Roadside popcorn sales. Pop-up drive-ins. Virtual cinema. The Covid era has been one of experimentation for the exhibition industry, as cinemas worldwide struggle to compensate for shutdowns, capacity limits, and a lack of content. One of the most successful methods for keeping theaters afloat as they wade through a period of recovery has been named Boxoffice Pro’s first ever Trend of the Year: Private cinema rentals and microcinemas.
Private cinema rentals, as a concept, are nothing new. But, with the pandemic, the old world of private cinema rentals in North America—corporate events and children’s birthday parties—took a sharp turn. For exhibitors, renting cinemas out to small groups of moviegoers made sense for many reasons: It let customers know they were open and operating; it gave exhibitors a way to sell tickets during a period of content scarcity and let them reopen their theaters gradually, rather than all at once; and it gave moviegoers still apprehensive about the full cinema experience a way to dip their toes into theatrical waters once more.
Cinemark was the first of North America’s top chains out of the gate for what a representative calls a “a streamlined, direct-to-consumer online private auditorium rental program.” The Texas-based chain, the third largest in North America, announced its “Private Watch Parties” program in July of 2020, enabling moviegoers to rent an auditorium for as many as 20 guests. In August, Alamo started with locations in Austin and Denver. AMC soft launched a beta program in October before officially launching its “Private Theatre Rentals” in November—noting in the press release that the four weeks of the beta period resulted in 110,000 guest requests, more than quadruple the entire number in all of 2019, “without any significant marketing and press announcement.”
Other chains, large and small, were quick to see the benefits of private rentals. One of those is San Antonio, Texas–based Santikos Entertainment, one of the first chains to reopen in summer 2020. “Back in November, we started getting a lot of requests from our customers about private cinema rentals,” recalls COO Rob Lehman. They started renting private cinemas in December, with 658 groups taking them up on the offer that month—54 on Christmas Day alone. “It really took off [from there]. We did three different price structures. We did a $75 rental, we did a $135 rental, and then [with] Wonder Woman 1984 we did $175. We were blown away by the number of people that wanted private rentals. We had 194 alone for Wonder Woman, and that was for the month of December. In six days, 194 private showings.”
Santikos was not alone. Between December’s launch of the Marcus Private Cinema (MPC) program and mid-April 2021, Marcus Theatres sold nearly 25,000 private cinema rentals; over the final 11 weeks of the fiscal 2021 first quarter, they averaged over 1,500 MPC events per week, accounting for over 20 percent of their admissions revenue.
Within four months of the launch of Cinemark’s private cinema rental program, they’d sold nearly 50,000 private events attended by more than 600,000 people, “with a significant portion reporting it was their first time back in the theater since the shutdown, underscoring the opportunity for guests to sample the cleanliness and safety of our theaters,” said CEO Mark Zoradi in a November 2020 call with investors. By the end of Q1 2021, Cinemark had welcomed over three million attendees to more than 235,000 private rentals, making up 20 percent of the chain’s U.S. admissions revenues in that quarter.
AMC, too, saw the success of private cinema rentals continue through the end of 2020 and into 2021. As of press time, they had hosted more than 165,000 private watch parties since reopening in August 2020. Ryan Noonan, AMC Theatres’ V.P. of corporate communication, notes that private rentals had long been available at the chain, but what changed in the pandemic era was a concerted communication effort to inform patrons as to their rental options. As a result, he says, “Consumer sentiment about theater rentals shifted. It was no longer thought of as just for special events like birthday parties or corporate outings. It was now friends and families who were getting out of the house, while enjoying the communal theatrical experience in a way that made them feel comfortable.”
Though the pandemic era has seen millions of moviegoers attend a private cinema screening for the first time, audiences in select overseas countries have been able to rent out cinemas in small groups for years. According to Tony Adamson, GDC Technology of America’s SVP of strategic planning, private cinema rentals have been waiting in the wings for a while, its newfound popularity less caused by than sped up by the pandemic.
“Let’s take a look at the evolution of the movie theater,” said Adamson in an April Boxoffice Pro LIVE Session webinar on the subject of private cinema rentals. “Early 20th century was the grand movie palace. In 1963, the multiplex era began with a twin, leading up to 14, 16, 18-plexes. Then, in 1995, the megaplex era began with the 24-, 30-screen complexes. And now many would say we’re in the dine-in era or the entertainment center era. So, what’s next in the evolution of the movie theater? We feel very strongly that it’s the minitheater.” A smaller theater, rentable by a small group, gives Gen Z and millennial moviegoers in particular the experience they want, Adamson argues: “They want to be with their friends. They want to be with their families. They want to text. They want to talk.” In other words, they want to see the movie they want to see, when they want to see it, and with whom.
The concept has already caught on in parts of Asia, says Adamson, where “the introduction of a new media law in China in April 2017 by media regulator SAPPRFT kick-started the trend of private cinemas (aka microcinemas) in China. The law recognized private cinemas as second-run theaters with earnings now included in the national box office.” GDC’s own GoGoCinema, which allows moviegoers to create their own mini cinema screenings, launched in Singapore and Shanghai in the final months of 2019. Says Adamson, “Despite the pilot test being stopped due to the pandemic, the response from exhibitors and customers was very positive. For example, from October 30, 2019, to January 5, 2020, Hall 4 (GoGoCinema Hall) at GV Funan in Singapore averaged over 90 percent seating capacity, while Hall 3 averaged half the seating capacity of the GoGoCinema Hall.”
With the pandemic, the private cinema rental hopped overseas. North American exhibitors experimented to find the price points and mix of new and older films that best worked for their audiences. Marcus Theatres, noted CEO Greg Marcus in a May 2021 call with investors, found particular success with family films, like Raya and the Last Dragon, Tom and Jerry, and The Croods: A New Age—two films (Raya, Tom and Jerry), notably, that went day-and-date in theaters and on streaming, and one (The Croods) that had only three weekends of theatrical exclusivity. Chris Tickner, director of marketing and special events for B&B Theatres, recalls wondering “[when] all of this would end, as far as how many people are going to continue to want to come and … watch something they can watch at home, which was pretty much what we were able to show.” Happily, the rentals kept coming, speaking to patrons’ desire to experience films theatrically even when they could have watched them at home from their sofas.
Some chains, like Santikos, broadened the private cinema rental concept to include gaming, inviting small groups to bring in their own gaming consoles and games and play on a large theater screen. In March 2021, says Santikos’s Lehman, “We had 43 private rentals on just [gaming] alone. It’s been a huge demand. The kids just love it. We did great internal marketing from our video team here, and we played that in front of the movies that we were showing. Once we started showing that, we got a spike on the Xboxes and PlayStations and having 15 kids in an auditorium playing Madden or Call of Duty.”
As cinemas and audiences alike adapted to the private cinema rental concept, tweaks had to be made. On the opening week of Godzilla vs. Kong, recalls Lehman, a group came in toting a PlayStation and dressed in Team Godzilla and Team Kong T-shirts. “They walk into the auditorium. They hook up the PlayStation. We have one of our managers in there. And all of a sudden, they’re loading up Godzilla vs. Kong through HBO Max. They rented the auditorium for $75 for that one. But we’re renting auditoriums for $135 going through our projectors. So, we said, ‘Whoa, wait a minute, this isn’t gonna work. Give us 60 more dollars. We’ll run it through our projector.’… That was pretty creative. We had to tweak our FAQs again on that one.”
Other changes didn’t involve rule-bending teenagers. For private cinema rentals to have any sort of longevity—at least enough to get the industry through the pandemic—the booking process would need to be streamlined and simplified for the benefit of both the customers and the theaters. That involved another trend that’s seen a major boost during the pandemic: mobile ticketing. At AMC, previous investment in online ticketing made its private rental campaign easier to launch. Notes Noonan: “Online ticketing in general has exploded over the last decade, and AMC has invested greatly in our online ticketing technology, as well as in features that accompany online ticketing, like our website, reserved seating, and mobile ordering. Guests were already accustomed to going online to purchase tickets and, in many cases, purchase tickets well in advance of a showtime, making it easier to plan a night out with friends and family for a Private Theatre Rental.”
“Bringing it online made a huge difference for us,” says Marcus Theatres’ V.P. Sales Clint Wisialowski. “As much as I love my crew and our Group Sales Department, once we automated this system and allowed people to come in through what we’re calling our micro site, it dramatically changed the numbers for us. It allowed us to, with greatly depleted staff based on all the furloughs we had, monetize these private rentals.”
Added to that, notes Annelise Holyoak, national director of marketing and communications at Cinépolis Luxury Cinemas, “The people that are renting [cinemas] are the millennials that are very tech savvy, and they really don’t have any interest in dealing with the sales team.”
For Marcus, as they moved into April 2021, the volume for private cinema rentals remained “tremendous,” says Wisialowski. “Right now, we’re booking about 40 percent more events than we had in 2019 over this first quarter.” What doesn’t match up in the current private cinema rental landscape, he notes, is attendance and revenue, which “[don’t] even compare” to what Marcus was pulling in pre-pandemic. “So, even at this volume, it’s still not significant enough for us to say that this would be our business model going forward.”
“I call it the 100/100 phase,” Wisialowski continues. “When you get to 100 percent open and 100 percent occupied, this system no longer works.” It’s a sentiment echoed by other exhibitors. Deeply discounted private cinema rentals (the average event pre-pandemic at Marcus cost around $850) make sense when capacity limits and a lack of content put a cap on attendance, but once those restrictions are removed, a cinema can typically make more money on a general admission screening than they can by renting it to a small group.
At Cinépolis Luxury Cinemas, private cinema rentals kicked off in a beta form in May 2020 at their Moviehouse and Eatery locations before they were even open to the public. “It was a family affair,” says Holyoak. “We had the CEO running drinks. … Having a limited menu and just opening up to those reservations made it really easy for us to get started.” Private cinema rentals later expanded to the wider Cinépolis Luxury Cinemas brand, and demand ballooned—to a point where it has outstripped supply, at least when it comes to what Holyoak terms “prime time hours.”
“People are kind of frustrated that they can’t get a theater for four people, or even 20 people, now that capacity is up to 50 percent [in California],” says Holyoak. “It really makes more sense for us to just have it as a regular show.”
In April 2021, B&B Theatres stopped letting people rent its cinemas to watch older titles on weekends. Even a multiplex with a dozen-plus screens, argues Tickner, needs to devote most of those screens to general screenings once lucrative new films—like Godzilla vs. Kong—start to debut. With moneymakers finally back in cinemas, B&B Theatres and Cinépolis count themselves among the chains that have begun shifting private rentals to off-peak hours. At AMC, the plan is to continue to offer private rentals “after this summer and likely far into the future,” says Noonan. He anticipates that after the pandemic subsides, AMC will continue to see demand for special events like birthday parties and corporate outings, as well as the sort of friends-and-family cinema gatherings that moviegoers have been introduced to.
Meanwhile, at Cinemark, the increased presence of blockbuster movies means the chain has seen “an increased number of people booking standard showtimes over [Private Watch Parties], particularly as Covid cases decline, vaccinations increase, and consumer sentiment rises,” says a Cinemark representative. “While Private Watch Parties will still continue to exist at Cinemark for the foreseeable future, their frequency and amount may evolve as we welcome new content from our studio partners.”
“I don’t think the concept is going away any time soon,” says Cinépolis’s Holyoak. For one, the way the pandemic has pressed cinemas to simplify the rental process will impact traditional group sales moving forward. “Prior to Covid,” she says, “our company was doing thousands of private events every year. Primarily corporate, but we joked that the most time-consuming events were the kids’ birthday parties. … Our highly paid sales team was focusing way too much attention on that. This has been a game changer for us now that we’ve gotten it online. If you want to have your kid’s birthday party, you can book it online yourself and, quite frankly, we’re just not going to help you coordinate clowns and all these other things. If you want to go that route, you’ll have to have a higher food and beverage minimum and book with our team.”
Kid’s birthday parties and clowns aside, if, moving forward, a customer wants to rent a cinema for their group of friends to see the latest blockbuster, they may still be able to do so, depending on the cinema. Just don’t plan on a Friday night spot or Covid-era pricing. At B&B Theatres, says Tickner, the presence of 30- to 40-seat auditoriums alongside larger-capacity houses means private cinema rentals might remain “an ongoing revenue stream” after Covid. “They might not get Avengers on opening weekend. But we’ll tell them, ‘Hey, you can get that 30-seat auditorium two weeks after.’ And [they can say], ‘OK, I’ll watch it opening weekend and then I’ll come back for my private rental two weeks after.’”
Given the potential of private cinema rentals as an ongoing auxiliary revenue stream, especially as cinemas continue to explore alternative, niche forms of programming—and given the general unsuitability of large auditoriums to the private cinema rental concept—could we be seeing an increase in the number of microcinemas in North America over the coming years, either through new builds or the renovation of existing theaters? Adamson of GDC Technology believes we will. “Many exhibitors are resistant,” he admits, “but there are [an] equal amount that are ready to move onto the next era. Recently built suburban complexes, they average seven screens with about 125 to 250 seats. There are several other barriers: high capital investment, film distribution costs”—and the need for projection equipment suited to small spaces.
Mike Cummings, senior principal at TK Architects, which has operated in the cinema design space for 40 years, believes that the private cinema rental concept has “strong potential,” pointing to the fact that “the pandemic has proven that customers like the option of private cinema rental.” Too, Cummings argues, the relationship between exhibitors and studios has changed over the course of the pandemic, meaning, “Exhibitors are exploring other content sources and should also be exploring other revenue sources. Microcinemas can be part of this inevitable evolution of the exhibition business model.”
The issue, expectedly, comes down to money. Exhibitors, says Cummings, are “immersed in recovery. Between SVOG [the Shuttered Venue Operators Grant program] and the complex logistics of reopening facilities, they are striving to achieve some semblance of financial stability”—so, even though some exhibitors have expressed “keen interest” in microcinemas over the last several months, “it is not their priority right now.”
As the industry stabilizes, Cummings says, “Converting is the most likely first wave. Right-sizing spaces is critical long-term but less important with current content availability. Many facilities have more auditoriums than they can utilize effectively right now. They could allocate a few to microcinema[s]. … We have seen some experimentation, but we believe the right formula is yet to be discovered.”