Vancouver’s last independent theatres are diversifying to survive the industry’s mounting pressures.
Only four independent theatres remain, with most venues either having been acquired by Cineplex Inc. (TSX:CGX) or being torn down to make way for new developments.
While the reasons for the industry’s difficulties may differ depending on who you ask, the current climate is undeniably challenging, forcing owners to explore new revenue streams to stay afloat.
The Rio Theatre and Dunbar Theatres are the only commercial independent venues left in the city, along with the non-profit Vancity Theatre and charitable Pacific Cinematheque.
Once a city with thriving competition and over 50 independent neighbourhood theatres in the 1950s, the shift from single-screen operations to multiplex cinemas dramatically triggered the decline of independents, said Vancouver International Film Festival (VIFF) founder Leonard Schein.
His company, Festival Cinemas, once operated iconic venues like the Ridge Theatre, Park Theatre and Fifth Ave. Cinemas, all of which have either been demolished or had their leases taken over by Cineplex in 2013.
Cineplex squeezes independent theatres
Cineplex controls around 80 per cent of the Canadian market, with their expansion playing a big part in the decline of independent theatres, according to Schein.
“They don't like competition,” he said. “That’s one of the reasons they wanted to buy the leases of my theatres, because I was their main competition in Vancouver.”
Following Cineplex’s takeover of Odeon and Famous Players, the remaining 20 per cent of the market is split between Alberta-based Landmark and theatres in smaller towns where Cineplex doesn’t exist, he added.
“They put pressure on distributors to wait before they release a film to an independent theatre. Independent theatres across Canada have gone to the departments for antitrust, and so far, they haven't been successful.”
The controversy doesn’t end there: The Competition Bureau of Canada sued Cineplex in May 2023 for allegedly advertising misleading ticket prices.
The company was accused of drip pricing—advertising movie tickets at lower prices but then charging a mandatory $1.50 online booking fee.
On September 23 of this year, the Competition Tribunal ruled in favour of the bureau, ordering Cineplex to pay a penalty of nearly $39 million.
Rio Theatre owner Corinne Lea agrees that the company’s practices are hurting the last remaining movie theatres.
“When I tell Americans that Cineplex has that large of a monopoly, they cannot believe it,” she said. “There's nowhere in the world that would allow one company to dominate an industry the way Cineplex does.”
She added the rise of streaming services is also drawing eyes away from the big screen, further tightening the frame in which to show movies in a timely manner.
“Movies are streaming faster and faster nowadays, so the theatrical window is shrinking,” she said. “Most independent theatres have a hard time getting their hands on current content, to the point where we have to wait sometimes up to six months just to play a current movie.”
However, Dunbar Theatre owner Ken Charko says his theatre doesn’t take issue with Cineplex. According to him, one of the reasons other independent theatres have these issues is because of their programming schedules.
“In [Lea and the Rio’s] programming schedule, although she'd like to play Beetlejuice, she'd like to play Beetlejuice just five or six times, she doesn't want to commit to two weeks for it,” he said. “Whereas what I do is take the hit and play Beetlejuice for two weeks solid.”
In recent years, the Rio Theatre has diversified their operations to survive, offering a combination of live events and movies.
Charko, who is also the vice-president of the Motion Picture Theatre Association of BC, added he hasn’t had a problem with Cineplex blocking his distribution because of his relationship with the studios, and his willingness to play their product for longer periods of time.
Property taxes pressure bottom lines
Another predominant issue facing local theatres is high property taxes, informed BC Assessment taxing properties based on their highest possible future use, not their current use.
“Movie theatres pay taxes on condos that don't exist above them,” said Schein. “At the Park Theatre, when I left, I was paying more in property taxes than I was paying my landlord for the rent.”
Having to undertake these large expenses puts a greater financial strain on theatres, especially those that don’t own the land and are pressured by landlords to make way for developments.
In 2018, the community rallied in a campaign to buy out and save the Rio Theatre from being demolished, raising over $3 million for a down payment. The City of Vancouver also played a significant role in saving the venue by approving a $375,000 grant.
Owner Lea says property tax reductions and exemptions would be beneficial in helping to preserve theatres and other artistic institutions.
“I think all arts organizations should be tax exempt because we do it for churches,” she said. “A lot of people have moved away from organized religion; cultural venues have become their place of gathering.… I think that would make a huge difference.”
However, according to Charko, the underlying issue is revenue, not expenses.
“What we need is more Barbie movies,” he said, adding that big blockbuster films help draw crowds.
The Dunbar Theatre, acquired by Charko 25 years ago, experiences peak business activity and profitability in the later months of the year, but these numbers have dwindled as of late.
Big Hollywood releases have downsized from around 120 a year to 90, with a significant decline in November releases ramping up to December, said Charko.
“What we need to happen in the industry is for Hollywood to realize what they're good at, and that's to make movies that people enjoy, and they're not where they should be.”
Diversify to survive
Some local theatres have found success in sourcing a more diversified revenue stream.
The Dunbar Theatre, for example, has worked to increase walk-in and delivery app sales, especially during and after the pandemic. Customers can order anything from popcorn in bulk to baked goods and doughnuts from the theatre’s UberEats page.
Pre-COVID walk-in sales would maybe total $100 a week, Charko estimated. This skyrocketed to $5,000 to $6,000 per week during the pandemic.
Those figures have declined, but sales remain above where they were pre-COVID.
Additionally, the theatre offers private rentals for corporate events and even weddings.
Still, Charko said it's been a tough year for all theatres in general, and added that the industry is still very much recovering “post-COVID.” His theatre has not yet recovered to 2019 revenue levels.
The Rio also live programming and events at their venue. Their diversification strategy also includes focusing on independent and lesser-known films. Old classics are also a big hit, with a recent 4K showing of “Paris, Texas” drawing around 400 people.
Another common practice is turning movie screenings into interactive experiences that invite guests to dress up or sing a along with a film.
“Our tagline at the Rio is an experience you can't download. So we're trying to consistently create that type of excitement that you can't get by just watching,” Lea said.
Despite the seemingly pessimistic future, Schein said he believes the industry has faced adversity in the past and will continue to persevere.
TV, he added, didn’t kill the theatre, though people at the time of its introduction speculated that it would.
“There’s something nice about the experience of seeing a film with a lot of other people, experiencing the laughter or the sadness. It’s a group thing, and we’re social animals, so I think theatres will still survive all these challenges,” he said.
—With files from Jenny Wagler
Story updated Oct. 16, 2024; Lea disagreed with some of Charko's characterizations of the Rio's situation, noting her second-run theatre faces different industry zoning challenges compared with other independent cinemas.
