A news story in today’s New York Times caught my eye, so I thought I would tell you about it. The article described places with names like Cinebistro, Cinema de Lux, Cinebarre or Sundance Kabuki Theater and they feature upscale dining, plush surroundings and oh yes, a movie.

Chris Chinnock
Senior Analyst and Editor
for Insight Media

The concept of bundling dinner fare with a movie is not new, but what is new, is that it is going mainstream and upscale. According the Times article, there are now over 300 cinema restaurants nationwide with dozens more planned. That’s still small potatoes compared to the 5,900 theaters and 38,000 screens in the US, but it does represent a nice opportunity for some players.

The trend makes sense. Many cineplexes are located in malls and shopping centers that have lots of dining options. Theater goers often will dine at one of these restaurants before going to the movie - so why not try to capture those dinner dollars at the theater? Remember, movie ticket revenue is split with the studios and distributors, but sales of popcorn, candy - and dinners, stays with the theater owner. This is a great way to potentially increase profitability at cineplexes - if it is done right.

While going out to the movies remains popular, making money in this industry is not always easy. In the late 1990’s theater owners expanded significantly with hundreds of new theaters opening up nationwide. But the gamble didn’t pay off, as ticket sales did not expand enough to offset costs, leading to bankruptcies and consolidation.

The advent of 3D movies has breathed new life into the theaters as these screens consistently outsell 2D screens, typically with 2 to 3 times the revenue. This is a trend that exhibitors want to ride, as the experience is one that can’t be duplicated in the home.

But even this trend is not enough to really propel business. Ticket sales rose in 2007 to $9.62B, up 2% from 2006, but this was mainly the result of an increase in ticket pricing, not attendance. That’s part of the reason for the new attention on adding upscale dining to theaters.

Adding a restaurant to a cinema venue is not necessarily easy or cheap, however. A full-scale restaurant and bar can cost $250K, but you also have to remove some seats, increase the distance between rows, add new, wider and more plush seats, and think about the wait staff and valet parking. If you’re smart, you might even team with a well-known restaurant chain to get real bang for your buck.

The bet can pay off. The average theater goer at the Cinema de Lux in Randolf, Mass., for example, spends $16 on food and other non-movie amenities, according to the Times. That’s not bad, but it is also risky. Such Cinebistros run the risk of being judged on their food quality, which can be good or bad. Remember, an awful lot of restaurants fail every year.

Nevertheless, the idea is to make these dinner theaters a destination. Apparently, Robert Redford’s Sundance Kabuki theater features reserved seating, cocktails, specialty beers, local wines and entrees like game hen and braised oxtail. It really is an upscale restaurant with a movie to boot! If the food really is good, I suspect many people would choose to go to one location for dinner and a movie. I have never been to one of these venues, but now I want to try one - if I can just find one near my home….