The Rio Theatre’s tug-of-war with the province over liquor regulations has focused attention on the fight for survival of Vancouver’s few remaining independent cinemas.
Operators of small cinemas have rallied around the Rio in its battle to have liquor regulations relaxed so that the cinema can show movies and hold live events where liquor is served.
But local operators say that while a rule change might save the Rio, it’s no silver-bullet solution to a sector in crisis.
Leonard Schein is president of Festival Cinemas, which owns and operates the Park Theatre, the Ridge Theatre and Fifth Avenue Cinemas.
He said Vancouver’s independent cinemas have dwindled from a one-time high of more than 50 to fewer than 10 today.
“It’s like the Joni Mitchell song – people only notice when they’re gone,” he said, pointing to last year’s loss of the Hollywood Theatre and the recent news that the Ridge will be bulldozed to make way for a Cressey Development Group condo and retail development.
What’s wrong with independent cinemas’ business model?
Schein points to Vancouver real estate.
He said large-footprint, high-value lands are driving up cinema property taxes and attracting proposals for more lucrative developments.
“The size of land that they take [up] makes developers want to buy the land to put condos there.”
Schein added that most cinemas, including the Ridge and the Park, are part of real estate strips that most theatre operators can’t afford to buy.
Corinne Lea, who has owned the Rio for four years, said she has concluded that it’s “pretty much impossible” for single-screen cinemas to make it these days in Vancouver.
She said the independent sector is being squeezed by the constrained consumer dollars of the current economy, alternative movie options such as movie downloading and film distributors’ rules that, she said, hit single-screen operators much harder than their multi-screen competition.
Lea said distributors require cinemas to commit to show films for a minimum length of time and that small theatres, unlike multi-screen operations, can’t mitigate losses from a film flop by moving it to a smaller screen, while offsetting its losses by showing more popular films.
“It’s almost like betting on the ponies,” she said, noting that there are only so many blockbusters.
“Eventually, you’re going to wind up with a dud, and you’re going to be stuck with it for two weeks and your entire theatre might get 10 people showing up per day.”
Ken Charko, director and vice-president of the Motion Picture Theatre Association of BC and owner of the Dunbar Theatre, said besides grappling with the economic downturn, independent cinemas’ capital costs have leapt up in the past years as operators have switched to digital 3-D technology “to stay relevant.”
“[Five to 10 years ago] your investments were in the tens of thousands of dollars,” he said. “Now they’re in the hundreds of thousands.”
Lea said that technological change, coupled with provincial consumer protection policy, has added more costs to running a small cinema if, like the Rio, they show second-run films.
She said Consumer Protection BC requires cinema operators to have movies re-rated when they’re released on a newer digital format – even when a film has already been shown in B.C.
“We have to pay them to watch a film like E.T. and do the ratings to tell us that it’s PG like it always was,” she said.
Lea said the industry’s broken business model is behind her plan to diversify the Rio’s revenue streams by hosting live events as well as showing movies.
But she said that the plan has proved disastrous thus far, because securing a liquor licence in late January resulted in the theatre losing its legal ability to show movies.
Lea said that even with a provincial liquor policy change in February, she’s still only allowed to show matinees. She estimates that her business has lost $40,000 since getting its liquor licence.
“We were already struggling and looking forward to getting that licence to help give us a boost,” she said. “And instead of getting a boost we got a really hard hit.”
But while Vancouver’s independent theatre owners and operators have formed a coalition to support Lea’s quest for further amendments to liquor laws, they don’t believe the move alone will save the sector.
Charko is lobbying the provincial government to find ways to support the sector, including relaxing its consumer protection requirements that are adding costs to operating second-run theatres.
Schein said municipal governments are in a key position to support independent cinemas, whether by lowering their parking requirements, classifying movie theatres as cultural institutions to reduce their property taxes or giving developers a density bonus for incorporating a cinema into their project.
But if the current trajectory continues, Schein said the sector’s future looks grim.
“I think all new theatres will be multiplexes and unfortunately [cinemas] won’t be in the neighbourhoods.” •
