Galaxy Theatre Henderson

John Sullivan’s blog: fewer seats make bigger audiences

| Cinema owners remove most of their seats and watch box office/admissions climb! |

Through 2007 to 2014 cinemas around the globe went through a remarkable revolution as almost every screen in every cinema was converted to digital a thumping 141,000+ screens, at a cost in the region of US$5-7 billion.

However, the response from audiences to this new technology could be best described a barely stifled yawn and indeed why not? The image on the screen barely changed and for those who can discern the nuances of colour and shades the image lost the richness and depth of a good celluloid print.

There was the initial excitement around 3D, and it was the buzz created by AVATAR in 3D in 2009 that turned that conversion process in to a stampede – however, interest in 3D has waned somewhat and cinemas have generally gone back to business as usual – rapidly deteriorating environments, many not seeing the touch of a paint brush in a decade or more, flogging overpriced sugar treats and escalating ticket prices to a diminishing number of film goers.

There were cinema operators pushing the boundaries particularly from 2010 by providing a more upmarket and adult theme together with luxury seats, often fully reclining. The success of these cinemas demonstrated that cinema audiences were ready for a superior environment and responded well to increased levels of comfort and more refined choice of food and beverage, particularly alcohol and coffee with sweet and savoury finger food – they responded so well that they were and still are prepared to pay double standard ticket prices and spend freely on a wide menu option – these operators included iPic (USA) Village/Event cinemas and affiliates through Australasia and Asia, together with Everyman Odeon.

However, in 2012, a cinema in Henderson, Las Vegas in the USA made a radical and game changing move!

The Galaxy Cinema group took over an 8-screen cinema that had been closed for seven years and gave it a luxury makeover – the old cinema had over 2,000 seats but Galaxy chose to reinstall all luxury full reclining seats bringing total seat count to around 700 in total.

In addition to a refit and refurbishment the operator also added an additional range of menu options including alcohol (particularly beer) and overall the cinema set a ticket price at equal to the competitors in town.

The response from cinema goers was amazing and occupancy levels catapulted from what was around 70 admissions per seat per annum (pre closure) to 600+ admissions per seat per annum – even taking in to account the reduced seating this is close to treble the admissions that had been done and last reports are that those admissions continue to climb.

In 2014 AMC, now the world’s largest cinema group, started to trial the same approach in some of their less well performing cinemas and the results for them have been so outstanding that in 2015 they started a programme to reseat all their cinemas.

In 2015 National amusements in the UK started a reseating programme on their flagship cinemas in the UK and again the results have been outstanding.

Simply less seats with more people coming and going to the cinema more often.

In 2016 AMC cinemas purchased Odeon Cinemas in the UK for £1+ billion and have announced a further allocation of £300+ million largely to fully luxury seat their circuit.

This is just the first wave, and with 140,000+ screens worldwide at roughly 70-100 seats per screen (in luxury format) = 10-14 million seats at around £500-3,000 per seat?

I would definitely recommend investment in cinema seat manufacturers and I am looking for the right luxury seat manufacturer to invest in – all tips are welcome!

For those who want a far more scientific look at this phenomenon of luxury seats in cinemas, I include a link below to some excellent research by John Arnison of Spectrum Analysts – global leaders in entertainment and retail sector research. 

Spectrum Analysts logoJohn Arnison recliner seating executive summaryPDF

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One Thought to “John Sullivan’s blog: fewer seats make bigger audiences”

  1. […] UK – Fewer seats mean more admissions. Luxury seating was definitely big at CinemaCon and the manufacturers’ factories are working flat out – because the economics are compelling. “This is just the first wave, and with 140,000+ screens worldwide at roughly 70-100 seats per screen (in luxury format) = 10-14 million seats at around £500-3,000 per seat?” Read the latest piece of insight from OZSeeker John Sullivan. OzSeeker – 18 March 2017 […]

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