Three Oregon movie theaters compare notes

A recent article in the Wall Street Journal shows that movie ticket sales are still lagging behind from prepandemic numbers. At the same time, one in three TikTok users say the app drove them to watch a movie in theaters, according to marketing research from the company. What has pandemic recovery looked like for Oregon theaters? Did Barbenheimer save some cinemas? To answer these questions and more we’ll hear from three different theaters. Loretta Miles is the owner of Salem Cinema in Salem. Rachel Flesher is the district manager of special events and theaters for McMenamins. And Steve Herring is the CEO of Living Room Theaters. They all join us to discuss how the pandemic has changed movie going.

This transcript was created by a computer and edited by a volunteer.

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. It has now been four-and-a-half years since the start of the pandemic. But a recent article in the Wall Street Journal found that movie ticket sales are still lagging behind from pre-pandemic levels. We were curious what this looks like in Oregon. So we’ve called up folks from three different theaters. Loretta Miles is the owner of Salem Cinema. Rachel Flesher is the district manager of special events and theaters for McMenamins, and Steve Herring is the CEO of Living Room Theaters. Welcome to all three of you.

Rachel Flesher: Hello.

Loretta Miles: Hi.

Steve Herring: Thank you.

Miller: Loretta, first – in Salem, what did you do when lockdowns shut down your business?

Miles: Well, on a personal level, I spent about a year and a half laying in bed crying. But on a business level of course, we just kind of were forced to pivot into a completely different direction. Originally, my audience was showing up in droves to buy gift certificates for when we got to open someday. But that went on so long, and was so robust, that I finally had to pull the plug on that because I was terrified of the fact that when we were eventually going to be able to open, that we would have no income at that time, that the income would have happened months before.

Miller: It’s so interesting you say that, because I remember at the time thinking wait a minute, this seems maybe good as a stopgap for a couple of weeks. But it’s not a business model. You’re just borrowing for the future.

Miles: Exactly. But I will say the Salem community really, really pulled through for me. People sent money, they stopped by with money, they sent encouraging emails. We of course did all the things that everybody else was doing. When we were eventually able to, we started doing private theater rentals to small groups, sometimes just to a couple. And we of course did our popcorn sales and concession sales through the door. And we prayed a lot.

Miller: But reading through the lines there, it seems like for your for-profit business, what got you through those years was the kindness, was just actual donations from people as opposed to people paying for services?

Miles: Absolutely. It was truly amazing, the number of people that came forward, and just made it very clear that Salem Cinema was a huge part of their life, and they did not want us to go away. I will forever be humbled by the response from the community.

Miller: Rachel, what about McMenamins? How did you navigate the pandemic, movie-wise?

Flesher: Also very challenging. Where we’re lucky is, we’re first and foremost, a restaurant. So we just kept going on that restaurant angle. We use some of our theaters as spillover restaurant space when everybody had to be six feet apart. But most of them stayed pretty shuttered though through that time, and just focused on the restaurant space.

Miller: I’m glad you brought up the restaurant piece of this because McMenamins, I think it’s a pretty well-known brand for most of our listeners, with brewpubs and restaurants and hotels, music venues and various kinds of repurposed sites in Western and Central Oregon. How do movies fit into your business model?

Flesher: It is just one small piece of what we do, but it is a really fun, amazing piece. We have places like the Baghdad, that’s the centerpiece, the jewel of our theaters, so to speak. In our properties, something like Grand Lodge or Edgefield, it is a small piece. But it’s great to have that option for our hotel guests and community members, people that live nearby. They chug along nicely.

Miller: And Steve Herring, what about Living Room Theaters. What happened to the Portland Living Room Theater during the pandemic?

Herring: Mirroring what Loretta and Rachel have said, it was pretty awful in March. We knew it was coming before the lockdown occurred. Our business had declined by 50% each weekend successively before the governor shut down the state. And so the public was panicked, and something had to change. We then, for us in downtown Portland, end of May for almost a full calendar year, sort of dealt with the ongoing riots and protests that were occurring in the downtown area, which further exacerbated problems for us.

We tried working with the governor’s office to reopen in some capacity, just any capacity to keep things going. We ended up doing online crowdcast Q&As with our clientele, doing as many things as we could in person. We did private screenings with limited attendance, six to eight people in an entire auditorium of people they knew. Obviously, instituted all of the health and welfare checks and things that everyone did, and almost look silly today looking back.

But it was really the federal government, the SVOG [Shuttered Venue Operators] grants, that if not for that, we would not be here today. And most independent cinemas across the nation, not the chains, but the most of the independent cinemas applied for and got SVOG grants. And that was a significant difference in viability to still be here today.

Miller: Loretta, what was reopening like? My understanding is it was a stop and start, including some significant stops. But what was that year or so like, slowly coming back?

Miles: Well like Steve, I chose to actually close Salem Cinema, I think it was just the day before the governor said we had to close. I was looking at the same declining numbers and paying close attention to what the CDC was saying. We put up on our marquee: “Closed because we love you.” And that was how I felt.

We closed on March 16th of 2020. We were completely and totally closed until October 23rd. We got to open again for a very short brief window there. We were shut down again on 11/16, when COVID numbers rose again in Marion County. From 11/16 of 2020, we were closed until 3/12 of 2021. We were closed again on 4/30 of 2021. And we have now been consistently open since July of 2021.

So it was a lot of stop and starting. I’ll never forget the first weekend that I got to open though, back in October of 2020. And of course, it was to limited numbers, and people came in wearing their masks. And person after person would stop at the door and start to lower their masks so that I could see who they were. And the amazing thing was I didn’t need to see their full face. I had come to know my patrons so well over the years that I could recognize them simply by their eyes. And it was so emotional for me to know that I had created that connection with my community, and to have them show back up in support of what we could do, on a very limited basis at that time.

So each time we got shut down and reopened, it was sort of reinventing the wheel. We had to jump through a lot of hoops with enforced spacing and limited numbers. We couldn’t sell concessions for a while, all of those sorts of things. Like Steve said, it really was the SVOG grants. I got a few small grants before that, but once those SVOG grants came in, I could then play catch up on rent. And it really is only because of that as well that Salem Cinema is open at this time. The donations from my patrons that I talked about earlier, they were beginning to dwindle by the time we got to reopen. I think people were just focused more on taking care of themselves at that point than taking care of a business.

Miller: Rachel Flesher, how are ticket sales right now compared to pre-pandemic?

Flesher: Things haven’t quite hit that level overall. We just don’t have the same consistent content. But when there is something good, it’s been great. “Deadpool” did great. Last year, “Barbie” was as good as “Star Wars” for us, “The Force Awakens.” “Beetlejuice” is looking really good for this weekend. So things are feeling pretty good.

Miller: I’m curious Steve, what about you, how are ticket sales overall compared to pre-pandemic times?

Herring: Well, in preparation to appear here, I did some crunching of numbers for not actually our business, but just the story that tells the story, which is as Rachel alluded to, the number of releases annually by the major studios. Pre-pandemic, in 2019, there were 107 releases in both 2018 and 2019. Last year, there was 79. This year we’re on pace for 68. And in 2022, we [were] on pace for 67.

And our sales sort of reflect that in an equal number. Our ticket sales overall are down about 30% in terms of attendance. We have limited operating hours, we’re not open 11 a.m. to 11 p.m. or midnight like we were pre-pandemic during the week. The weekends here, we have the weekends’ normal hours, but Sunday through Thursday, very reduced hours. So that obviously impacts how many shows we have, how many people you can get in the door. And we’re trying to claw our way back to that operational opening. And downtown is the key impediment for us right now for our theater.

Miller: Loretta, what was the “Barbenheimer” phenomenon like for you, that “Barbie” and “Oppenheimer” time last summer?

Miles: It was days of glory. It was the first big audiences I had seen since Oscar season 2020, just leading up to the closures. It was wonderful to see full houses again. Unfortunately, it has not stayed that way. I get the occasional movie that people really respond to. But overall, my attendance is way down. On a good week, I’d say we’re at about 60% of where we were prior to the pandemic. And on a bad week, probably down to about 40%. So averaging maybe about half the ticket sales that we used to be able to get.

Technically, Salem Cinema is still living on SVOG money. I still have grant money that I feed back into my account from time to time, and that makes up for the losses.

Miller: You still just have a little piggy bank of pandemic relief money that you can dip into?

Miles: I do. A lot of my colleagues, once they got those SVOG grants, they invested in upgrades for their theater and that sort of thing. I chose to play it safe and I held back on some money assuming that we weren’t gonna just automatically bounce back. And I’m so thankful that I made that decision, because most months I’m still dealing with the shortfall when it comes to just basic overhead, and then you build in the cost of doing business with the studios, and the distributors, and concession wholesale prices. Most months, I’m still not breaking even.

Miller: Lucy Garrick on social media wrote:

“I absolutely love the movie theater experience – being in the dark in a comfy chair with a great sound system. Sadly, I have gone once, because the movies coming out now are either formulaic, sequels or remakes. Same plots, different circumstances. Mind-numbing boredom, apocalyptical violence. Very little originality. Not worth the $10 movie ticket.”

Steve, one lesson you could take from “Barbie” and “Oppenheimer” is that if the content hits right, if the studios create something that audiences really want to see, then people will buy movie tickets in huge numbers. But is that a replicable model, or a once in a generation event?

Herring: It’s kind of like going back to “The Blair Witch Project” years ago, that made so much money with so little budget. I think that culturally people connect with things from time to time. Obviously this year, it’s probably going to be “Deadpool” with its billion-plus dollar global gross. And it’s an interesting thing because what’s happened is the attendance has shifted entirely, so that the market share of any given year post-pandemic is largely eaten up by the top 10 movies of the year. So everything below the top 10 makes up some minor percentage of what’s in theaters.

Dave, I’d love to just mention one thing. You had Senator Wyden on Think Out Loud recently to talk about the grocery store merger between Kroger and Safeway. And our industry was impacted by a similar merger situation – it was Walt Disney who swallowed up 20th Century Fox. And I can tell you that looking at the number of thousands of workers who lost their jobs, good people who’d worked at Fox for decades, and the number of movies that are getting greenlit today has suffered. And it just speaks to the fact that the more the government and we allow mega corporations to keep getting bigger, it harms consumers and it definitely hurts small business.

Miller: Rachel, I’m curious because we haven’t talked that much yet about studios, although Steve has mentioned the huge drop in production, or distributors. How has your relationship to both of them changed over the years, especially post-pandemic?

Flesher: I don’t personally deal with the studios too much. We do have a booker that does. But they fluctuate, depending on who’s in charge, is what I have noticed at different times from talking to him. Lately though, we’ve been running into a lot of forced long deals. Like you can get this movie, but you have to run it for weeks type of situation, which we’ve then opted out. All of our theaters are single screen. So being forced to carry something for a month doesn’t really work out for us, unless it’s “Barbie.” So that’s been something, I don’t know if you guys have felt that, but a lot of really long forced deals have been the norm lately.

Miller: Loretta, has your programming changed since you reopened, has your relationship with distributors?

Miles: Yes, a lot of changes. I do wanna address what the person who wrote in said real briefly, and that’s she’s going to the wrong movie theater. She should be seeking out theaters like mine, that are arthouse theaters. The majority of my content is from small independent distributors, as opposed to the studios.

That being said, and to address your question to me, pre-pandemic, I showed very few studio films. They usually went to the Regal Theaters in Salem. And there was this kind of unspoken agreement between studios, and Regal, and Salem Cinema, that movies would either go to Salem Cinema or they would go to Regal. It was very, very rare that we showed at the same time.

Now, whenever I show a studio film, it’s on all the other screens in Salem. And frequently, even with some of the smaller distributors that I could always count on to get exclusives from, they’re hungry too. And so they’re putting them on Regal screens also. What I’m finding is it’s rare that I’m not competing with one of the largest film exhibitors in the world. And needless to say, that impacts my attendance, always. So I do have some audience members who will always choose to come to my theater. But I think it just kind of depends on the day of the week, and what the movie is, and where they wanna go, and what showtimes are.

So yeah, it’s really changed a lot. It’s become very difficult. I’ll agree with what Rachel said, to take on the larger studio films, you do get locked into these longer runs. I, for instance, waited until yesterday to book “Beetlejuice Beetlejuice,” because I needed to see if I was gonna have room on screens for the next several weeks to be able to plan to hold it. So I am opening it. Again, it’s opening on every other screen in Salem. But I’m happy to be able to get to show it.

Miller: And Steve, what has the shrinking time between when a movie would only be in theaters to when it’s available in people’s homes… sometimes there’s no difference, it happens at the same time, simultaneous releases. What has that meant for your business?

Herring: To roll back to the big change within the industry, with less titles coming out, the multiplexes of the major corporations have more screens than we do. So they put the big movies on all of their screens, or a majority of them, which means that everyone sees movies in less time, or they get crowded out, the oxygen is sucked out of the market by a “Deadpool.” And there’s lots of other great movies that are playing that no one sees. And when no one comes, we can’t hold them because they’re not making any money. And so that has shortened the duration of many, many, many runs compared to what it would have been pre-pandemic.

Miller: Steve, Loretta and Rachel, thanks very much.

All: Thank you.

Miller: Steve Herring is the CEO of Living Room Theaters. Rachel Flesher is the district manager of special events and theaters for McMenamins. And Loretta Miles is the owner of Salem Cinema.

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