On average, only 37 people per day buy movie tickets at the Avalon Theatre
There has been a significant amount of misinformation from the community surrounding the announcement that, come January 1st, 2020, we will no longer be showing nightly films at the Avalon Theatre. In order to correct the record and give everyone an accurate understanding of why we made this difficult business decision, please see the below facts:
There is no hidden agenda behind our decision. The Casino remains open for events, daily tours, special occasions, and of course, high school graduation, and the theatre’s architecture, decor, and equipment will all remain intact and maintained.
The only change we are making AT THIS TIME is that the Avalon Theatre no longer will show movies nightly.
The primary reason for this decision is declining attendance, which is not unique to our theatre. Many movie theatres in small town America have had to close their doors due to declining revenue. Gross national box office revenue is down across the entire movie industry.
Since 2016, attendance at Avalon Theatre is down 26%. When you compare 2019 year to date with 2018, attendance is down 12%. Excluding the five “Blockbuster” films shown so far this year, the theatre has averaged only 37 people per day. Our most popular film this year, The Lion King, averaged 165 people per day during its run. This means very few residents and visitors are watching movies at Avalon Theatre. We need 134 people each evening to cover all our costs.
From Jan. 1 – Oct. 25, 2019, movie studios, on average, charged us 60% of our box office ticket sales to show their movies. Disney, whose family-friendly films account for many of movies we show, charged 65%. Some studios charged a staggering 92%!
Despite the limited audience our small town provides, studios are not willing to negotiate these terms. It is out of our hands. To make this business even harder, studios also require that the newest movie releases must run for a minimum of one week and have seven “premium showings” during the theatre’s most popular hours. Additionally, larger feature films often require runs of two or more weeks, which proves extremely challenging when 65% of our moviegoers visit within the first week of a three-week run.
We tried waiting longer after a film was released before showing it in order to receive one-week terms. Even then, studios were so inflexible that they kept their terms similar as if the movies were still new releases. Attendance did not improve, primarily because the movie was out in theatres for so long or it was already on DVD.
We kept ticket and concessions prices down for years in order to draw crowds. However, keeping prices low did not increase attendance, so we were forced to raise both ticket and concession prices to make up for poor attendance. Our efforts to increase revenue by offering higher-priced expanded food and beverage options also proved unsuccessful.
Some of you suggested we show older films and classics. We tried this in previous years with dismal results. It’s worth noting that, even with these types of films, studios still take at least 30% of ticket sales. We also explored offering different show times, including two nightly showings, as well as a nightly showing and a matinee. None of these tactics increased attendance.
Because of declining attendance and the Island Company’s ever-increasing significant subsidy expenses, last week I approached our Mayor, Anni Marshall, to see if the City of Avalon would consider helping underwrite the expense of showing films at Avalon Theatre. She quickly responded “no.”
We have met and are continuing to meet with island residents to hear their thoughts and ideas about showing movies on a regular basis.
Hopefully these facts help you to better understand our difficult situation and give you some data.
On a final note, please know that the executive team of the Island Company cares deeply—not only about the Theatre and the Casino that houses it, but also about all the iconic and charming buildings of Avalon.
Over the past few decades, we have worked to preserve and or restore those structures, including the Country Club, El Encanto, and, most recently, Hotel Atwater. The Island Company also placed the Chimes Tower in an independently run private charity for it to be beautifully restored. (Also, the Island Company is headquartered in Avalon with a satellite office in Irvine.) We respect our past, and with your help, want to build on that foundation.
If you have any questions regarding our decision, please do not hesitate to contact me.
Randall Herrel, Sr.