Marquee Cinemas,Inc.

 

A Mix of Old and New Strategies Spells Regional Cinema Success

 

by the E.S.P. Staff

 

Grandparents often tell their children, “You can go a long way with some old-fashioned courtesy.” Marquee Cinemas, Inc. is telling its employees the same thing. The Beckley, West Virginia-based operator of seven movie theaters has weathered 20 years in the business and has found that old values are just as important today as modern innovations to compete in the current movie mega-mart.

 

From a modest beginning with one twin-screen theater in its founder’s hometown, Marquee Cinemas currently operates 40 screens at seven sites in four Mid-Southern states. The company is considered a small potato in an industry where huge, multi-layered corporations operate thousands of screens in hundreds of theaters. But where some small operators are closing their doors or scrambling for position in the face of newer, bigger and fancier competition, Marquee Cinemas is successfully cutting itself a regional niche.

 

Despite terrific competition from many- layered corporations operating thousands of screens in hundreds of theaters,

Marquee is successfully cutting itself a comfortable regional niche

 

Marquee’s secret is that its management has learned to take its knowledge of the old market and combine it with the realities of the new one. The company’s strategy is to acquire, develop and operate multi-screen theaters in growing small to mid-size metropolitan markets that are underserved by existing facilities--or that may be too small to interest  larger exhibitors. In those carefully positioned markets, Marquee combines cutting-edge technology with down-home camaraderie. And the strategy is working.

 

The company will open a new 12-screen location in West Virginia this month and further expansion, including penetration into two more states, is on the drawing board.  Plans call for 226 screens at 22 sites by the summer of 2000.  Marquee’s goal is not just to compete, but to become a major regional force in the film exhibition industry.

 

Brian McCall, vice president-real estate for Marquee, believes that smaller operators like his company can compete successfully in the modern market by strategic theater placement and catering to the patrons of those theaters. “Whether the operator is small or big, people come into a theater to relax,” he notes. “You have to take care of your operation in each location.” Marquee does this by offering the same high-tech facilities that the larger operators do but also focusing on customer service, friendliness and cleanliness in each location.

 

Marquee’s secret is to focus on markets too small to interest 

bigger exhibitors and to offer an unbeatable combination
of high technology with down-home service

 

Marquee Cinemas, Inc. started as CDB Theatres in 1979 when Curtis McCall, currently Marquee president, ceo and chairman of the board, constructed and opened CurDanBri Twin Cinemas in his hometown of Rainelle, West Virginia.  The theater, whose name was an abbreviated amalgamation of the first names of Curtis and his siblings Danielle and Brian, had two screens and accommodated 400 moviegoers.

 

Later, McCall shortened CurDanBri to CDB and, recognizing that a viable market existed in smaller cities and secondary suburban areas, he began to expand operations. In December 1982, McCall opened Crossroads Cinema 3, with 742 seats,  inside the Crossroads Mall in Mt. Hope, West Virginia.  Seneca Showcase joined the company’s line-up in February 1983 with two screens and 430 seats just outside of Lewisburg, West Virginia, adjoining the Greenbrier Valley Mall.  In December 1985, Crossroads Cinema underwent expansion that included the addition of three screens and 510 seats and a name change to Crossroads Cinema 6. 

 

Marquee’s goal is to become a major regional force in the film exhibition industry

 

In 1988, at the Merchants Walk Plaza in Summersville, West Virginia, CDB took over the lease on the existing four-screen, 712-seat Nicholas Showplace. When the lease expired in October 1994, CDB purchased the facility.  Five years later, Showplace Cinema opened in May 1993 on Eisenhower Drive in Beckley, West Virginia.  Marquee purchased the property from a lumber company and renovated the 21,000-sq.-ft. building on the property to house a six-screen, 1,252-seat state-of-the-art theater featuring digital sound, wide screens and spacious seating, large lobby and parking area.  Showplace added another screen and an additional 92 seats in June of 1995.

 

By 1997, CBD Theaters had become the leading motion picture exhibitor in Southern West Virginia. Up to this point in time, management had opened all the CDB Theatres as individual businesses.  A reorganization in 1997 resulted in the formation of the current Marquee Cinemas and a modified focus from the exclusive development/construction of new theaters to the purchase of existing facilities as well.  CDB Theaters is still used as the trade name for the original five theaters, all located in West Virginia.

 

During 1997, Marquee Cinemas, Inc. began expanding to other states.  In 1997, the new company purchased Park Plaza on Hilton Head Island, South Carolina. Highland 7 Cinema in Glasgow, Kentucky was acquired at about the same time.  The Hilton Head purchase was a package deal for two theatres from
a common owner.  Due to its rundown condition and unfavorable market location, one of the Hilton Head aquisitions, Main Street Cinemas, was closed in 1998 when its lease expired

 

In 1998, Marquee opened Southpoint 9 at the Massaponax Outlet Center in Fredericksburg, Virginia.  The nine-screen complex features a state-of-the-art film presentation system.  Since its opening, Southpoint 9 has exceeded expectations; a four-screen addition and conversion to all stadium auditoriums is scheduled to begin this summer.

 

 

Curtis McCall, president, CEO, chairman and founder of Marquee Cinemas, Inc., cuts the grand opening ribbon at the Southpoint 9 in Fredericksburg, Virginia.  On hand for the festivities were company officers, from left: James Cox, executive vice president; and Brian McCall, vice president of real estate.

 

While it has always concentrated on old-fashioned hospitality to pull customers in to its individual locations, Marquee Cinemas has learned to make full use of modern marketing methods throughout its domain. Word-of-mouth is fine, but the company also actively markets its theaters through grand opening promotions, direct mail, weekly radio campaigns, and daily and weekly newspaper advertisements.  Marquee also uses special marketing programs for specific films and the concession items, continually seeking new and proven promotional ideas while striving to increase the attendance and the food sales.  Marquee has developed an Internet Web site (www.marqueecinemas.com), which displays available film selections, show times at each of its theatres, and movie information and promotional links.

 

Another thing the company has learned is that it is very expensive to build modern movie theaters. “Today, it all comes down to technology,” says McCall, noting that the cost of constructing a new theater today runs between $8 million and $15 million, or $100-$400 per sq. ft.  Some operators will still revamp an existing theater or outfit an existing building  to become a theater, but in the long run it is easier to deal with the high-tech gadgetry of modern cinemas by constructing a new facility. In a nutshell, McCall says, “If you’re new, you need to be state-of-the-art.

”

 

 

Competing in the modern, high-tech cinema exhibition industry calls for state-of-the-art facilities like this Marquee prototype designed by MHB Design Group, Inc., 985 Parchment S.E., Grand Rapids, MI 49546; (616) 942-1870.

 

By example, Marquee Cinemas is also currently underway with the construction of Southridge Showplace, a 12-screen, 1,960-seat cinema complex with six screens on each of two levels, at Southridge Shopping Center in Charleston, WV. The 52,000-sq. ft. facility is located on Route 119, straddling the city limits of Charleston and South Charleston.  Southridge Showplace will feature state-of the-art design in the layout of the auditoriums and equipment.   Each auditorium will provide thick, high-back stadium seating with cup-holders on the chairs, wall-to-wall screens, and high-tech sound systems.  Two of the auditoriums will be Lucasfilm THX-certified.  All will be equipped with Dolby,  DTS and SDSS digital sound systems.  Further amenities include colorful neon lighting, a large lobby with video games, balcony overlooking the lobby, large stair-walls, elevators, gaming area, two concession areas, and a party room for birthday parties and group events. And, even before this facility opens in late April 1999, Marquee has already announced that it expects to expand the theater to 19 screens within 12 months.

 

An aggressive expansion plan will beef up Marquee’s screen count by 171 new screens over the next 15 months, resulting in an increase of nearly 600 percent over current holdings.  All theaters will feature the now-becoming-standard amenities that are being constructed in the Southridge Showplace. In addition, the facilities will offer handicapped accessibility and large screen previews will be displayed in each lobby, which will also feature video gaming areas and expanded concession items including pizza, ice cream, cappucino, pretzels and muffins. Marquee management hopes all these theatres will open by 2000.

 

Construction is scheduled to begin by May 1 on 14 screens in Winchester, VA, nine screens in Princeton, WV and 14 screens in Elizabethtown, KY. Eight additional new developments are on line to begin by May 15. In West Virginia:  10 screens in Clarksburg, I-77 Bridgeport exit; 16 screens in Huntington, Barboursville Mall area; 14 screens in Beckley, Crossroads Mall; eight screens in Lewisburg, Rt. 219 North; 10 screens in Wheeling, Wheeling Downs Track. In South Carolina: 16 screens in Florence, Radio Road at I-95. In North Carolina: 12 screens in Rocky Mount, U.S. 63 Bypass & Hwy 301.  In Tennessee: 14 screens in Cleveland, Bradley Square Mall.  Then three new theaters are scheduled to break ground this summer. In North Carolina: 10 screens in Goldsboro, Oak Forest & Cashwell; 10 screens in South Pines. In West Virginia: 10 screens in Winfield, Winfield exit I-64.

 

The company actively markets its theaters through grand opening 

promotions, direct mail, weekly radio campaigns, and daily 

and weekly newspaper advertisements

 

Due to the high cost of constructing these state-of-the-art facilities, McCall says that his company relies on developers for financing. Developers on Marquee projects include Crown American Properties, Centurion Development Corporation, Wilmorite, Inc. and others.

 

Something that all cinema operators, whether big or small, are facing is rapidly changing technology. Even state-of-the-art facilities now being constructed are likely to become, if not obsolete, at least somewhat passe within a few years. “Digital cinema is just around the corner,” predicts McCall. It will be an asset because the picture quality will be better, but negative because of the cost to convert everything.”

 

With continually rising costs, McCall says that he also thinks a rise in theater admission prices is inevitable throughout the industry. That may result in a drop in the number of moviegoers, but McCall notes that the cost of other forms of entertainment is also rising. “Going to the movies is still a good deal in entertainment, given what you get and the time you spend getting it,” he says. And, he feels that since recent industry statistics have shown that only 28 percent of the American public provides 85 percent of the theater box market, there is still an untapped audience to be drawn into future theaters.

 

In targeting audiences for new theater development, McCall says Marquee looks for a population of 25,000 to 75,000 within municipal limits or approximately 100,000 within a 20-mile trade area. Smaller demographics are considered feasible if there is no existing theater base. Placement in a small, mixed-retail mall is preferable, McCall says, adding, “Small malls offer built-in foot traffic.

 

A key to Marquee’s success has been its ability to target secondary, smaller markets that have been and are likely to be overlooked by larger operators. Marquee prefers areas with little or no competition but won’t rule out an area that does have another theater presence if it is felt the market can support favorable competition. By example, McCall points out that Marquee’s  Southpoint 9 at in Fredericksburg, VA is near a Regal theater and that both theaters are doing very well. “Sometimes the public appreciates having alternatives,” he says.

 

With all its marketing savvy and ability to play by today’s high-tech movie standards, Marquee Cinemas is well on its way to achieving its goal of becoming regional force in cinema exhibition. “We can compete with the bigger operators,” feels McCall. But he also thinks Marquee’s real cutting edge is from an old saw that has served the company well. Caring about customers and treating them well may be old-fashioned but has never gone out of style. In the future, today’s new technology might become old-hat, but the rarity of common courtesy will have taken Marquee Cinemas a long way, indeed.

For more information contact:

Brian McCall, Marquee Cinemas, Inc., 552 Ragland Road, Beckley, WV 25801; 304-255-4036, Fax 304-252-0526; home page: www.marqueecinemas.com.