Movie theaters are struggling and we all know it. The ease, by which movies can be accessed at home, not to mention the increasing quality of home theater systems, is causing the big-screen theater chains to suffer.
Attendance is down despite attempts from the last ten years to boost turnouts, such as high-def 3D, digital projectors and increased IMAX screen availability. Some smaller chains have even experimented with things like "Smell-O-Vision," moving chairs and assigned-seat ticketing.
AMC has come up with a new gimmick, but this one could actually work. The chain is installing reclining seats in a third of its theaters -- approximately 1,800 screens. The thinking is, if advancing the technology of film viewing isn't generating results, then why not bring the best parts of the "watching at home" experience to the theater? Who wouldn't prefer to watch the latest blockbuster in a comfy, roomy seat, instead of a rigid seat where you have to share your armrest with the person next to you?
The five-year plan will require the company to spend more than $600 million to refit these theaters with the new seats. That translates to expenses of up to $500,000 per screen -- a price tag that local landlords have to share. Fortunately, it's a move that's already paid off in the 37 theaters chosen to prototype the new business model. AMC reports average attendance spikes of 80% in the renovated auditoriums.
The tradeoff to this strategy comes down to simple math: upgrade to bigger, more comfortable seats and you wind up with fewer seats available per screen. In some cases, the retrofit means that as many as two-thirds of a theater's seats are removed. Conventional film owner wisdom has insisted that bigger is better; bigger theaters equal more available seats, bigger screens equate to a more enjoyable experience that viewers can't get at home. Yet AMC's seemingly simple idea actually contradicts that thinking with a radical new approach. It's a bold way of saying that sometimes less is more.
AMC's results are showing that patrons are so delighted by the new theater arrangements that they go out of their way to attend showings at the refit theaters and return to these screens more frequently. The company is also seeing boosted demographics among mid-week attenders and adult ticket buyers.
In addition to the reclining seats, some refit theaters are also offering full dine-in menus, combining the "dinner and a movie" date concept into a one-stop experience.
Other theater chains are taking note of AMC's success. Regal Entertainment is already implementing an initial plan to install reclining seats in 25 theaters by the end of 2014, with more to follow if the change proves popular.
