Luxury cinema upgrades coming to the Sonoma County box office

Like an aging film star, the Rialto Cinemas in Sebastopol has recently undergone a notable facelift to keep up with demands of a fickle audience.

The nips and tucks are evident from the new entrance area with subtle Art Deco undertones to the old movie reels used as sculptures. There are two new bar areas with craft beer and wine and a menu that features items such as bruschetta with Genoa salami, stone-ground mustard aioli and fresh chive.

“We are trying to do more than burgers and fries,” said Ky Boyd, the proprietor of the nine-screen theater since May 2012. “We had a lot of people say, ‘I have never had wine or Prosecco with popcorn and it’s really good.’”

With the 11-month makeover complete, Boyd said he wants to increase attendance by 15 to 20 percent, even after a banner 2015 driven by hits such as “Jurassic World,” “Avengers: Age of Ultron,” and the highest grossing movie ever in U.S. cinemas, “Star Wars: The Force Awakens.”

In a local industry with 10 commercial complexes in the county, business can be as competitive as a Hollywood casting call. If you don’t keep up with the latest amenities, you could find yourself as the latest box-office bomb. Other theaters will undergo renovations this year, some that could total as high as $3 million.

“Amenities make the desire for coming back again,” said Milt Moritz, president and chief executive officer of the National Association of Theater Owners of California/Nevada. “Once you have a taste of something you like and enjoy, you will buy it again.”

No matter the upgrades, theater owners interviewed stressed the main driver in their business is content: Good films translate to good revenue. And 2015 was a very good year.

Ticket sales in the United States and Canada totaled a record $11.1 billion in 2015, a 7.5-percent increase from the previous year, according to comScore, a national research group that tracks box office data.

“The summer was awesome,” said Ryan Hecht, owner of the four-screen Clover Theater in Cloverdale. “Then finishing up with ‘Star Wars’ was pretty great.”

Boyd agreed and noted that his theater had about 150,000 patrons for the year, up from 138,000 in 2013.

That marked a turnaround from a mostly thumbs-down 2014, when the combined U.S. and Canada box office totaled $10.4 billion, down 5 percent from 2013, according to the Motion Picture Association of America. Admissions (1.27 billion) and the average number of tickets sold per customer (3.7) both dropped 6 percent in 2014 from the previous year.

Movie theaters typically have a sliding-scale arrangement with the film studios on revenue splitting. During the first week of release, the studio will keep a much higher percentage of revenue, usually 70 percent, according to one estimate, and it gradually drops over time. Incentives can also be placed into contracts for some releases - big-budget movies known as “tent poles.” For example, The Walt Disney Co. had such leverage when it released the “Star Wars” film this winter.

Paul Dergarabedian, a senior media analyst for comScore, estimated a movie theater may keep about 50 percent of its overall ticket sales for a year.

That places the onus on movie theaters to find additional revenue streams, which in turn has created an arms race in adding the latest amenities for customers. In a notable example, the Cinépolis chain offers waiter service, luxury reclining seats, gourmet appetizers and entrées and a full bar. Their major presence is in southern California. Tickets, however, can go as high as $21 for a movie. The average ticket price in 2015 was $8.43, according to the National Association of Theater Owners.

“That makes a huge difference now for many people,” Dergarabedian said of such ritzy offerings. “Once an audience got a taste of that movie-going experience, then you can’t put that experience back in the bottle again.”

Theater owners like Daniel Tocchini, president and chief executive officer of his family’s Santa Rosa Entertainment Group, has seen the results firsthand. His company runs five complexes in the county: the Airport Stadium 12, Roxy Stadium 14, Third Street Cinema 6, Summerfield Cinemas, and the Raven Film Center in Healdsburg. The Raven was a trend setter in selling wine and beer in 2008, though it first had to reach a compromise with city officials and set aside two of its four theaters for those age 21 and over. It now offers alcohol in all four theaters.

The company recently remodeled its Camarillo complex in southern California with fully motorized leather recliners and movable snack trays. The seats can be reserved in advance. It also expanded its food menu, offering gourmet sausages and quesadillas.

While it decreased its seating by 60 percent at the complex, its patronage has increased by more than 100 percent, Tocchini said.

“It’s a trend in the industry that has been going for the last couple years,” Tocchini said. He said he wants to start on an upgrade this year on either the Roxy or Airport complex. “It’s so expensive to do it...It will take some time.”

Another renovation, albeit more limited, will take place this year at The Clover Theater, owner Hecht said. Three of the theaters will receive traditional seats, while one theater will feature reclining seats and an expanded sound system. Wine and craft beer from local brewers such as Bear Republic and Cloverdale Ale will also be served.

“It will be space where you can do parties and events,” he said of the luxury theater. “It will be something where people will want to bring their families.”

Hecht said he will use the luxury theater as a test case to weigh further renovations. But he said he is bullish on the endeavor, pointing to the success of the Texas-based Alamo Drafthouse Cinema chain, which operates a cinema in San Francisco, It offers premium beer and wine offerings, special events like “quote-along” dialogue screenings and slumber parties featuring movies such as “Dirty Dancing” and “Clueless.”

“We want to experiment with it,” he said. “We want to see what kind of food they will like, and how they are getting to their seats.”

In fact, experimentation is part of his business. Last year, his theater helped present a drive-in movie showing of “Jaws” at the Cloverdale Citrus Fairgrounds. Such alternative programming is increasingly common as owners look to expand the revenue pie, especially during times when the theatre is not as busy, such as weekdays and mornings.

For example, the Rialto shows the National Theatre Live and the Metropolitan Opera Live. Such performances can last more than three hours at times, resulting in hungry and thirsty patrons.

“You can order something and we will have it ready for intermission,” Boyd said.

(Food and drink concessions remain a profit center for theaters. Popcorn, in particular, sells at an estimated 1,000-percent markup.)

The Roxy will hold a Silver Screen Film and Comic Festival March 4-6, hoping to jump aboard the bandwagon of the popular “comic con” events. It will feature John Landis, the director of “An American Werewolf in London,” and actor Robert Englund, who played Freddy Krueger in “Nightmare on Elm Street.”

Local theaters also have partnered with schools, a trend that attracted considerable attention last year when a group provided free tickets for junior high and high school students in certain cities to see the movie “Selma” on Martin Luther King Jr. Day.

Locally, the Rialto hosted some students from Analy High School for a showing of “Macbeth” while Santa Rosa Entertainment has done programs with the Sonoma County Office of Education.

“It’s great to bring kids in give them cinematic experiences that aren’t cinematic junk food,” Boyd said.

The Airport 12 also has a program named “Sensory Sensitive,” where it shows a children’s film on the last Saturday morning of the month. During the movie, the lights are up and the sound is turned down. The showing is very popular with special-needs children and adults as well as mothers with young children, said Catherine DePrima, director of marketing.

The local market is very mature, theater owners said, and they don’t expect any additional new entries, especially as corporate chains are not prevalent in Sonoma County. In fact, the only corporate owner is Reading International, with its Reading Cinemas Rohnert Park.

The solid revenue numbers are welcome, though owners say they can’t remain static. The industry nationally has suffered a decrease in indoor cinemas; there were 5,375 in 2015 compared to 7,151 in 1995, according to the National Association of Theatre Owners.

“It’s been stable. It’s a good theater-going area,” Tocchini said of Sonoma County.

Owners said they have been conditioned to expect the worst from competition over the years, whether it was the VCR, Blockbuster Video, DVDs, or the Internet. But the threats have never posed a fatal threat.

The latest battle is over the Netflix practice of releasing a movie at the same time it’s placed on its video-on-demand service, as it did for the movie “Beasts of No Nation.” The major national theater chains protested the practice because it did not provide the standard three-month break between a theatrical release and the small screen. They boycotted the movie, which killed its box office numbers, resulting in only $91,000 in receipts.

Even with Netflix and Amazon getting more into the content side, local owners note that movie fans still like to watch films on the silver screen.

“There’s a kitchen in every house, but there are still restaurants,” Tocchini said.

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.