselves and with other film screening streams.
Through my review of previous academic research on movie theaters, I categorize these literature according to three key elements in film programming strategies: the audience development of movie theaters (the consumer), the content they provide to their audience (the product), and financial decisions related to film programming. These three elements are intrinsically related to each other, but different literature have particular emphases. This literature review examines the three key elements and their interrelation, trying to establish a framework of the key elements and strategies tied to them.
14 2.2 Film Programming in this study
There hasn’t been a definition of film programming in the academic world, but there are several definitions of film programmer and introductions of film programmers’ duties. A definition by
Creative Skillset of film programmer is:
Programmers are responsible for choosing the right films for the right target audience. This involves building good relationships with film distributors, to ensure that the required films are secured. Programmers must view everything they select for exhibition. Some degree of travel may be required, to attend previews or screenings of the films due for release.
Bosma in his 2015 book describes film programmer as:
This person chooses all films from scratch and collects them from several sources, guided by both personal and professional taste and by informed intuition about potential audiences.
Creative Content Australia has a more straightforward but inclusive definition of film programmer:
A film programmer is responsible for choosing which films play, and how often they are shown, in their cinemas. Film programmers may work for a single cinema or an entire chain.
The definition by Creative Skillset focuses on film programmer’s duty as acquiring movies and ways of doing it. It shows two ways of acquiring film copyright: from film distributors or from film festivals and film markets. The definition by Bosma indicates that film programming requires professional knowledge of the relationship between film and audience. Creative Content
Australia’s definition is a plain introduction of film programmers’ duties. As there are commercial and nonprofit movie theaters of various scales, film programmers of them could 15 have different duties. These three definitions all reveal only parts of film programmers’ duties.
The duties of film programmers can include: choosing films based on professional film knowledge, acquiring films from distributors or film markets/festivals and making screening schedules according to audience behavior/rivals/resources.
In this paper, I am not trying to define film programming or film programmer, but rather study the duty, the decisions, the rules of making such decisions, and above all, how and where film programming could influence the movie theaters and the audience. In the following chapters, I will be discussing strategies for film programming, in terms of the choices of films, the development of audience and financial considerations. Film events, which are much more common in non-profit and independent movie theaters, is not within the scope of this paper. Film events are of great importance to non-profit and indie movie theaters but is not a major concern of the commercial theater case in this study, thus can only make limited contributions to the comparison.
2.3 Content, audience, and finance
2.3.1 The content
The film, as the content, is the object of film programming. The larger number of varieties one brand has, the more the consumers are likely to buy that brand (Horrace & Huang &Perloff,
2016). To meet the taste of different audiences, movie theaters show diverse movies at one time.
For the theaters in theater chains, the movies they show in a particular period is highly fixed. As a result, film programmers in theater chains mainly focus on a more profitable arrangement of new releases in prime time. In the non-prime time when audience attendance is low, theater
16 chains may pursue a diversity in programming to attract audiences of specific tastes. Film programmers in nonprofit or independent movie theaters, even though also need to consider about the profit and attendance, can be more flexible in programming. Based on my personal observation, nonprofit and independent movie theaters are more likely to screen the same movies repeatedly, in order to make extreme use of their purchases and fill blank schedules. With different organizational missions and limitations, film programmers in for-profit and non-profit movie theaters aim at different goals but works on similar principles. What does a film programmer do? What skills are required to be a good film programmer? Bosma answered this question by asking a more detailed question:
In which way could you aim for both a sustainable high quality artistic diversity, and at the same time create a network of loyal customers through an effective and efficient out-reach to all possible audiences?
No matter for film programmers in theater chains pursuing the profit or for those in nonprofit and independent theaters pursuing a high artistic quality and diversity, attendance is always the base in achieving the goals. This is also a trend that theater pairs located closely to each other tend to make less similar programming choices (Chrisholm, McMillan & Norman, 2006). Thus, distinctive programming is a key tool for movie theaters to be outstanding among their competitors. In this way movie theaters which are close to each other avoid stealing each other’s audiences.
17 Film genres were generated because the first representative of a genre was successful and created a meaning for its audience, then films following a similar pattern meet the expectation of a similar audience (Jeffres, Neuendorf, and Giles, 1990) Today film genre is still a very helpful indicator of styles and types to audience in making their movie-going decisions. Film studios and producers could in a degree foresee the success of a film by targeting specific audience groups with genres of movies. For movie theaters, different film genres attract different audiences in a local market. Figure 5 shows the market share pattern for each genre, which is a useful reference for movie theaters in making exhibition choices.
Figure 5. Market Share for Each Genre 1995-2018
Source: https://www.the-numbers.com/market/genres
18 Figure 5 shows that romantic comedy, horror and thriller/suspense movies relatively favored by a smaller proportion of audiences. Adventure, action, and drama are the three most popular genres in the past two decades. One interesting pattern from this figure is that the market share of comedy is in a continuously declining trend. This trend might result from the increasing number of low budget and low-quality comedy movies. Movie theaters can rely on such patterns to help arrange the schedules of screening. Some genres often show up together (e.g., adventure and action, romantic and comedy). Thus, the popularity of one genre will affect a related another, which brings more challenges to film programmers.
In November 2012, Nick Redfern applied correspondence analysis to study the genre preferences of UK film audiences. He defines correspondence analysis as follows:
Correspondence analysis (CA) is a multivariate technique for exploring and describing frequency data defined by two or more categorical variables in a contingency table. By calculating chi-square distances between the row and column profiles in a table, CA determines the (dis)similarity of the reported frequencies. CA aims to reveal the structure inherent in the data, and does not assume an underlying probability distribution.
Based on the data from the British Film Institute (Table 1), he concludes that gender is the dominant factor in audience preferences, and age is secondarily important. The Motion Picture
Association of America (MPAA) presents statistics of demography in US/Canada theatrical market, but lack of genre-related figures. I believe a genre – demography study could be
19 conducted with necessary figures in hand, and the outcome of which could be a helpful guidebook for movie theaters as well as film producers to determine film genres.
Table 1. Cross-tabulation of interactively-coded gender-age variable with genre. Cell counts represent the number of respondents in each group expressing a preference for a genre.
Source: BFI/Northern Alliance/Ipsos Media CT
As we can see from this table, gender and age are two independent variables, and the figures in the table representing the number of participants preferring certain genre are dependent variables. Looking along each column, we can see that the preference for each genre varies with ages; and if we compare different gender of the same age group, the differences are also obvious. 20 This table displays that gender and age are two important variables to the preference of genres, thus such pattern could be a useful reference in making film genre selections. For example, the largest number in this table is the preference of females of 55 and older to drama films. Males of
55 and older also have a high ratio of preference to Drama, as the fourth among all genres. This information indicates that if a film programmer is programming a movie for an event for senior audiences, or he’s programming for a movie theater which is based in an aged community, drama movies could be good choices. Information about audiences of certain age or gender and their preferred film genres can help film programmers conduct a popular (could also be profitable) programming.
To discuss what films are good to watch is difficult. Everyone has his taste and it’s hard to say what contents the audiences are in need of according to their different characteristics, experience, and backgrounds. A concept named “programming ethos” was proposed by Cinema for All, an organization supporting community-based theaters (2014). The three key elements of programming ethos are programming of films which bear witness to the world and enlighten the audience; programming of films that may have been neglected by commercial cinema; programming that pays homage to the great works of film culture heritage. “Programming ethos” pays more attention to the artistic value of the movies, and serves to complement the programs of commercial theater chains. However, it doesn’t pay enough attention to the audience attendance, which has a great impact on the popularity and financial sustainability of a movie theater.
“High concept” film is a concept responding to the difficulties in predicting the audience’s taste.
For movie theaters serving a community of audiences of different backgrounds, what are the
21 approaches to engage a large proportion of them? One is to provide as diverse programs as the movie theater can, while another is to provide the programs that most audience can appreciate.
High concept movies are of the latter approach. Phillips presented the features of “high concept” film in his study of film and audience:
a straightforward, easily pitched and easily comprehended story
character and narrative are reduced and simplified
there is a very strong match between image and music
parts of the film can be easily transferred into other ‘windows’ of exhibition e.g. montage of
shots from a film may be released with a soundtrack to become a pop video
film is sold on ‘look’ - spectacular special effects, high production values
the audience is to be caught up in the ‘surface’ of the film
Here I find a figure about movie of top box-office each year since 2015:
22
Continued
Figure 6. Top-grossing movies for each year
Source: https://www.the-numbers.com/market/
23 Figure 6. Continued.
As expected, every top movie of the past 20 years is “high concept”. Most of these movies have fictional, adventurous story, superheroes, original screenplay and action scenes. There is no bias
24 of culture, age, and gender within these movies, thus most audience can appreciate them. People always get interested in the story and fascinated by the visual and sound effects, rather than thinking hard about the meanings behind the story. Many of the movies are of series that have many fans following, thus guarantee a high box-office if they are not of terrible quality. For both commercial theater chains and non-profit movie theaters, “high concept” movie is a good way to attract audiences, with fewer resources wasted compared to diverse programming (seats, labor, and schedule). Seats of “high concept” movie screenings tend to be largely filled during the first week of release. A lot of film programmers realize the popularity of “high concept” movies and know the profit they could bring to the movie theater. Consequently, similar programming will appear when a new “high concept” film is released, but no theater is willing to give up the opportunity to screen it.
When it comes to competition within in a film market, film programming decisions are also affected by the programming of rivals. Empirical analyses show that product-retention/product- exit decision is not only an intra-theater but also an inter-theater consideration. I was told by an experienced movie theater manager that for a newly released film, the film programmer needs to dynamically program it according to its performance, and meanwhile decide when to drop it taking the rival’s programming decision into consideration. If the movie’s attendance performance in the theater drops dramatically and the rival still maintains a high screening frequency, then it’s time to give it up.
2.3.2 The audience
25 Knowing your customers is always a key strategy in business. Knowing their demands, preferences, and desires is of great help in maintaining patrons, attracting new customers and better capturing profits. Film producers use “windowing” to best capture profits, which means the film is released on different streams is at different times. Nontheatrical streams including online streams and home videos will be available several months after the theatrical release.
Technically the customers of movie theaters and those of other streams are divided by these windows. For movie theaters, it is useful to know the demography of their customers so that they can best meet their demands. Basil’s research in 2001 on the demography of film audience shows that younger people, and affluent people, consume more feature films, but also buying or renting more videos. People with lower income and larger families tend to buy or rent videos more than going to the cinema. In general, there are several indicators determining the choice of movie tickets or other streams: the consumer’s age, level of income, number of family members and the desire for new products. The figures below show patterns of moviegoers according to gender, age and ethnicity in U.S/ Canada film market in 2016. It could be a general reference for theaters to adjust the screening contents and schedules. I’ve presented the age/gender to genre table earlier in this chapter. A simple reference of the table and figures below is to decide the frequency of programming certain genres of films. Gender share of total population, moviegoers, and tickets sold are equally divided. Then programming decision on genre relies more on the percentage of frequent moviegoers by age. The national movie-going statistics are more useful for film producers in the percentage of production of different genres. To movie theaters, demography studies and statistics of their local community would definitely be more helpful and accurate as references in making programming decisions.
26
Figure 7. 2016 Gender Share of Total Population, Moviegoers, and Tickets Sold
Source: MPAA (2016). Theatrical Market Statistics 2016.
Figure 8. Frequent Moviegoers by Age
Source: MPAA (2016). Theatrical Market Statistics 2016.
27
Figure 9. Frequent Moviegoers by Ethnicity
Source: MPAA (2016). Theatrical Market Statistics 2016.
When the audience experience movies in cinemas, most of them may not notice the inner design of the theaters. However, theater design plays an important role in enhancing the movie experience and engaging the audience, especially at this time when other release streams are attracting a growing market share from movie theaters. The ideal architectural designs for theaters are considered differently from culture to culture (Encyclopaedia Britannica). Bosma uses the word “Scenography” to describe a good theater design, meaning that designing the surroundings of each screening with personality and imagination. There are two basic elements in designing the interior of a theater: comfort and interactivity. The audience going to a movie theater want to experience the high-quality audio and the big screen, but also feel as comfortable as at home. 28 Some studies show that the larger the screen is, the greater the audiences are engaged. Movie theaters making efforts in attracting a large number of audiences seems like a dominant norm.
Nevertheless, some audiences prefer a somewhat private cinema experience. Comparing to a home theater, a private screening room can provide a big screen and high-quality sound, and most important, a cinema’s environment. For the screening of movies aiming at specific groups of audience, the experience in a more compressed, small room will be better than a big but empty room. Some multiplexes take private experience into consideration so that their rooms vary in size for different programs.
Comfort is not only physically comfortable but also mentally enjoyable. According to a study on why people choose not to go to the movie theaters, the No. 1 answer is “disruption” (Lee, 2015).
What the cinema environment can provide but the home theater cannot is the interaction among the audience. An appropriate, moderate interaction will reinforce the audience’s emotion and the feeling of being a part of the environment. A disruption, however, will distract audiences from getting engaged and ruin the experience. Alamo Drafthouse is a theater that has earned a reputation for being strict. Children under 6 years old, people talking or texting, are always refused by the theater. The strictness of the rule is different across theaters, but one code will always be true: there need to be rules to protect the audience from being distracted.
The fastest way to know the audience and find their problems is through active communication.
Audience’s feedback is as valuable to film programming decisions as to keep an enjoyable cinema environment. Newspapers and magazines are still popular channels of audience reviewing a film or a movie theater. While, before some issue become serious enough to show up
29 in a publication, there have been many efforts the movie theaters made to reach to their audience and gather feedback. The website and communication board or mailbox are good approaches to file a complaint or compliment. In-person communication is a significant indicator of good customer service. A quick reaction to problems can build a reputation of valuing customers and attract higher attendance.
2.3.3 Finance
I did a simple calculation of movie theater attendance, box office, and average ticket price, and claimed that as attendance going down while total box office going up, the average ticket price should be going up. Figure 10 shows that the average cinema ticket price has indeed been rising from 2007 to 2016. The rising of the ticket price is a factor of movie attendance decline, especially when the time between theatrical and nontheatrical windows is shortened. An audience can watch a movie at the price of less than $5 on YouTube if he’s willing to wait for the nontheatrical release. To better compare movie ticket price and the cost of watching movies through other streams, we need to know how movie tickets are priced.
Figure 10. Average Cinema Ticket Price in North America Film Market
Source: MPAA (2016). Theatrical Market Statistics 2016. 30 Many moviegoers may not pay attention to a simple truth that the price charged for seeing each movie within a theater is the same. Since the early 1970s, this pricing model of uniform prices for differentiated goods has been applied by movie theaters in the United States. (Orbach &
Einav, 2007) Even with some kind of price discrimination, such as student discounts, senior discounts, or bargain Tuesdays, the price of watching a film doesn’t vary with the type of films.
Marburger states that although people purchase tickets mainly to experience the performance, there are always complementary products offered along with the performance. About the ticket price, he further suggests that profits will be maximized by pricing in the inelastic section of demand if the price setter receives a share of concessions revenue (1997). In 2006, Peter Davis developed an econometric model of retail demand to evaluate the effects of consumer transport cost, and a theater’s price and quality on its competitors. The conclusions he drew from the analysis shows that transport cost is important and film exhibition is a highly localized industry.
The relationship between movie theaters and distributors is another critical factor in pricing. If movie theaters could attract the same set of films, they would prefer a relatively low admission price for high admissions, because this will generate more concession sales, which they don’t need to share with distributors. Gil and Hartmann, being aware of the correlation of movie tickets and concessions, developed an aggregate model of discrete-continuous demand to demonstrate that regression analysis could be used to predict the profit by aftermarket prices.
They drew the conclusion that a high price of concessions captures more surplus from customers very willing to pay for the admission ticket.
Orbach and Einav, on the contrary, taking demand characteristics into consideration, claim that movie theaters could benefit from price discrimination across movies and show times. However,
31 they also admit that there are many restrictions and causes that force the uniform prices model.
First of all, price discrimination across movies could be perceived as unfair by the audience, which could be harmful to the business. Uniform prices seem fair. Second, the demand for a movie is uncertain and hard to estimate, and further adjustment of price is not ideal. Third, administering differentiated pricing is costly, and is hard to monitor if moviegoers purchase low- price tickets to watch high-price movies. Moreover, the box office sharing scheme between exhibitors and distributors diverges their interests, leading to many problems according to pricing and sharing, and monitoring.
It seems that the uniform prices model in movie theaters will maintain the same within a foreseeable future, so the discussion about whether uniform the prices or not will lead to no end.
Nonetheless, there are still many pricing strategies that could be played based on this situation.
For example, should movie theaters give lower prices to award their patrons, or to attract new customers? Lee and Fay demonstrate in their paper that it is optimal to offer low prices to past customers in three conditions: if a movie theater’s product is less appealing to new customers than its rival’s product, if its current customer base is large, or if its customers are more sensitive to others’ prices than its rival’s customers (2017).
The fact is that no movie theater will ask for a higher price from their patrons. The price discrimination strategy to cope with the uniform price is membership. Many movie theaters offer membership programs, with which the customers can get discounts on concessions, earn credits, or other privileges such as online services and seat reservation. The biggest cinema membership program, MoviePass, emerged in 2011 and became mainstreamed in 2017 (Lynch, 2018). With
32 around $9.95 monthly fee people can see unlimited movies, but only one each day. More than 2 million users have subscribed to this membership program. According to the company, the membership works at 91% theater in the country, applying to any standard 2D movies.
MoviePass is facing problems after getting popular. Many membership cards got canceled by the company in dealing with violated uses. The future of this national membership program remains uncertain.
2.4 Analytical Framework
Wyszomirski proposed a triple-bottom-line model of financial sustainability, artistic vitality and recognized public value for the nonprofit arts in her article (2013). I believe that the film programming strategies of commercial theater chains, even though considering profit above any other values, could fit in the triple-bottom-line but to different extents. These extents are part of what I want to discover from my case studies on GFC and AMC Lennox. According to my literature review, previous researches on film programming strategies lies in three categories: content, audience, and finance. I am surprised to see a similarity between my adapted triple- bottom line for film programming and Wyszomirski’s triple-bottom line for nonprofit arts: content - artistic vitality, finance - financial sustainability, and audience – recognized public value. Thus, I come up with this adapted triple bottom line for film programming: content, finance, and audience. Literature show that film programming strategies can include two or three of these key elements, so I draw this abstract theoretical diagram below.
33
Audience
Finance Content
Figure 11. A rough film programming triple-bottom-line
To better detail this theoretical framework, I then look at theories of each of the three bottom lines. A diagram of determinants of artistic value by Botti shows the three key factors determining the artistic value of an art experience: the abstractness and subjectivity of artistic products, the consumer’s personal factors, and the situational factors of the environment (2000).
I think this is a good presentation of how film is valued: abstractness and subjectivity means that it is the story and theme of the film rather than its appearance that shows the artistic value; movie theaters as the environment of experiencing a film should be equipped with advanced audio and visual technology to provide a distinctive movie experience, and also managed well as an interactive situation to provide optimal experience. The final phase is the consumers’ own interpretation of the movie based on their unique experiences, including their cultural backgrounds, educational backgrounds, tastes, personal story, memorable moments, etc.
34
Figure 12. Botti’s key factors of artistic value.
Source: Botti, S (2000). What role for marketing in the arts? An analysis of arts consuption and artistic value.
As for complementing this model, in Bosma’s four domains of cinema evaluation, I find that the environment and artistic products are also valued, but other domains are also stated critical to the quality of the content: social significance and impact (2015). Audience appreciation and media coverage are indicators of social significance and impact of a movie. Combining these two frameworks together, a four-domain model of assessing a film’s value is developed as artistic
35 quality, interactive and comfortable environment, consumer’s interpretation, social significance, and impact. In my understanding, this model can be chronological but also circulatory because social significance and impact, which is the combination of a great many consumers’ interpretations, could also be a useful reference for future artistic producing.
After looking at many literature about film and audience, arts engagement and audience development, I find that Bosma’s cinema audience development theory is the most comprehensive and detailed. He states that the short-term of audience building is to simply fill the seats, while the long-term audience development includes many steps:
- To build a new audience, to increase the general demand.
- To attract a young audience, to increase the segment of a specific age group.
- To strive for a diverse audience, to connect to a broad range of minorities and groups with specific tastes.
- To aim at social inclusion and outreach, to attract audiences of isolated or deprived areas and communities.
- To seduce a potential audience to respond. Ask them to articulate their feedback on their expectations and experiences. To explore and evaluate their opinions, to stimulate their commitment, engagement and interaction both of offline and online (like, share, comment, discuss, participate).
- To safeguard audience retention, to keep existing audiences return as customer.
- To increase the visit frequency of an audience, make them to attend more screenings.
- To create lively memories and reflections.
These steps can be concluded into domains: new audience development, diversity of audience, audience retention, active feedback, and influencing audience. Influencing audience here means
36 to cultivate audiences’ movie-going habit, to increase their movie-going frequency, and inspire their reflections. These five domains constitute a sequential model of audience development.
Chamberlain’s model of pricing management for the performing arts consists of three phases: information systems, decision processes, and action procedures (1986). The model shows that the three key branches of arts financial management: pricing, budgeting, and marketing, chronologically relate to and affect each other. The phases within each of the three branches also work in cycling time manners that help the arts organization make dynamic financial decisions.
An illustration of the system is as the following figure, showing the business model of a performing organization during a fall-spring season.
37
Figure 13. Chamberlain’s pricing management model for the performing arts.
Source: Chamberlain, O (1986) Pricing Management for the Performing Arts.
This price management model is a general reference for analyzing the actual movie theater financing models of AMC Lennox and GFC. Their distinctiveness in marketing, evaluation, and pricing will be discussed as well as the decision-making process within each of the three phases.
Combining the content model, audience model and financial model from the literature, I come up with a dynamic, comprehensive triple bottom line model of film programming strategies as
38 below. This model serves as the framework for analyzing and comparing film programming strategies of the two movie theaters. Their actual film programming model could be different.
Figure 14. Film programming triple-bottom-line based on literature review
39 Chapter 3. Methodology
3.1 Qualitative Research and Comparative Case Study
Qualitative research is a scientific method of observation to gather non-numerical data (Babbie,
2014) Qualitative research “refers to the meanings, concepts, definitions, characteristics, metaphors, symbols, and descriptions of things” rather than “counts or measures.” (Berg & Lune,
2012) The subject of this research, film programming, is not a measurable variable, but a concept of choices of films and its relationship to audience development and financial management.
According to Yin (2011), there are five features of qualitative research, that helps decide if qualitative research is what you need:
1. Studying the meaning of people’s lives, under real-world conditions;
2.Representing the views and perspectives of the people in a study
3.Covering the contextual conditions within which people live;
4. Contributing insights into existing or emerging concepts that may help to explain human
social behavior
5. Striving to use multiple sources of evidence rather than relying on a single source alone
The five features reflect my purpose of doing this research. My care for movie-goers, in the context of OSU campus area, and my concern for movie theaters’ financial sustainability, in the current trend of a decline of theater attendance, drive me to compare their programming.
40 Multiple sources are used to support or test the film programming strategies used by both movie theaters, in order to help them keep on the strategies or make changes.
I am very lucky, as a researcher, to have two excellent cases to conduct this research. GFC and
AMC Lennox are two types of organizations, one nonprofit and one for-profit, serving audiences in the same area, and with distinctive film programming strategies. It didn’t take me a long time to decide using case study in my research. As Yin states (1994):
A case study is an empirical inquiry that
● investigates a contemporary phenomenon within its real-life context, especially when
● the boundaries between phenomenon and context are not clearly evident
This means that “you would use the case study method because you deliberately wanted to cover contextual conditions – believing that they might be highly pertinent to your phenomenon of study”. After writing the literature review, I was eager to test if the adjusted “triple-bottom-line” model of film programming is feasible or pertinent to what the movie theaters are doing now.
Further, Yin states that the case study inquiry
● copes with the technically distinctive situation in which there will be many more variables of interest than data points, and as one result
● relies on multiple sources of evidence, with data needing to converge in a triangulating fashion and as another result
41 ● benefits from the prior development of theoretical propositions to guide data collection and analysis
Before doing this research, I was already aware that film programming is a very complex behavior, the decisions in which greatly rely on its context. Not only the film industry as a whole has a strong impact on film programming, but also the community the movie theater serves that matters a lot. Competitive media and rival movie theaters also need to be dealt with in making the decisions. The literature on film programming are also built up by resources on many different factors that could affect it. Besides, the success of film programming cannot be simply measured with box-office, even for a for-profit theater chain. Thus, this case study on film programming in movie theaters meets Yin’s definition of case study.
Comparative case study, or multiple-case study, compared with single-case study, can yield more compelling evidence, then the overall study could be considered more robust (Herriott &
Firestone,1983). However, this advantage over single-case study is based on a careful selection of cases. Yin(1994) claims that the cases in a comparative case study must (a) predicts similar results or (b) produces contrasting results but for predictable reasons. I believe my comparison of
AMC Lennox and GFC is a strong one because they lie in a very similar context, which means that many variables are controlled, such as audience base (their backgrounds, socio-economic status) and transportation, etc. The reason why I choose only include these two movie theaters in my study is that other movie theaters in the OSU campus area are not good matches for my intention. My purpose of this study is to examine the different or similar rules and thoughts behind film programming decisions in non-profit movie theaters and for-profit movie theaters.
AMC Lennox is a representative commercial theater of a national theater chain, and GFC is the
42 comparable counterpart to it in terms of numbers of screens, audience base, and local reputation.
Other non-profit movie theaters, with fewer screens and smaller scales, will be insufficient cases to be compared with AMC Lennox.
Since film programming is a complex decision made with many factors, I am not expecting to see an entirely similar or contrasting result. In some aspects, for example, audience engagement and development of box-office, I am expecting similar consideration and strategies. While for some other aspects like the relationship to audiences and thought behind film selection, I’m expecting different considerations. When it comes to these contrasting results, I am not trying to conclude which strategy is better but to combine the thoughts together and create an overall model of what needs to be cared about when making film programming decisions.
3.2 Data Collection
Data I use in this case study are mostly public data available online. There are monthly film programming guides on Gateway Film Center’s website (http://gatewayfilmcenter.org/now- showing/program/), which includes introductions, formats, features and age suitability of films screened every month. These film programming guides are important references to help me get a sense of and observe a pattern of the programming strategies in GFC. GFC’s financial report is available on Guidestar (https://www.guidestar.org/profile/47-3178799). It has details of GFC’s revenue and expense for the year 2016.
43 AMC Lennox’s programming information is available on its website
(https://www.amctheatres.com/movie-theatres/columbus/amc-lennox-town-center-24), as well as financial reports of the entire theater chain. Financial information can also be found in other online resources (http://quicktake.morningstar.com/stocknet/secdocuments.aspx?symbol=amc).
These are all use references in analyzing AMC’s film programming strategies out of financial consideration.
3.3 Interview process
As I have repeatedly emphasized, film programming is a complicated behavior, with many factors to be considered. The challenge of film programming is to link these factors together with various resources and come up with optimal strategies. Thus, existing data are not enough to reflect this decision-making process. This is why I decided to directly interview the film programmers in both movie theaters. It is easy to filter who I want to interview at Gateway Film
Center. After talking with several staff members in the film center, I got to know that the chief programmer and president, Chris Hamel, is the only person who takes care of film programming.
As the president of the film center, he also manages the film center in every other aspect like daily operation, finance development, customer service and public relation, etc. I think no one else knows more about film programming and related information in GFC. The decision to interview the general manager of AMC Lennox is out of no choice. The general manager is not exactly the film programmer of AMC Lennox. The people who really make overall film programming decisions are in the film programming department of AMC’s headquarters.
However, the general manager has the discretion to adjust and practice the decisions from the
44 headquarters, in terms of screening schedule, screening room and building relationship with local customers. Even though the general manager only takes charges of partial duties as a film programmer, he is the only one in the movie theater who has a direct connection with film programming decisions and can adjust them based on the cinema’s condition. This is how and why I choose these two people as my interviewees.
Berg categorizes interviews into three types: the standardized (formal or structured) interview, the unstandardized (informal or nondirective) interview, and the semi-standardized (guided- semi-structured or focused) interview (2009). The major difference between these different interview structures is their degree of rigidity of presentation structure. The type of interview I choose is Semi-standardized Interview. Berg shows Semi-standardized Interview’s degree of formality as below:
● More or less structured.
●Questions may be recorded during the interview.
●Wording of questions flexible.
●Level of language may be adjusted.
●Interviewer may answer questions and make clarifications.
●Interviewer may add or delete probes to interview between subsequent subjects.
I choose Semi-standardized Interview for many reasons. The interview needs to be structured to make the interviewees get a sense of what this research is about and what I want to know from them. However, the wording of questions should be flexible since the two interviewees are of two different kinds of movie theaters. Questions are adjusted to fit their particular context. If I’m
45 not getting what I’m expecting from the interviewees, following questions might be asked to make clarifications. New questions might also be asked if new facts are discovered and new ideas are generated during the interview.
Interview questions have to be carefully designed so that I can get exactly what I want from the answers. Berg states researchers must take into consideration the central aims and focuses of their studies. The central aims and focuses of my study are to discover and then compare the film programming decisions and the rules of making the decisions in both movie theaters. The questions should then not only focus on film programming decisions themselves, but also other factors that have an influence on the decisions. This means that the triple bottom lines of film programming which has film programming related factors need to be covered in the interview questions. Moreover, the difference of two movie theaters in film programming needs to be reflected by questions. Berg also suggests a general sequencing of types of categories of questions:
1. Start with easy, nonthreatening (demographic) questions.
2. Next begin with some of the more important questions for the study topic (preferably not
the most sensitive questions) – the questions should stick to a single concept or topic.
3. More sensitive questions can follow (those related to the initiated topic).
4. Validating questions (questions restating important or sensitive questions, worded
differently than previously asked)
5. The next important topic or conceptual area of questions (these may include the more or
most sensitive questions).
46 6. Repeat step 3 and 4 and so on.
Based on above all, my interview questions are listed below.
INTERVIEW QUESTIONS FOR GATEWAY FILM CENTER PROGRAMMER
1. What are the factors that you care about when you make film programming decisions.
2. What are the rules that you make film programming decisions?
3. What challenges and opportunities do you see in film programming as a non- profit?
4. What limitations do you face as a non-profit movie theater?
5. How do you react to audiences’ feedback?
6. How do you react to the change of the industry?
7. What is the mission or GFC? How film programming could help with it?
8. What resources do you use in film programming?
47 INTERVIEW QUESTIONS FOR AMC LENNOX TOWN CENTER 24 PROGRAMMER
1.What are the factors that you care about when you make film programming decisions.
2. What are the rules that you make film programming decisions?
3. What challenges and opportunities do you see in film programming as a for- profit?
4. What limitations do you face as a for-profit movie theater?
5. How do you react to audiences’ feedback?
6. How do you react to the change of the industry?
7. What is the mission or AMC? How film programming could help with it?
8. What resources do you use in film programming?
The first question is a general one and relatively easy to answer. It doesn’t need to be deeply discussed, but rather set up a stage for what we are going to talk about during this interview. The triple bottom lines (content, audience, finance) will be mentioned and asked if the interviewees don’t mention each of the bottom lines. The second question is a following-up question to question 1, from what I try to discover how much the interviewees value the triple bottom lines and the relationship between them. Then question 3 and 4 lead the discussion into unique 48 features of the two movie theaters and differentiating from each other. The challenges, limitations, and opportunities are expected to be different for the two movie theaters. This difference is assumed to be caused by the differences in content, audience, and finance. Then the question will lead the discussion into thinking about the reaction to change of the industry, the relationship of film programming and the movie theater, and the use of local resource and local relationship building. From these questions, film programming is not only discussed as a whole, for its value to the movie theater and its influence to the audiences but also is split up into triple bottom lines to benefit the comparison. Film programming of the two movie theaters in the past, at present and in the future are also discussed because its strategy is subject to the context.
3.4 Scope and limitations
However, I am aware that there are limitations to this comparative case study. Every comparative study begins with some level of assumptions about comparability of the cases (Azarian, 2011) I believe the comparison of the two movie theaters I choose is meaningful, because the two movie theaters are based on similar communities, similar audiences, similar distance to OSU campus and similar popularity among campus area citizens as I observe. Yet, the validity of a comparative case study is still a problem for many researchers. Azarian (2011) questions the extent to what the researcher can penetrate into a different context and get deep insights into the context to compare two unfamiliar worlds. He believes that the researcher to conduct the comparison should have the ability to sensitively dive into the two worlds, go beneath the apparent similarities. With careful observation of the research question within two specific contexts, the comparison makes more sense.
49 As I introspect my research, I feel that comparing a non-profit movie theater and a commercial movie theater is meaningful. As I’ve mentioned, the film exhibition industry is facing serious competition from other media. AMC Lennox and GFC, with all similarities mentioned earlier, are competing with but also complement each other. The two movie theater with distinctive film programs captures local audiences to the largest extent. However, even though GFC is a large- scale non-profit and independent movie theater, but to be compared with AMC Lennox, there’s still an obvious gap in the number of screens. According to US Today’s list of 10 most checked- in arthouse theaters in 2013, GFC is listed as No. 10 in the country. Indie movie theaters, no matter how big they are, are still not comparable to theater chains in scale. This is the limitation that I have to go with.
50 Chapter 4. Film Programming in AMC Lennox Town Center 24
For more detailed information about film programming strategies in AMC theater chain, I interviewed the general manager of AMC Lennox Town Center 24 (AMC Lennox). Not to my surprise, as a branch of one of the biggest theater chain in the United States, the manager doesn’t have freedom in selecting what film to show. AMC theater chain has a film programming department that decides which films to show in which markets. Moreover, the manager has no control over product retention and product exit, which means that he cannot decide the time to drop off a movie.
Strictly speaking, the general manager of AMC Lennox is not actually a film programmer. The real film programmer is working in the headquarters, making uniform film programming decisions for all theaters in the chain. However, this doesn’t mean there are gaps between local managers and the film programming department. As a general manager of a local theater, he needs to understand the film programmers’ decisions and manage the movie theater according to them. An introduction of movie theater manager (study.com) states the duties of this position:
Movie theater managers lead theater employees and staff to ensure that the day-to-day functions of the theater are carried out efficiently. The manager sets work schedules so shifts are adequately staffed and all needed positions are covered, including workers for concessions, ticket counters, projection booths and custodial duties.
51 These duties seem to be not directly related to film programming. However, according to my interview with the general manager, he needs to do more than those, covering some of the film programmers’ duties. There are many factors that help film programmers in making programming decisions (CreativeContentAustralia), including:
What films are on offer from distributors and at what terms
The running times of films
How films are performing at cinema location
The particular tastes of audiences at a specific location
When the film programmers are programming in headquarters, some of these duties cannot be fulfilled without the help of local managers. Actually, local managers nowadays have certain discretion in film programming beyond their basic responsibilities. As a commercial theater chain, the primary mission of AMC theaters is to make more profits. Thus, many strategies are used to make more profits from the bottom (audiences) up (film programming). Movie theater management plays a critical role in the middle.
4.1 Wide release and limited release
Before talking about strategies he applies in managing the movie theater, the manager talks about distribution strategies of movies that managers should understand and follow. He mainly emphasized wide release and limited release. Wide release is a distribution strategy that distributors try to open the movie on as many screens as possible (Timelock Film ab) so that
52 people in every movie market can have access to it at the same time. Wide released films will stay in a large number of screens for about six weeks and then gradually go down according to its performance. This strategy is often applied to major studio movies and those with high reputations and expectations. Distributors are confident enough that a fair number of audiences will go to movie theaters for the movies.
Limited release is to screen the film in a few selected movie theaters, and if it goes well, the film will then be widely released in more cities (Timelock Film AB). This strategy is often applied to films that the distributor thinks might benefit from some word-of-mouth promotion. Or if the films are not meeting the distributor’s expectation, but he has contractual obligations with the producer to screen the film in certain numbers of screens in order to secure media exposure and revenues from ancillary markets. Many independent movies and movies that are targeting a small group of audiences are also using this strategy as a test before spending much more on marketing and promoting. If this limited release has successfully built a good reputation, then it will move to platforming distribution, which is to release the film in increased numbers of screens in steps
(usually two or three). There are also some other distribution strategies like wide-multiple, market by market release, art house release, and four-walling. Different strategies apply to different kind of films, usually according to their marketing expense and estimated performance.
53 Distribution Strategy introduction Suitable films strategies Wide Release Distributor tries to open on as many screens as possible, Studio movies with 1500-3000 screens covering all major markets. May cost estimated gross over $100 over $20 million. million Platforming 2-3 stages. Start small in about 10-50 screens, then 500+ Good quality movies which can benefit from good reviews Wide-multiple Hybrid between wide release and platforming. Movies that can be easily marketed, but lacks quality (e.g. good trailer, bad story) Limited First screen the film in a few selected movie theaters in Films that benefit from Release major cities, if it goes well then move to platforming word-of-mouth promotion, or in need of media exposure Market by With 20-40 copies, screen the movie in one area then Not to movies in the digital Market another. age of movie screening. Release Art House With 10 prints, only screen the movie in art houses. Movies that are going to the Release films festivals are in need of certain exposure and comments Table 2. Distribution strategies and suitable films for them.
Table made according to distribution strategies in Timelock Film AB. http://www.timelockfilm.se/artiklar/english-articles/distribution-strategies/
As the manager of a local movie theater, decisions cannot be made without considering the distribution strategies of the movies. If the manager is about to schedule a film which is wide released, he will understand that the distributor is confident to attract a strong audience with the movie, and the film programming department of the theater chain agree with it. Then he needs to schedule the film as many times as possible (but not at the same time), especially in golden hours
(around 7 pm to 8 pm). Limited released films should not be ignored because it is their first stage to build a reputation. No distributor wants to screen their films in the morning, even if he’s not
54 expecting too much from them. Certain times of screening and a certain number of attendance are guaranteed to meet the distribution contract.
Looking through all distribution strategies, I find that the core of distribution and marketing strategy is word-of-mouth. Distributors are confident to spend much money on a wide release is because the movie has already got a strong word-of-mouth reputation, possibly because it’s one of a reputed series or the trailers are very attractive. Distributors who are not expecting much from their films also count on word-of-mouth promotion from limited releases to make most profits from them. Thus, word-of-mouth reputation is an important indicator for movie theater managers to consider about a film’s screening schedule.
4.2 Type of films and showtime
In order to examine the details of how AMC Lennox program its movies, I gathered information from AMC Lennox’s website about the showtimes of movies. Based on the week of July 9th to
July 15th, I make the table below about genres of film programmed and the number of screenings of each genre.
55 AMC Lennox Programming Genres and Schedules 07/05/2018-07/11/2018
Number of films Number of screenings Average screening per film
Drama 8 179 22.4
Horror 2 64 32
Crime 3 72 24
Action 12 479 39.9
Adventure 8 373 46.6
Sci-fi 3 207 69
Animation 2 64 32
Comedy 6 195 32.5
Documentary 2 63 31.5
Thriller 3 36 12
Family 1 2 2
Fantasy 2 54 27
Music 1 28 28
Sport 1 35 35
Mystery 1 30 30
Biography 3 91 30.3
Romance 1 31 30
Total 59 2003 33.94
Table 3. Film genres programmed during July 9th to July 15th
56 As reflected by the table, action, adventure and sci-fi are the most frequently programmed and screened genres. During this week, “Ant-Man, the Wasp” is the most recently released
Hollywood blockbusters in movie theaters. It is scheduled as many times as the theater could accommodate, which is 17 to 18 screenings per day. Other movies that lie in the three popular genres are “Jurassic World: Fallen Kingdom”, “Deadpool 2” and “Avengers: Infinite War”.
These three movies are premiered on June or May, thus are facing a decline in cinema scheduling. However, they are still scheduled four to eight times a day, which is higher than most of other movies on show. These movies are all included in “High Concept” movie category mentioned in Chapter 2, that are estimated to be popular and successful in box office. The evidence is that they are all benefiting from the highest frequency of screening by AMC Lennox.
Family, music, sport, mystery, and romance are genres that least programmed in AMC Lennox during the week. There’s only one film for each and the screening numbers are all below 35.
Documentary, animation, fantasy and horror films have two of each genre screened. Films of these nine genres are all programmed fewer than five times a day. Even though they are all newly released, they have fewer programming numbers than high concept movies which are released after one or two months. The comparison reflects the nature of AMC Lennox’s programming as profit-oriented to some extent.
The average screening number per film is an indicator of the diversity of film programming. As we can see from the fourth column, most of the average numbers are not far from the total average 33.94. High concept genres are obviously higher than average, while thriller and family films are lower. However, the variation in the average screening number is much lower than the
57 actual screening number, proving that the variation in average screening number is evened by the number of films screened. This means that except for high concept genres, other genres have high screening number not because certain movies are shown more times, but rather more movies of this genre are shown. Even for high concept genres, their average screening numbers are not as many times higher than other genres as their actual screening numbers. This reflects
AMC’s film programming strategy as diverse programming rather than repeated programming.
There are also other facts that are not reflected by the table. First, film programs in each day of the week are exactly the same, except for two premiere events. This is evidence of that AMC
Lennox’s film programming are more fixed than flexible. Only schedules and numbers of screening vary in each day. Also, all movies being programmed are newly-released. The earliest ones are released as early as two months ago. This reflects that the programming of AMC
Lennox is highly depending on the movie market: programming options are only made among the newly released movies rather than old and classic movies.
Different time in a day is of different value for film screening. According to the manager, 7 pm to 8 pm is the most popular period for audiences to watch movies. At this time, there should be movies on each of the screens. However, in the morning, especially on weekdays, there are very few audiences in each screen. Even though AMC Lennox as a multiplex has more than twenty screens which are good enough to accommodate the many films at the same time, but the daytime still needs to be filled. I’ve checked the showtimes
(https://www.amctheatres.com/movie-theatres/columbus/amc-lennox-town-center-
24/showtimes/all/2018-06-16/amc-lennox-town-center-24/all) of the theater and find out that
58 screenings in the morning can be as early as 10 am. The theater is not expecting for audiences before 10 am in the morning. However, there is no obvious pattern of what films are shown in the day. Basically, any kind of film, no matter it’s a blockbuster or an independent film, will have a chance to screen in the morning. The difference lies in the frequency of screening.
Independent films and films targeting small groups can be shown as few as only one time per day (e.g. Superfly), while newly released blockbusters can be screened as many as eighteen times per day (e.g. Ant-Man and the Wasp).
During the time of low theater attendance (morning, late night or offseason), type of movies doesn’t matter a lot to the revenue. Even tickets of blockbusters do not sell well. The movie theater will then choose to screen more types of movies, which could be more attractive to audiences than blockbusters. Audiences of special interests will come to the theater for some films that are seldom shown in movie theaters.
Another major difference between types of films in screening is the size of the screen. In golden hours, all films regardless of types (major studio produced or independent) or genres, will be screened in different screens. The capacities of different screening rooms are different.
Generally, the more popular a film is, the bigger the screening room should be. This is because popular films (usually “high concept” films) are estimated to attract more audiences than others, thus need more seats in a screening. Usually, the most popular film is screened at the best time and on the best screen, because nowadays high concept movies are mostly of very advanced visual effect, and are made into options of formats (digital, 3D, IMAX 3D). There are also some exceptions to this strategy. If two screenings are next to each other, with some overlap in timing, it’s better to arrange one big screen and one small screen, for some audiences that prefer a more
59 private movie experience. The movie “Ant-Man and the Wasp” are being screened at the same time in four screens, opened at 8:10 pm, 8:55 pm, 9:10 pm and 10:10 pm. The screens for it are one Real 3D screen, one IMAX 3D screen, and two digital screens. For these high concept movies which are scheduled as many times as possible, there will always be a Real 3D screen, an
IMAX 3D screen, a big digital screen (meaning big screen and big screening room) and a smaller digital screen, these four options in golden hours. Audiences’ preferences are satisfied at most for high concept movies.
The genre is another factor that the manager takes into consideration when making scheduling decisions. Audiences of different genres have different movie-watching habits and even different lifestyles. For example, as the manager says, “horror films are better to be shown after 9 pm”.
There has been research studying what makes horror film fans like to watch horror films, proposing that sensation provided by these films and the feeling of being aroused by violence scenes (Edward, 1984, Zuckerman & Litle, 1986). However, this relationship between sensation and horror film preferences are proved to be weak (Tamborini & Stiff, 1987). Despite this, the preference of watching horror films at night is still considered to be correct by movie theater managers, thus horror films are often shown at night. According to the showtimes of the week in
AMC Lennox, all horror films and thriller films are guaranteed a late night screening (Superfly screened at 10:10 pm; Animal World screened at 9:45 pm; Hereditary screened at 10:20 pm, The
First Purge screened at 10:15 pm.
Other than screening horror and thriller films at late night, I also asked about other film genres and specific scheduling strategies. However, the manager said “the relationship between genre,
60 schedule, and attendance are very complicated. Only when we have pick just one time for a screening do we care about genre. However, in most cases, screening schedules are spread throughout a day.” The abundant resources owned by a commercial theater chain makes it insignificant to think about a particular time to screen certain genre of movies. Even in the morning time, when attendance is low, the strategy is to screen nearly all movies at one time rather than only screen certain movies to save resources. Thus film genre in AMC Lennox is not being paid much attention.
4.3 Targeting at specific audiences
AMC Lennox lies in Franklin County, OH and serves mainly to OSU campus area communities.
According to CreativeContent Australia, one duty of film programmers is to know the particular taste of audiences in a specific location. There is no public data about residents in the OSU campus area, so I’m using the demographics of Franklin County, OH instead.
61
Figure 15. Demographics of Franklin County, OH. Source: Census Reporter
As Figure 8 presents, the age range of frequent movie-goers is 18 to 39 years old. More than
32% of Franklin residents lie in this age range, indicating that Franklin county has great potential in movie theater consumption. About 14% of residents are considered minor in Race &
Ethnicity, with Asian and Hispanic as two major groups. Moreover, as a one of the two major movie theater near campus (the other is GFC), OSU students contribute a lot to the movie theater’s revenue. Thus, the demography of OSU students also needs to be considered.
62
Table 4. OSU student demographics
Source: OSU statistical summary (www.osu.edu)
As we can see from this table, there are 6,399 international students in Columbus campus.
Watching films in the movie theater is a popular way of entertainment among college students, and some courses in OSU even requires students for movie theater experiences. Thus, the group of international students at OSU is too big to ignore.
AMC is the only movie theater in Columbus that regularly shows newly released Chinese films.
It is the only place to go if students from China want to enjoy a new Chinese movie. The reason
63 why AMC Lennox screens Chinese movie is partly in that the theater chain is owned and operated by Wanda Group, a Chinese company. But the fact that the other two AMC theaters in
Columbus area, AMC Dine-in Easton Center 30 and AMC Dublin Village 18 are not regularly showing Chinese movies, the decision by AMC Lennox is likely to be localized.
Not only Chinese films, but many films from other foreign countries are also regularly screened at AMC Lennox. The aim is to serve the area of diverse cultural background, showing that AMC theater chain cares about different cultural groups, and also to make most profits with the foreign movies. After all, as an international student from China, I enjoy the convenience of watching
Chinese films at AMC Lennox. Every time I go there, there are a fair number of Chinese audiences watching Chinese movies. This Chinese movie experience is unique at AMC Lennox among all movie theaters in Columbus.
Knowing the audiences of the movie theater is a critical factor of good management. Age, gender, cultural backgrounds, socio-economic status, special interests, as well as their habits of life (the time to watch movies, the frequency of going to movie theaters) should all be mastered by a movie theater manager. As the theater manager said, “not only the audiences affect movie theater management and programming, in turn, movie theaters can cultivate audiences, and even change their habits. For example, if popular movies are often shown around 6 pm, a little earlier than the golden hours (7 pm – 8 pm), then after some time the habit of audiences going to movie theaters might slightly change.” However, this is the manager’s assumption and has not been tested. In fact, all popular movies (mostly high concept movies) are scheduled as many times as
64 possible to satisfy audiences of any time preference. There is hardly any chance that audiences have to change their schedule in order to watch a movie.
4.4 Ticket price and Concession
The manager didn’t talk a lot about the financial condition of AMC Lennox. Thus, I refer to the financial report of the AMC theater chain as a whole to analyze their financial strategies related to film programming.
For AMC Lennox, the ticket price varies across age groups and showtimes. I take a now showing movie, The Avengers: Infinite War, as an example. In a regular Wednesday, the ticket price of an
11:30 am screening is $5.29, same to Children of 2-12 years old and seniors of 60+. The ticket price of a 2:50 pm screening is $8.99 for adults, $7.49 for Children, and $7.49 for Seniors. For a
6:10 pm screening, the ticket price for the three different age groups are $10.49, $7.49, and
$8.99.
Ticket price to different age groups in different showtimes
11:30 am 2:50 pm 6:10 pm
Adult $5.29 $8.99 $10.49
Child (2 -12) $5.29 $7.49 $7.49
Senior (60+) $5.29 $7.49 $8.99
Table 5. Ticket price setup of Gateway Film Center
65 As we can see, $10.49 is the regular ticket price of a movie to adults during regular hours (time that most audiences tend to watch movies in a cinema). $5.29, a half price, is charged for screenings in the morning, regardless of age group. For afternoon showtimes, ticket prices vary across age groups. A price discrimination toward age is very common in many other industries.
Movie exhibition industry is very sensitive to time. Numbers of audiences vary greatly in a day.
A half price in the morning is the strategy to attract audiences, not those who are at work, but those who are not willing to watch movies in the morning at a regular price. This price discrimination strategy, along with the genre strategy in the morning that more diverse genres of films are shown, audiences are attracted to a great extent from home to the movie theater.
Another point that worth mentioning is that there is no price discrimination in different types
(genre, distribution, format) of films. A price discrimination toward type could be challenging to the movie theater owners, in terms of price setting. It will also be controversy when dealing with the ticket price with distributors. Audiences will also be confusing, and maybe also judge a film from the price. All these troubles are not what the movie theater managers want to deal with.
There is price discrimination across formats of screenings. For example, During golden hours, the ticket price for a digital screening of “Ant-Man and the Wasp” is $10.49 per adult, while the
Real 3D version costs $12.49, and the IMAX 3D version costs $13.99. Audiences that prefer 3D and IMAX visual effects are willing to pay the difference to enjoy the movie the way they like.
Aa Davis (2006) claims, lower admission fee leads to higher admission, then the concession sale will increase. Below is a part of the financial report of the AMC theater chain.
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Figure 16. AMC theater chain revenue report of 3/31/2018
Source: http://quicktake.morningstar.com/
The table shows the AMC’s revenue in the first season of 2018, and compare it with that of
2017. Revenue from food and beverage (or concession sales) is almost half of the admission fee
(or ticket price), meaning that on average, audiences purchases about half of the ticket price of food and beverage. Concession sales have a considerable impact on the total revenue of a movie theater. Further research on the estimation of the ratio between changes of admission fee and change of concession revenue would be meaningful for movie theater management, but also very challenging in controlling variables.
The membership of AMC theaters is called AMC Stubs. Benefits of joining AMC Stubs include
$5 ticket on Tuesdays, free popcorn refill, waived online ticket fees and points gained to be turned into rewards. Stubs Insider is the basic membership, and Stubs Premiere is the upgraded membership with more benefits but cost $15. The memberships make audiences more committed to AMC, and the points gained stimulates their tendency of movie consumption. In this way,
67 audiences’ habit of watching movies in movie theaters is also subtly cultivated by the memberships.
As the latest news shows, from June 28 AMC has rolled out its own MoviePass-style service
(Barnes, 2018). For $20 a month, subscribers to AMC Stubs A-List can see up to three movies a week. This is AMC’s respond to the decline of movie-goers in the past 25 years. Netflix, Spotify and Amazon Prime have trained people to watch movies online through memberships, which allows their subscribers to watch unlimited numbers of movies. With this new membership program, AMC hopes to attract audiences back to “real” movie theaters with more discount in prices. After all, there is a “theatrical release window”, which means that movies are released in movies theaters before they are released in online streams. Usually, movies are available on online streams one month later than their theatrical release (Huddleston, 2017). Thus, movie theaters are still the only choice for movie fans to watch movies early. AMC’s new membership will capture those movies fans who used to wait until online release because of the high ticket price.
As the manager said, “the way to deal with attendance decline is to do our job well.” As a local theater manager, he says he keeps working on providing audiences a comfortable environment, a pleasant experience, and a good service. Audiences come to the movie theater not only for the movies themselves, but also for the theater experience they cannot get by watching movies at home, like the visual and audio system, concession service, interaction with other audiences, and the comfortable seat. The manager believes that as long as the feeling and experience of watching movies in a movie theater and at home are different, there will always be enough
68 movie-goers. The movie theater also constantly renovates its seats and concessions to help increase ticket sales and provide a better experience to its audiences.
69 Chapter 5. Film programming in Gateway Film Center
In this chapter, I examine the film programming strategies in Gateway Film Center, in the same aspects as my analysis of AMC Lennox in Chapter 4: program choosing, audience targeting, and price discrimination. To get the most detailed and practical information about GFC, I interviewed the president Mr. Chris Hamel, who is also the chief programmer of the highly reputed independent and nonprofit movie theater. Mr. Hamel is the only person to do film programming in GFC, and also overview GFC’s customer and financial strategies.
5.1 Program choosing in GFC
The mission statement is very important to nonprofit organizations because it provides a framework for decision-making, influence over staff and volunteer motivation, and signals organizational legitimacy to stakeholders (Kirk, 2010). Film programming decisions in GFC are also greatly driven by its mission. Mr. Hamel states that the mission of GFC is to spread a sincere love of movies while also bring films which may not have been played here to our community (Gateway). He is on the lookout for a nice mix of the major studio, American independent, retro and world cinema, which means that he actively looks for and programs newly released Hollywood movies, independent films, old but classic American movies and movies from worldwide outside the Hollywood system. GFC devotes to provide diverse and abundant options of film programs to dig out and develop the movie taste of audiences in
Gateway district, and also prepare them places to share the similar tastes. Thus, fit to its mission is the basic rule of GFC’s film programming decision-making.
70
To further explain why GFC’s mission is a driver of film programming decisions, Mr. Hamel gave an example,
“If there are lots of great films that are still being made in the studio system, but there are lots of venues in our city that play commercial films. Even though we want to play commercial films as well, but sometimes we choose smaller titles that we think are of a high quality over those good studio films. Because if we don’t program the smaller titles, then they may not be played in
Columbus at all. So sometimes we’re making choices because we want to ensure that these great films from around the world make it to our community.”
It seems natural to understand why movie theaters want to play newly released commercial films. Many independent movie theaters choose not to screen commercial movies because they are still using 35mm film projector rather than digital projectors which are universally used by commercial movie theaters. While at present, newly released movies are mostly delivered by digital prints, which only cost $125, rather than 35mm print, which could cost $2000 (Susman,
2013). To convert from a 35mm projector to a digital film projector can cost $100,000 apiece, which is not affordable to many community-based, personally owned indie theaters. The exorbitant expenditure is the main reason why many indie theaters and art houses play independent or old movies. However, GFC has digital screening projector, 3D screening projector, as well as 35mm screening projector and 70mm screening projector, so GFC is able to screen digital films, 3D films as well as 35mm and 70mm films. As Mr. Hamel says, GFC aims at bringing films from worldwide to Gateway community. Many of these films, which are rarely
71 played in commercial movie theaters, are old movies or independent movies that are carried by
35mm and 70mm film prints. When we think about why GFC still keeps the traditional film projectors and not upgrading all of its projectors to digital, my guess is that there are two main reasons: firstly, with the 35mm and 70mm film projectors, many more old and independent films can be programmed, which is a good thing for GFC to fulfill its mission. While secondly, the cost of converting all projectors to digital is too much for GFC to afford. Even though GFC is relatively large in scale and popular in the community, it is still not comparable to commercial theater chains like AMC, in terms of scale, funding, and resource.
There are two major sources of GFC’s movie for screening: local distribution and film festivals.
Every month, there are 25 to 30 films on average being offered to Mr. Hamel, from local distributors. Some of the movies are newly released Hollywood films, some are nationally released films out of the Hollywood system, and others are internationally released films. But how does Mr. Hamel pick out the right films for GFC from these offers? As we mentioned before, the right films for GFC are those that fit GFC’s mission. One thing Mr. Hamel relies on when making film programming decisions is his knowledge and experience in film and film programming. He and his staff will screen the film in advance of public screening to evaluate the quality of the film, and estimate the audiences’ reactions to it. The second thing to rely on is the review. Mr. Hamel and the staff in GFC actively read a lot of magazines, watch a lot of programs that talk about films, in order to know the trend or interests of audiences from different cultural backgrounds. This wide-range and frequent review searching, plus Mr. Hamel’s interpretation to film and audience, make GFC unique in film programming and brought to GFC a Sundance award as one of the 23 best art houses on the continent. The Sundance Art House Project
72 winners, as claimed on Art House Convergence’s website, “meet high standards including quality programming, deep involvement with their local communities, strong financial standing, and recognition from their peers and their communities.” Programming is seen as the core of
Gateway Film Center by Mr. Hamel. It serves to the film center’s financial standing and community outreach, thus playing a fundamental role in the operation and image of GFC.
To more closely scrutinize the film programs in GFC, I gathered programming information from
July 9th to July 15th of 2018, in the Showtime section of GFC’s official website. The statistics of programming in this whole week will indicate some pattern of GFC’s programming choices so that we can check if it fits GFC’s mission.
Gateway Film Center Programming Genres and Schedules
Number of films Number of screenings Average screening per film
Drama 16 104 6.5
Horror 7 21 3
Crime 2 4 2
Action 2 47 23.5
Adventure 3 53 17.7
Sci-fi 6 73 12.2
Continued
Table 6. Film screening by genres in AMC Lennox Town Center 24 from 07/09/2018 to
07/15/2018
73
Table 6. Continued
Animation 4 61 15.25
Comedy 6 36 6
Western 1 10 10
Documentary 7 93 13.3
Thriller 2 21 10.5
Family 3 31 10.3
Fantasy 4 16 4
Music 2 33 16.5
Total 65 603 9.3
The first column is genres of films programmed in this week. It includes almost all genres of films, except for classic films, cult films, sexual – erotic films and silent films (Dirks). The second column shows the number of films of each genre screened during the week. Films of multiple genres are counted into each of its genres. The third column shows the number of screenings for each genre of films. The fourth column shows the average screening number of each film in the genres.
From the table, we can see that Drama is the most frequently programmed genre. Drama is a general film genre, which is often combined with other genres together. Besides drama, there are horror, sci-fi, comedy, and documentary that are frequently programmed. Drama, sci-fi,
74 animation, and documentary are most frequently screened films during the week. Crime and western are the least frequently programmed and screened film genre.
I mentioned in Chapter 2 about “high concept” films that many of these movies that earn good box-office are action, adventure, and fiction (sci-fi or kids-fiction) movies. During the week of the table, “Ant-Man and The Wasp” is the only high concept movie being screened in GFC. It is categorized as action, adventure and sci-fi genres. High concept movies have more secured attendance and box-office, so even though GFC aims at bringing in worldwide, diverse and rarely screened film programs, high concept movies are still those they make sell most tickets for. “Ant-Man and The Wasp” has more screenings than other films screened in the week. This could also be seen from the average screening numbers per film in high concept genres, which are higher than those of other genres. This means that high concept movies are less diversely programmed and more repeatedly screened. This is a result of GFC’s mission as diverse programming. Because of GFC’s limited resources of newly-released blockbusters, fewer blockbusters are shown more repeatedly, compared with other genres that cost GFC less in purchasing copyrights. Already owned movies, independent movies, old movies, and low-budget movies are thus more diversely programmed and don’t need to be screened as many times to break even.
The week is also in the middle of GFC’s Documentary Summer. As we can see from the table, documentary films have the most programming and secondary screening chances. This phenomenon is rarely seen in any commercial movie theaters. Oxford English Dictionary defines documentary film as “nonfictional motion picture intended to document some aspect of reality,
75 primarily for the purposes of instruction, education, or maintaining a historical record.” The screening of documentary films coincides with GFC’s mission as educating audiences and maintain records of films.
Crime films are programmed and screened less than any other genre. On the contrary, animation films are very often screened and programmed only subject to drama and high concept genres.
Children are one major group of audiences of GFC. This also reflects on the schedule of animation films: always throughout the day, from morning to evening. This is distinctive from the schedule of animation films in AMC Lennox. My guess is that crime films are less screened also because of the number of GFC’s children audiences. Children are thus protected from content they don’t like or need, and are provided with programs they like. Other than animation films, other genres of films are scheduled in a similar pattern throughout a day: horror films are screened mostly in late night after 9:30 pm; documentary and other less popular movies (old movies) are screened in the morning or before 5 pm. High concept movies are not only screened the whole day but also have guaranteed golden-hour screenings. These are rules for scheduling screenings for both nonprofit and commercial movie theaters.
From film programs shown during the week, we can see how GFC is making effort to bring in a nice mix of the major studio, American independent, retro and world cinema. There are not only blockbusters like Ant-man and the Wasp and Jurassic World: Fallen Kingdom, but also
American independent movies like Three Identical Strangers and Hereditary, retro movies like A
Clockwork Orange (1971) and Jumanji (1995), and world cinema like Angels Wear White
(China) and Fireworks (Japan). The mix of these four types of movies provides GFC’s audiences more options than only newly released Hollywood movies, but also benefit the film
76 center itself in repetitive use of resources and some relatively low-cost copyrights compared with new Hollywood blockbusters.
5.2 Audience development through partnerships
The biggest challenge GFC is facing, as Mr. Hamel says, is finding audiences for all movies
GFC collects. This means that GFC is not simply programming films that fit the tastes of its current audiences. Three other explanations are hidden behind Mr. Hamel’s statement: 1. GFC is cultivating the taste to film among its audiences. 2. GFC is constantly expanding its audience base. 3. Some films GFC programs do not attract as many audiences as GFC expects. These three explanations reveal key factors in the development of GFC’s audience and strategies related to them.
An example of how GFC is trying to cultivating its audiences’ film taste is the World Cinema program. From June 1st, 2018, GFC has at least one world cinema title playing every day.
Movies from the globe, screened in advance to GFC staff and considered of high quality, are screened in the big screen of GFC. This program is made possible by a partnership with Puffin
Foundation West, Ltd, which is an organization that provides grants to artistic activists and arts organizations often excluded from mainstream opportunities due to race, gender, or social philosophy (puffinwest.org-mission-statement). The mission of GFC, which is to bring in movies of high quality but are rarely screened in Columbus, coincides with the mission of Puffin
Foundation West, Ltd. Such partnerships between GFC and other local organizations are common so that GFC can benefit from shared resources and funding. Other educational programs like Hitchcocktober, Documentary Summer, Academy Awards Screening, etc. are not
77 aiming at profits or simply entertainment, but rather educate the audiences to some extent and cultivate their preference of high-quality but less popular movies. Of course, for many of these films, the film center cannot find many audiences to them. The development of the audiences’ taste is a long process which needs time to prove if it is working.
The partnership is a major way of GFC to develop its audiences. Mr. Hamel describes Columbus as “very open-minded” that people not only love art and the community but also are willing to work together. Through partnerships with other nonprofit organizations and community-based organizations, GFC has built a large network of programs, resources, funding, and audiences. For example, when I was doing an internship at the McConnell Art Center, which is an art center of gallery art, theater performance, dance and art camps, etc., I got to know that many of its programs are through the partnership with GFC. Movies are brought from the film center to the art center, like Hitchcock’s famous films screened during Hitchcocktober (GFC’s October events of screening Hitchcock’s reputed films), usually for free. Children students in McConnell Art
Center then get to know about GFC and its many events for children. Also through GFC’s partnership with Columbus Metropolitan Library (CML), free movies which are adapted from books, are brought from GFC to CML. “Gateway Film Center has a long tradition of uniting the community through accessible events and inclusive programming,” said Mr. Hamel, “from book to film aligns the film center with a great strategic partner (CML) and helps make the central
Ohio community a better place to live.” (www. columbuslibrary.org) This is a good example showing how GFC is making good use of its programs as a promotion tool. GFC has partnered with many organizations in Columbus, like film study department of the Ohio State University,
Wexner Center for the Arts, Svedka Imported Vodka, etc. Through such partnerships, GFC
78 expands its local impact to potential audiences and benefit from resourcing sponsoring and sharing. Also, the performance of these free screening through partnerships gives feedback to
GFC to adjust its programming.
Other than partnerships, GFC also uses traditional promoting tools, like marketing, public relation, and advertising. However, these traditional promotions cost much more than sharing resources through partnerships. As a nonprofit, GFC doesn’t spend a lot of its money on traditional promotions. In-theater advertising and promotion through partnerships are the major promotion means of GFC to reach to potential audiences. Because of GFC’s good reputation in the campus area, GFC is largely promoted by word-of-mouth promotion among students, faculty and their family members and friends. The unique programs and discounted tickets attract audiences from all over Columbus. Like Columbus’s annual firework displays on Independence day that draw audiences from all Columbus areas, audiences are willing to drive a long way to enjoy special programs in GFC. For example, at the last Saturday of every month, GFC offers children-friendly short films from all over the world, for free. Parents from everywhere in
Columbus bring their children to GFC, to enjoy the free movie and interactions with other children and parents. The children’s film programs also expose parents to the movie theater environment, so that they may get interested in some movies by watching trailers and flyers. The movie-going interest of both children and parents are stimulated by this Children’s program.
5.3 Financial challenges and strategies
79 Mr. Hamel took charge of Gateway Film Center since 2008, and then in 2011, the for-profit
Gateway Film Center transited to a nonprofit indie movie theater. One major reason for this transition is out of financial considerations. The Internal Revenue Service of United States proclaimed in writing that “organizations described in section 501(c) (3) are commonly referred to as charitable organizations, …, are eligible to receive tax-deductible contributions in accordance with Code section 170.” After its transition, GFC received funding and assistance from private donors, who are mostly movie fans, as well as other organizations, like the Ohio
State University, and in return, these donors benefit from tax deductions.
By becoming a nonprofit, GFC not only has more sources of funding, but also build up partnerships with other nonprofit, and community-based organizations. For example, Gateway
Film Center closely work with the Ohio State University. GFC benefits from the audience base from OSU students, while in return provide movie vouchers at only $3. The stand in Ohio Union to sell the movie vouchers is also a promotion of GFC, and words spread fast so that OSU students soon get to know that they can get low-price tickets for GFC movies. Moreover, GFC also benefits from rents by OSU, when some OSU events are held in an auditorium in GFC.
Such partnerships are common between GFC and other nonprofit and community-based organizations. Not only audiences are developed, but also consumption is stimulated and resources are shared. Mr. Hamel calls this financial win-win.
The biggest limitation for GFC today, as Mr. Hamel says, is the number of screens. As stated in
GFC’s mission, a good mix of movies should be brought to the community, and screening all these movies need enough screens. Currently, GFC has 8 screens, six of which are digital
80 screens. This is far from enough because GFC wants to show as many unique programs to the audiences as possible. According to statistics in National Association of Theatre Owners, there were 40,246 screens in total in the US by the end of 2017. 39,651 screens are of indoor theaters, and the other 595 screens are of drive-in theaters. According to the number of cinema sites in US figure in Chapter 1, there were 5747 movie theaters in total by the end of 2017. A simple math is that the number of movie theaters(NM) times the average screen number of each movie theaters(AN) equals the total screen number(TN).
NM x AN = TN
AN=TN/NM=40246/5747 ≈7
The average number of screens of each movie theater is 7. GFC is slightly above average.
However, drive-in theaters have only one screen, and art houses and many other nonprofit and independent movie theaters have fewer than three screens. AMC Lennox has over 25 screens being used. This huge difference in screen numbers leads to the difference in program numbers.
Even though GFC has been doing its best to program more movies, the lack of screening resources makes it impossible to compare with commercial theaters.
An example of a typical nonprofit and independent movie theater is Drexel Theater, which used to have one screen and then converted to a three-screen theater in 1991. The fact is that it has been almost 30 years past the conversion, the theater still has only three screens. The reason for this might be complicated, but the financial condition should be one of the factors. During my interview with Mr. Hamel, I could feel how eager he was to have more screens to show his programs. As a nonprofit, GFC benefits from more resources of funding and resources, but also has limitations in spending the money.
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Figure 17. Revenue and expenses report of Gateway Film Center. Source: Guidestar
This figure is a general report of GFC’s revenue and expenses in the fiscal year 2016. As we can see, $231, 106 of the revenue are gained from contributions, grants, and gifts, while $2,597,150 are gained from program services, which is mainly box-office and membership subscription fee.
One thing that worth mentioning here is that concession sales are included in program services in both revenue and expenses. Even though GFC doesn’t aim at making lots of profit from concessions sales, food and drinks are important to audiences’ theater experience. The exact amount of revenue generated by concessions sales is not provided nor could be found anywhere.
However, as a 501(c)3 nonprofit organization, this revenue should be spent on future program services and management of the organization. Thus, concessions sales in GFC is not simply to
82 make a profit but as a necessary element of theater experience and resource of revenue for future services and management.
As stated in IRS’s requirements to 501(c)(3) organizations, “the organization must not be organized or operated for the benefit of private interests, and no part of section 501(c)(3) organization’s net earnings may inure to the benefit of any private shareholder or individual.”
This means that the profits made by nonprofits should be invested back into the nonprofits for better programming or administration. GFC’s total expense for the fiscal year 2016 is
$2.962,625, a little over its revenue which is $2,828,256 and is all spent on program services and administration. I remember Prof. Wyszomirski in her arts policy class talked about nonprofits maintaining a slight financial deficit is a way to prove a good use of grants and the need for more grants. In this way, GFC is doing a decent job in making good use of its grants and profits. Then why doesn’t GFC purchase more screens to program more selected movies? I mentioned before that buying a new digital projector and screen costs about $100,000, which seems to be affordable compared with GFC’s annual expense. However, according to Mr. Hamel, inviting a new screen to the film center is not only the matter of a projector and screen, a new room and seats also cost much. Since GFC is maintaining a financial deficit every year, there’s no spare money to invite a new screen. The new screen may be made possible if new grants become available.
Similar to other movie theaters, GFC also has its price discrimination policies toward age groups, screening time during a day, and Tuesday discounts. Ticket price for different screening formats may also vary in the range of 2 to 3 dollars. Below is a table of more detailed ticket price information in GFC.
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GFC ticket price by screening time
Before noon Noon – 5 pm 5 pm – 11pm After 11 pm
$5 $9 $10.75 $5
Table 7. GFC ticket price by screening time
The pricing by screening time is a way of attracting audiences with discounted tickets in less popular times. 5 pm to 11 pm are golden hours for GFC based on Mr. Hamel’s experience. Half price before noon and after 11 pm are good deals for audiences that have flexible schedules or doesn’t care much about the screening time.
Super Tuesday at GFC provides discounted tickets at the price of $5 all day plus a free popcorn.
Tickets for movies in different screening formats are at also different prices.
GFC ticket price by screening formats
35mm Screening 70mm screening 3D screening Stage and Screen
$12 $15 Regular price + $3 $20
Table 8. GFC ticket price by screening formats
84 The reason why tickets for these special formats are more expensive is that the cost of 35mm prints and 70mm prints are more expensive than digital prints. 3D movies cost more when the movie theater purchase the movie from distributors. Some movies screened in GFC also have performers performing on stage, so an extra fee is paid for the live performance.
One thing that needs much attention is GFC’s ticket discounts through partnerships. GFC provide discounted movie tickets to its partners at the price of $7.50. This price is not only provided to Children under 12, students, military, senior citizens, but also OSU faculty and Staff,
Wexner Center Members, Small Business Beanstalk Cardholders. These organizations all work closely with GFC. For example, I took a class in film study program at OSU, and I was then eligible for discounted tickets at GFC as cheap as $2. Other OSU students who haven’t taken a class in film study can also buy GFC tickets at the price of $5, which is cheaper than the price for students of other schools. The special discounts to OSU is a way of GFC’s cooperating with or paying back to OSU since GFC benefits from the promotions and audiences from OSU through partnerships.
Besides, GFC pays much attention to ticket subscription. There are three levels of memberships provided:
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Gateway Film Center Membership Levels
Solo Unlimited movies, popcorn, special events, advanced $29.95
screenings, restaurant discounts
Duet (for two people) Unlimited movies, popcorn, special events, advanced $44.95
screenings, restaurant discounts
Student Unlimited movies, popcorn, special events, advanced $24.95
screenings, restaurant discounts
Table 9. GFC membership levels
Even though there are three levels of membership, the difference only lies in the price. Though, a duet membership for two is much cheaper than doubling the price of solo membership. We can see the efforts GFC makes to keep its customers. Students also benefit from a discount in purchasing a membership, which is very thoughtful and leaves good impressions to diversified customers.
86 Chapter 6. Comparing AMC Lennox and GFC
In this chapter, I am putting AMC Lennox and GFC together, and compare every aspect mentioned in previous chapters, including duties and powers of AMC Lennox’s manager and
GFC’s programmer; program choices; audience development; and financial concerns and practices. The last three indicators are the Triple Bottom Lines of film programming that impact the film programming strategy in different phases. By this comparison, I want to provide useful references to film programmers in both commercial and nonprofit movie theaters, about what programs their movie theaters lack, what aspects do they care most and least, and what could they do to perfect their film programming to deal with the decline of movie theater attendance.
The model will also be a useful reference to new movie theaters which are still unsure of going nonprofit or commercial path.
6.1 Duty of AMC Lennox’s manager and GFC’s programmer
The comparison between AMC Lennox’s manager and GFC’s programmer is unfair but necessary. It is unfair because GFC’s programmer is also the president of the movie theater, while AMC Lennox’s manager is not the programmer. The programmers of AMC are in the film programming department of AMC’s headquarters. The reason why this comparison is necessary is that film programming, as proved by this study, is a very complicated work that has many duties to be covered. The duties of AMC Lennox’s manager and GFC’s programmer overlap in many ways. GFC’s programmer Chris Hamel has many duties as the president beyond the film programmer. However, they are the people that have first-hand information about their theaters,
87 the screening, and the audiences. Either they are making decisions right away (GFC) or have to report to superior co-workers in the chain (AMC Lennox), they are making differences in the practices of film programming strategies. The more detailed comparison information is listed in the table below.
AMC Lennox Duties within film programming GFC programmer manager
N Choosing film programs for audiences Y
Y Scheduling film screenings Y
Y Knowing the audience and set up strategies Y
Y Building customer relations Y
Y Financing, budgeting, and marketing Y
Table 10. Duties of the interviewees
Being the president of an independent movie theater means that Mr. Chris Hamel has an influence on everything within the organization. He has full freedom to purchase, program, schedule, and market any movie he thinks is fit to the mission of GFC. Challenges or limitations of his work comes from the limitations that go with a “nonprofit” organization, that the using of profits is limited, and even though there are more funding sources as a nonprofit, the amount of funding is limited, as a result, resources are limited. As for AMC Lennox, the manager certainly doesn’t have that many power and control to the movie theater. Program choices are made by
88 film programmers in the film programming department of the chain. Even though he can schedule the movies according to the theater’s operation, resources, and audiences’ preferences, the certain number of screening each film is managed by the chain. But the manager knows better about his customers than anyone else in the theater chain. The accurate schedules are made by him with the discretion to adjust them. He builds the customer relationship in person, knowing their needs and complains, and then report to the chain. In this way, the theater manager has an influence on programming and pricing. Compared with the film programmer/president of
GFC, the manager is much more limited in making programming decisions. However, within this limitation, he has much more space to play with as a manager of a commercial movie theater.
Resources are abundant, including screens, theater rooms, human resources, promotion funding.
He can screen a popular and profitable movie as many time as he can in a day to make more profits. Any necessary marketing approaches are supported by the chain to reach to specific or more audiences.
A comparison of the duties of AMC Lennox’s manager and GFC’s programmer/president is meaningful to the definition of a film programmer. Through my study of the two people who are in charge of first-hand film programming decisions in two kinds of movie theaters, I think a film programmer is a person who chooses film programs for their audiences, makes detailed screening schedules, knowing and building relationship with his audiences, maintaining and sustaining the programming in terms of financing and budgeting, and market to reach to his audiences. Again, my definition of film programming is not aimed at deciding if a person is a film programmer or not. On the contrary, I think anyone who’s involved in any of the five duties
89 is having an influence or making contributions to film programming in his movie theater, that should be regarded as a member of the film programmers’ group.
6.2 First Bottom Line – Content (Program)
The content model in my analytical framework serves as the model of analyzing “Content” or
“Program” in film programming of the two movie theaters. First of all, artistic quality is valued at most in GFC because of their mission. Good artistic quality for GFC and Mr. Chris Hamel is
“diversified and worldwide”. Environment, which is the theater’s “hardware” as audio, visual, seating system and “software” as audience interaction, is considered highly by GFC. However, even though audience interaction is largely stimulated, “hardware” development is restricted by funding and resources, such as lacking screens, seats and IMAX screen.
The model below shows the process of how a movie exhibition generates social impact. Movies of good “artistic quality” displayed in advanced “theatrical environment” is the “theatrical experience” gained by audiences. “Theatrical experience” interpreted by consumers’ “personal experience and taste” generates the artistic value gained by each consumer. Combining artistic values gained by every audience together produces the social impact of the movie. This social impact could be the impact of the whole movie-watching experience to its audiences and community or to the movie theaters. To the audiences, they get entertained by this experience, and may also get educated or emotionally touched. While to the movie theater, the opinions of the audiences to this theater experience build the reputation of the movie theater, either on its artistic quality of programming or comfortable theater environment. The community also
90 benefits from the good film programs and attracts people to visit with the movie theater’s high reputation.
The content model of AMC Lennox is almost the same as that of GFC. The difference lies in their focus in the model. In GFC, the artistic quality of film programs is valued at most and has helped GFC build a national reputation for good film programming and contributing community development. On the contrary, the theatrical environment and audio/visual technology of AMC
Lennox are cutting-edge, which provide audiences with luxury theatrical experience. AMC
Lennox’s social impact is mainly entertaining its audiences with top-class special effects as well as a comfortable and modern theater experience. Its contribution to the community is not a major concern.
Movies displayed by the two movie theaters are the most obvious and direct reflection of their distinctions in film programming. Below are two charts showing the differences between two movie theaters in the number of movies screened and the number of screening of each genre.
91 Number of genre movies screened in AMC Lennox and GFC
18 16 14 12 10 8 6 4 2 0
AMC Lennox GFC
Figure 18. Numbers of genre movies screened in AMC Lennox and GFC
During the week of July 9th to July 15th of 2018, there are 20 movies exhibited by AMC Lennox in total, while GFC exhibited 26 different movies. AMC Lennox is screening the same movies every day during the week. GFC shows more movies than AMC Lennox (26 to 20) on much fewer screens (8 to 25). From the chart above we can see AMC Lennox is showing action and adventure movies more than any other genres. More action and adventure movies are shown in
AMC Lennox than GFC.
92 Numbers of screenings of genres in AMC Lennox and GFC
600 500 400 300 200 100 0
AMC Lennox GFC
Figure 19. Numbers of Screenings of genres in AMC Lennox and GFC
From this chart, we can see the difference more clearly. AMC Lennox exceeds GFC in the number of screenings (1814 to 603), nearly three times. This matches the difference in screen numbers of the two movie theaters (25 to 8), also nearly three times. Action, adventure, and sci- fi, which are considered as genres of “high concept” movies, dominate the screening in AMC
Lennox. Many movies of different genres can be also categorized into drama, so it is kind of general and not taking part in the comparison. There is no screening of sport, mystery, biography and romance movies in GFC during the week, while AMC shows a fair number of them.
While AMC Lennox is mainly screening “high concept” movies, GFC’s film programming looks even on different genres. The screening of documentary and drama are even more than high
93 concept movies. Family and animation movies are also of a decent frequency, showing that
GFC’s attention to children audiences. As I mentioned in Chapter 5, GFC aims at bringing in a nice mix of the major studio, American independent, retro and world cinema. Based on the week’s program information, I made a table to sort programmed movies into these four categories.
Movie Name Major Studio American Retro World Cinema Independent A Clockwork Orange x A Nightmare on Elm x Street A Quiet Place x American Animals x Angels Wear White x Animal House Ant-Man and The Wasp x Attack on Titan Season 3 x Damsel x Dr. Strangelove x Eating Animals x Fireworks x Fright Club: Peeping x Tom Gabriel and the x Mountain Hearts Beat Loud x Hereditary x Incredibles 2 x Jumanji x Jurassic World: Fallen x Kingdom Leave No Trace x Muse: Drones World x Tour Paperhouse x x RBG x Sorry to Bother You x The Devils Doorway x
Continued
Table 11. Films screened in GFC by categories from 07/09/2018 to 07/15/2018 94
Table 11. Continued.
Three Identical Strangers x Westwood: Punk, Icon, x Activist Whitney x Woman Walks Ahead x Willy Wonka and the x Chocolate Wont You Be My x Neighbor Yellow Submarine x
A total of 32 movies are programmed during this week. Major studio movies mean newly- released movies are produced and distributed by Hollywood major studios. American
Independent means movies are produced and distributed in the US but outside Hollywood major studios. Retro means movies are not newly-released. World Cinema means the production country of the movie is outside the US. During the observed week, 4 movies are major studio movies, 11 movies are American Independent, 6 movies are Retro, and 11 movies are World
Cinema. This pattern of film programs shows that GFC’s film programming is corresponding to its mission.
Movies that AMC Lennox programmed are all newly released movies. Among all programmed
19 movies, only two of them are world cinema: Sanju (India) and Animal World (China). All other 17 movies are either American major studio movies or independent movies. It is unfair to judge AMC Lennox and GFC’s film programming with the four categories since AMC Lennox is not mission-driving and has never stated to program according to the four categories.
However, we can see the efforts AMC Lennox consistently makes: showing foreign movies
95 regularly. Based on my personal experience, AMC Lennox is the only option for Chinese cinephiles in the Columbus area to watch newly released Chinese movies.
From this comparison, I think AMC Lennox’s film programming is more profit-driven. A high rate of screening high concept movies with a simple story and spectacular effects attracts more audiences thus generate more profit. Audiences come to the movie theater, not for the artistic quality of the movies, but rather enjoy the advanced screening equipment in the theatrical environment. GFC’s film programming is mission-driving. Diversified genres of movies are programmed for the benefit of different groups of audiences. These two film programming strategies complement each other and together provide multiple movie-watching options to
Columbus cinephiles.
Figure 20. Content choosing model for film programming 96 6.3 Second Bottom Line – Audience
The differences in audience pattern of both movie theaters reflect the differences in their audience development strategies. AMC Lennox as a commercial movie theater with highly advanced audio and visual system (it has the only IMAX screen in campus area), attracts all kinds of audiences from the campus area. Based on my personal experience, every time I go there, there are many OSU students, and audiences there look young, mostly under the age of 40.
But I don’t see children audiences a lot in AMC Lennox. On the contrary, GFC draws a lot of children audiences (with their parents), especially on weekends. GFC’s partnerships and student discounts also attract a good proportion of students. A pattern of GFC’s audience is that it varies a lot in different time. Different groups of audiences come to GFC for special programs. For example, there are more children and parents on weekends for “free family hours”. During the documentary week or Academy Awards screening, there are more students and even OSU faculty in the film center.
The audience development model appears to be applicable to both AMC Lennox and GFC.
Again, the difference between the two movie theaters according to the model is that they focus on each process to different extents. As Mr. Hamel said, finding audiences is a challenge for
GFC. Traditional promotions cost too much, so GFC is mainly promoted through partnerships and word-of-mouth promotion. AMC mainly relies on traditional promotions. Mr. Hamel claims that GFC tries hard to program worldwide movies to benefit diversified audiences. AMC also screens movies of foreign languages but less frequently if compared with GFC. Both of the movie theaters have their unique ticket subscription system to cultivate audience retention.
Influencing audiences has been an indicator of GFC’s program choosing decisions, but it is not
97 urgent in its agenda yet. Influencing could mean educating audiences by carefully selected film programs or cultivate audiences’ movie-going habits. The process of GFC’s programming and audience strategy is to find film programs of good quality first, and then find audiences for these programs. This shows that when making programming decisions, Mr. Hamel is not certain about how many audiences are going to like the programs. It is possible that some film programs that are considered to be of good artistic quality don’t attract as many audiences as expected. On the other hand, AMC Lennox doesn’t have this trouble. Since the commercial movie theater is profit-driven, and profits are from ticket and concessions sales to audiences, so all AMC’s audience strategy is to attract as many audiences as possible. With abundant resources and relatively fixed programming, AMC aims at providing convenience to audiences so that they can enjoy movies of their preferred format at their preferred time.
Audience developing strategies of the two movie theaters are distinctive. GFC focuses on developing audiences of various culture or movie taste, while AMC Lennox aims at providing mainstream audiences (audiences of newly released Hollywood blockbusters or some popular
American independent movies) various options of schedules and formats. So GFC attracts audiences by diverse film programs, and AMC Lennox attracts audiences with diverse options to watch films. The distinctive audience development strategies make the relationship of the two movie theaters less competitive and more complementary, so that audience in OSU campus area can have more flexibility in choosing the film programs, their formats and the time to watch the films.
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Figure 21. Audience development model for film programming
6.4 Third Bottom Line – Finance
This original finance model is basically applicable to both movie theaters. The circle of information gathering, decision making, action conducting (implementation), and then feedback information, is the typical decision-making process. Budgeting, marketing, and pricing are the three stages reflecting the movie theater’s financial conditions and strategies. The differences between the two movie theaters according to this model are the budget status and marketing approaches. GFC as a nonprofit and independent movie theater of high national reputation is
99 better in budget status than many other independent movie theaters. This can be seen from its screen numbers (eight), diversified programs, annual budget and expenditure. However, as Mr.
Hamel admitted, GFC is not comparable with commercial movie theaters like AMC in terms of budgeting and expenditure. GFC’s limited budget restricts the expanding of GFC in screening capability and programming diversity. Moreover, the sources of their budgets are different. For
GFC, more than 90% of the budget comes from program service (including concessions sales).
The exact amount of concessions sales or its proportion to the budget is unknown. The other less than 10% comes from grants and donations. As a 501(c)(3), its tax deductibility attracts donors to make contributions. However, the budget from grants and donations is still a relatively small proportion. For AMC Lennox, about 30% of its revenue comes from concessions sales, while the rest is mostly admission fee (ticket sales). It makes me hard to compare the budget sources and indicate finance strategies since GFC’s concessions sales information is unknown. What we know is that no matter where the budget comes from, as a 501(c)3 nonprofit organization GFC has to spend all its revenue on future program service and administration. On the contrary, AMC as a commercial theater chain has full freedom to use its revenue.
Marketing by GFC is mostly through partnerships with other local organizations. Traditional promotions only take a very small proportion (4%) of GFC’s total budget. As a commercial movie theater, there is no evidence of any partnership between AMC and any other local organizations. Marketing and promotion are done in traditional ways (advertisement, website).
Both of the movie theaters use levels of price discrimination strategies. The difference in pricing of the two movie theaters is subtle because, in movie exhibition industry which is a highly competitive market, the ticket pricing of different movie theaters tends to be stable in the long
100 run. However, GFC provides low-price or even free tickets through partnerships, which is also a good marketing approach to attract new customers. For OSU students, the ticket to GFC could be
50% to 80% off compared with AMC Lennox’s 10% to 20%.
Figure 22. Financial management model for film programming
101 6.5 Combining the triple bottom lines into a film programming system
Figure 23. Triple-bottom-line model for film programming 102 This Triple Bottom Line model for film programming, which is adapted from Wyszormirski’s
Triple Bottom Line for nonprofit arts organizations (2013), is a dynamic operation and analytical system for both nonprofit movie theaters and commercial theater chains. Differences in strategies are marked in different colors.
Budgeting in finance bottom line works as the starting point of the system. In one way, budgeting decides the movie theater to go into a nonprofit path or a commercial path. GFC’s budget mainly comes from box-office and grants or donations. With a limited budget, it goes into the nonprofit path. Then it becomes mission-driven and focuses on artistic quality of its programs. A mixed programming of major studio productions, American independent, retro and
World cinemas make up its programming diversity. AMC’s budget comes from box-office and concessions sales. With enough budget, it goes into the commercial path and focuses on the development of the theatrical environment. Only newly released movies are programmed by
AMC Lennox. The artistic quality of film programs displayed in the theatrical environment is received and interpreted by audiences. The social impact includes the impact on audiences, on the community and on the reputation of the movie theater. GFC attracts audiences by its high- quality and diverse programs, while AMC attracts audiences by its cutting-edge theatrical technology.
In another way, budgeting decides the organization’s capability of marketing and marketing approaches. Marketing by GFC is mainly through partnerships. This marketing tactic is low-cost and relies on word-of-mouth promotion. AMC Lennox spends much of its budget on traditional promotions. The reputation of the movie theaters in programming and theater experience attracts
103 new audiences through marketing efforts. Both of the two movie theaters have programs targeting at special groups of audiences. Even though pricing is affected by the budget status of the movie theater, and is also a tool of marketing, the standard ticket price is highly uniform within film exhibition industry. Both movie theaters have price discrimination strategies. AMC has its membership AMC Stubs and is going to develop its own Moviepass, while GFC also provides low-price and free tickets through partnerships.
104 Conclusion
This paper carefully examines the film programming of Gateway Film Center and AMC Lennox and focuses on three domains that are directly related to film programming – content choice, audience development and financial status. AMC theater chain is the largest theater chain in the
North American film market, and AMC Lennox Town Center 24 is a popular movie theater with advanced theatrical technology near OSU main campus. If a comparison between nonprofit movie theaters and commercial movie theaters need to be done, then the nonprofit movie theater has to be a successful, popular, and financially sustainable one. Gateway Film Center is a famous
Sundance awarded nonprofit and independent movie theater. GFC actively partners with other organizations and has built a good relationship with its customers, donors, and partners. AMC
Lennox and GFC are two movie theaters near OSU main campus area, so that the comparison is more convincing and better controlled, in terms of the distance to campus, transportation, community and audience base, and socio-economic status of their potential audiences. These two movies theaters become successful in fierce competition with their rival movie theaters and is facing competition with online streams which has influenced a decline in theater attendance.
What do they do to keep themselves competitive?
Wyszomirski’s Triple Bottom Line (2013) for nonprofit arts organizations is a very well established and convincing model of how cultural policies influence nonprofit arts organizations.
Financial sustainability, artistic vitality, and public value are the standards of judging a nonprofit arts organization’s value and success. Based on my knowledge and experience in film programming in China, and my review of literature, I understand film programming as a
105 complex behavior that includes content selecting, audience development, and financial strategies, thus these three become my adapted triple bottom line for film programming. Within each bottom line, there is a dynamic system which is supported by previous researches. The study itself is not only a demonstration of this model’s applicability to both nonprofit and commercial movie theaters but also an exploration of the relationship among these three triple bottom lines.
In Chapter 4 and 5, from interviews and data collection, I get close to the two movie theaters’ managers and programmers and find out that each theater has its challenges, limitations, and strategies in dealing with them. The film programming triple bottom line model is applicable and has been developed as it is in Chapter 6. I think this model clearly shows the ecosystem of film programming in a movie theater, and can be a useful analytical system to study the impact of an inside change or outside intervene to film programming. For new movie theaters that have recently entered this industry, the two paths (nonprofit and commercial) can provide them a useful reference to their plan of development.
GFC and AMC Lennox are two comparable cases to study the differences and similarities of nonprofit movie theaters and commercial movie theaters. I believe more cases included will generate new findings and make the model more convincing as well. A retrospective study on the two movie theaters may also illustrate how the two movies theaters have evolved and changed their strategies. Because of a limitation of time, this study only focuses on the comparison of two representative movie theaters of their type within the context of OSU main campus area,
Columbus, in 2018. I think it will be an interesting further study to include cases in a more competitive film exhibition market of a metropolitan area. From the comparison of GFC and
106 AMC Lennox in this study, it is clear to see that their film programming strategies are distinctive in terms of program choosing, audience development, financial status, and marketing tactics, with some overlap. The relationship between the two movie theaters is more like complements rather than competitors. In some metropolitans, there will be several independent movie theaters and multiplex in one district, which are fiercely competing for a market share. How they react to their rivals’ film programming and marketing strategies will be an interesting topic to study program diversity and organizational sustainability. In the 21st century, people have changed the ways of communication, entertainment, and transportation greatly. Because of the time between theatrical and nontheatrical windows, nontheatrical movie viewing streams seem like complements rather than substitutions of movie theaters for high concept movies, which benefit from theatrical audio and visual effects. Nowadays many people listen to pop music on iTunes instead of purchasing CDs. It is reasonable to assume that sometime in the future 3D may not satisfy cinephiles anymore, VR could be widely used and other movie viewing approaches that can also provide theater experience. The impact to traditional film exhibition industry from new technology will get stronger and stronger. Movie theaters need to apply more strategies to deal with increasing challenges.
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