CAN PREMIUM MOVIE THEATRES BRING BACK THE PATRONS?

One entrepreneur from Mexico thinks so.

Carlos Wellman is hoping to bring a Mexican revolution to the sluggish U.S. cinema industry.

Wellman is the U.S. point man for Mexico City-based Cinepolis, the world's fourth-largest theater chain and Latin America's top circuit that has ambitious plans to extend its brand of luxury cinemas to Southern California.

Cinepolis recently opened its first U.S. venue in Del Mar, Calif., investing $8 million to create San Diego County's first luxury theater, where patrons can kick back in a leather recliner and press a button to order teriyaki beef skewers, sushi rolls or a glass of Thomas Hyland Chardonnay.

The eight-screen Del Mar theater is modeled after similar high-end movie houses that Cinepolis operates in wealthy areas of Mexico, Brazil, Colombia and other Latin American countries, and is the first of several that the chain intends to open in Southern California.

Three additional theaters are planned for next year, one currently under construction in Carlsbad, and two others in Orange County, in Laguna Niguel and Rancho Santa Margarita. Cinepolis also is negotiating deals to open theaters in at least two Los Angeles County locations: in Westlake and in the Westwood area, Wellman said.

The article brings up a interesting fact of why people stay away from the multiplex.

The expansion also comes at a time when theatrical attendance in the U.S. and Canada has been stagnant the last seven years. So far in 2011, the number of tickets sold has fallen nearly 6% and revenue is off 4%, [The people who "know this business" have yet to comment on this fact - Kev] despite higher ticket prices. Analysts have pointed to several factors, including a weaker crop of movies, fewer studio releases, higher ticket prices and longer-term challenges, such as consumers spending more time playing video games and watching movies in their homes.

"It sounds like a risky endeavor to me, given the current economic climate and the fact that there are more [entertainment] choices available to consumers," said Bruce Austin, a communications professor at the Rochester Institute of Technology. "Movie theaters with an $8 ticket are finding it difficult to entice people. If it's $19, the food better be good."

But Wellman contends many American consumers have stopped going to theaters because they are "run down" and "dated," and that they would be willing to pay a premium for something far better than what they would experience at the local multiplex.

"We're setting a new standard," he said, munching on a chicken Caesar salad wrap in a cafe at the Del Mar theater. "It's more like first-class entertainment."

Theaters have been experimenting with new ways to lure customers by offering VIP services, such as reserved seating and in-theater dining. ArcLight Cinemas, a subsidiary of Los Angeles-based Pacific Theatres, has been expanding its premium cinemas, most recently to San Diego. Australian luxury theater operator Gold Class Cinemas brought its high-end brand to Pasadena nearly two years ago, serving gourmet food and drinks to patrons watching movies in plush recliners.

Cinepolis is hoping to capitalize on the trend that has worked well for the circuit in other countries. The theater chain pioneered its luxury cinema concept in Mexico City in 1999 and has since expanded to about 150 screens across Latin America.

I think movie going is going to morph into something like what happened to legit theater where its more of a premium experience. You still have theatres in major cities but they cater to more of a high end clientele. While I feel there will still be standard movie theatres for many years to come you will start seeing more and more of these premium experiences popping up as the economy improves.