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Improving cinema's financial picture

The company: Vogue Theatre The problem: Dwindling and seasonal attendance, outdated equipment The plan: Expand product and location offerings, upgrade video and audio systems, raise marketing efforts The payoff: Increased ticket and merchandising sales, year-round location rentals

From Monday's Globe and Mail

Jeff Coates leads a double life.

By day, the 34-year-old plies his trade as an automotive technician in Dieppe, N.B.

But at night, he operates the Vogue Theatre (which he owns) in nearby Sackville.

"I have been a huge film buff since I was a kid," he says with a laugh.

"So much so, that I bought my very own cinema two years ago. I'd love to make it my full-time gig."

As one of the last independent movie houses in Atlantic Canada, the Vogue remains a link to the region's historic past.

With its bold, art-deco marquee looming out over downtown Bridge Street, the 62-year-old, 304-seat auditorium has long been a landmark in the Sackville community. It's a place where both local residents as well as transients from Mount Allison University can still take in mainstream or repertory-type films seven nights a week.

However, as with other businesses in academic towns across the country, the theatre's fortunes rise and fall with the rhythms of student life.

"Things are definitely much quieter around here from May to September," Mr. Coates concedes.

"Tourists usually take up some of the slack, but with the price of gas so high right now, I'm not sure if we are going to see very many of them this year."

As well, with the city of Moncton less than 30 minutes away, the local population has easy access to a whole host of other entertainment options.

"Not only that," Mr. Coates adds, "but home movie rentals and the illegal downloading of films off of the Internet continue to cut directly into my already-low profit margin."

And, in an age where moviegoers demand digitally mastered, high-definition video and surround-sound audio, the single screen and aging speakers at the Vogue seem like throwbacks to another era.

"I just can't compete with the megamultiplex cinemas," he admits, "and I am beginning to wonder if there is still a place for an old-fashioned cinema in the modern world."

"What can I do to bring more people through the doors?" he asks.

What the experts say

Dean Leland, vice-president of marketing and media for Halifax-based Empire Theatres Ltd. says consumers want more than just a movie; they seek "a complete entertainment destination."

He advises theatre owner Jeff Coates to develop food product offerings. "People are not just eating popcorn and penny candy any more. They now want everything from hamburgers, hot dogs and nachos to power drinks and even healthier snack options."

Selling retro merchandise will appeal to older audiences. "Historical film memorabilia - movie posters, T-shirts, hats and so forth - would likely bring in a few more bucks, as would items that celebrate the Vogue's distinct heritage."

Refillable gift cards make perfect sense. "These can be used for anything at any time," Mr. Leland says. "And they make for a great gift idea."

Alternative content can also help fill financial gaps. "We're not going to have hit movies all the time," Mr. Leland admits. "In recent years, Empire has taken to presenting live simulcasts from the Metropolitan Opera in New York, WWE [World Wrestling Entertainment] events and even Stanley Cup playoff hockey broadcasts to offset [slower times]. Getting involved with local film societies and festivals has also kept us more involved with our communities."

Making better off-hour use of the facility's unique location for corporate and private functions will also help. "Birthday party packages are a must," Mr. Leland says. "Coates would be wise to pitch the room to local and area businesses. Not just for company events, but because the big screen offers them a wonderful opportunity to advertise ..."

Adina Lebo, executive director of the Motion Picture Theatre Association of Canada, says it is what is showing on the big screen that will determine success. "At the end of the day, it is the hit movies and the blockbusters that will bring in the big crowds."

Often, being aware of trends can make the difference between profit and loss. "We are cyclical in nature," she says. "Keeping tabs on who walks through the doors, and when and why they do, can help determine what kinds of films draw bigger crowds. It only takes something as simple as charting ticket sales or having a ballot box contest to provide that kind of information."

Newspaper and radio ads, flyers, regular snail mail and e-mail newsletters, and having an updated website, are all cost-effective ways to grow visibility and profits. "In our industry, however, word of mouth is still the best form of advertising," Ms. Lebo says.

While she admits it is both tough and expensive to keep up with changing technologies, she believes independent theatre owners have several options. "High-definition video and audio systems can be rented on a short- and long-term basis. The real advantage with this is that they can be serviced regularly and even upgraded as customers' needs and wants evolve."

If renting isn't possible, buying and maintaining the most up-to-date screens and speakers is a needed investment. "This can most likely be factored into a business loan or mortgage," Ms. Lebo says. "Discounted pricing is available through associations like ours, which often buy these things in bulk for members."

There are other advantages for Mr. Coates in signing with industry organizations. "We often share statistics and best practices with each other," she adds, "and we work together to lobby policy and regulatory changes, especially with regard to online piracy issues."

Despite growing competition for consumer dollars, she says people still love to go to the movies. "Refining his products and services can only help put even more bums in seats."

***

In a nutshell

Products: A greater selection of on-site snacks, merchandise and amenities will drive and retain customer traffic. Alternative content can offset slower seasons.

Location: Off-hour rentals for corporate and private events will generate funds and visibility.

Advertising: A mix of low-cost, high-impact media will grow market share and visibility.

Upgrades: Investing in high-end video and audio equipment will provide customers with a high-end movie experience and keep them coming back.

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