It’s been an eventful year for Studio C/Celebration Cinema. The Michigan-based chain celebrated its 75th anniversary in 2019. This fall also saw the long-awaited opening of Studio Park, a mixed-use development located in Studio C’s home city of Grand Rapids. While Studio C doesn’t own hotel component of Studio Park, clarifies president J.D. Loeks, “all of the rest of it”—including retail and music space, apartments, an outdoor screening venue, and a nine-screen theater—“is ours. Which means that we effectively launched six new businesses on the same day in early October!”
Loeks, like many in the exhibition space, was put off somewhat by the meteoric ascent-turned-crash and burn of third-party service MoviePass, which cast doubts as to whether movie theater subscription services were viable in the long term. “We started with many of the concerns that those that are holding out have, which is if this not sustainable, if it’s not a net add to our business model, there’s the fear that we’re devaluing our products.”
Movie theaters—preaching to the choir here—are not exactly cheap to run, and the experience Studio C provides, Loeks says, “is worth pretty close to our average ticket price.” Would turning to the subscription model, Loeks wondered, create a mindset similar to that held by many a subscriber to Netflix, Prime Video, or Disney Plus: I should get the movies I want, when I want them, for free. “[People think,] ‘Oh, yeah, it’s free to watch movies at home.’ Well, it’s really not. You’re paying a monthly fee. But that’s how it’s perceived. And if [a movie theater subscription plan] collapses, as some third-party subscription plans have collapsed, then we could be doing some long-term damage. So that was the initial hesitancy.”
That initial hesitancy was combated by research into other exhibitors who have jumped into the subscription space, both by comparing the basic specs of various plans—the cost, the number of movies offered, etc.—and by having conversations with fellow executives. “Whether it was going well or not. Whether or not they thought that they were going to need to adjust it. And what we found pretty much across the board from those that we talked to was, that while tweaks were necessary, it was going well, and they intended to expand the offering.”
Not for nothing, but some of these fellow exhibitors who had already launched subscription programs had begun to cut into Studio C’s bottom line. “Our guests are asking for” subscription services, says Loeks. “They want this. And they are in some cases going to our competitors, because they have it and we don’t. So, much like other innovations in our industry, from digital projection to recliners chairs to bars, you have to keep up or you become less relevant over time in the mind of the consumer.”
Once Studio C decided to launch C Rewards VIP, they didn’t skimp on measured consideration of what, exactly, the program should look like. They consulted customer attendance data—gleaned through their C Rewards loyalty program—to decide upon the offering of three movies a week, including IMAX, for $19.95 a month. Online ticketing fees are waived for movies or concert tickets, and subscribers have an exclusive 24-hour window in which to buy tickets to Studio Park’s Listening Room shows before they become generally available.
Earlier this year, Studio C reached out to their loyalty club members to ask whether they’d be interested in joining a subscription program and what form they would like that program to take. “We saw several thousand people respond right away: ‘Yes, we are interested in something like that,’” Loeks recalls. “That gave us a database to work from” when it came time to launch the beta version, which is open to 5,000 members. “At this point, close to half the people that suggested they were interested six, eight months ago have actually signed up. We think that’s a pretty great conversion ratio.”
Starting with a beta test capped to a certain number of subscribers, Loeks explains, was the right call for Studio C because “we have a belief about a frequency that’s somewhere between two and three visits a month that creates value for the guests and also makes the model work for us.” There will always, he acknowledges, be guests who “beat the system” by using their subscription service at a much higher-than-average rate. But, “for us, even if we lose money on the ticket side of things, because we’re drawing them in more often, on the average we’ll make it back up on the food side of our operation. It’s a little bit of a gamble. A calculated wager… But, on the average, it will be a net positive for us.”
All told, Loeks explains, Studio C is taking a “fairly conservative” approach to entering the subscription landscape, all with the goal of “ensur[ing] we’re launching something that we can sustain, that we can continue to support, that we can allow our guests to continue to depend on.” This careful consideration is what caused the delayed launch of the program, which Loeks initially wanted to get off the ground in August. A November bow gave the Studio C time to make sure the technology behind C Rewards VIP would provide the best possible experience.
With the launch so recent, not much subscription data has come in, Loeks says. “At this point, what we’re particularly focused on is the mechanics of the guest experience and making sure that that’s relatively seamless for the guests. That it’s not clunky and cumbersome…. And that’s been very smooth. It took us many months longer than we wanted to be ready to launch because of that! But it has gone very well and been very well received by the subscribers that have signed up.”
Part of C Reward’s VIP beta launch, of course, is soliciting customer feedback, which Studio C will then use to reevaluate their program down the line and potentially add more features. “The ability to, essentially, purchase multiple subscriptions on the same account”—say, for a husband and wife who go to the movies every week—is proving a popular request. “We do intend to roll that out in maybe the second quarter of 2020.”