Alamo Drafthouse Cinema Relies on Movie Lovers

April 21, 2016

For many modern Americans, going to the movie theater just doesn’t hold the same appeal as in years past. After all, consumers can easily access thousands of films from the comfort of their couches. Those especially fortunate individuals enjoy their media on 70-inch, surround-sound enabled televisions, further undermining the attraction of the theater experience. With these factors in mind, last week the CEO of AMC Theaters said that the company was considering lifting its ban on texting during screenings. Internet commentators responded with outrage at the suggestion, however, and AMC quickly withdrew the concept from consideration.

Still, one theater chain has managed to build its audience base while others have watched theirs slip away. Over the years the Austin-based Alamo Drafthouse Cinema has expanded from one small theater built in a former parking garage to more than 22 locations across the country. The small chain initially appealed to customers by allowing them to order food and drinks directly to their seats. Alamo Drafthouse’s owners also made it clear from the beginning that they were committed to the art of cinema. Along with showing foreign films and classics, the theater enforced a strict no-texting policy that threatened to boot out any customer caught tapping on their phone. This dedication to the movies soon won Alamo Drafthouse some high-profile Hollywood fans. Today, the company earns more than $150 million in sales annually.

Of course, success in the present does not guarantee success in the future. Overall box office receipts in North America have fallen 5 percent since 2013, a figure that experts expect to keep dropping. Other pessimistic commenters assume movie theaters will disappear in much the same way that newspapers and compact discs have. Plus, other chains have started delivering food and drinks to their moviegoers’ seats, potentially reducing Alamo’s central appeal. The Austin-based chain isn’t too worried, though. Its owners claim that their company has perfected the snack bar-to-seat system while others have merely copied it. They also have plans to expand to 50 theaters nationwide by 2018. “By the end of next year,” said co-owner Tim League, “we’ll have a million people a month coming to our theaters, and they’re all cinephiles.” So as long as people who love movies love going to Alamo Drafthouse, the chain should continue expanding in spite of a diminishing market.

 

Questions:

  1. Should national movie theater chains allow texting during screenings if consumers eventually show an interest in it?
  1. Why is it important for Alamo Drafthouse Cinema to set itself apart from other movie theater chains?

  

Source: Felix Gillette, “The Movie Chain Hoping to Steal Netflix Customers With Pizza and Beer,” Bloomberg Businessweek, February 18, 2016; James Whitbrook, “AMC Backs Down on Its Nightmarish Vision of Texting In Movie Theaters,” iO9, April 15, 2016. Photo by Bruce Turner.

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