Coming Soon, a 24-Plex Not So Near You

Meanwhile, the economics of a megaplex is "compelling," Newhart said. With 16, 18 or 24 screens, the traffic in and out is constant and the popcorn sales never stop -- yet the staffing costs are only incrementally greater than for an eight- or 10-screen theater. These complexes are also attractive to groups going out together, such as families that might want to break up to see different films and then reconvene afterward. And bigger complexes have enough screens to offer most current releases as well as some second-run movies on smaller screens -- another marketing advantage.

But the numbers still have to work. "It's not casual math," said investment executive Brain. "It's determined by density of population, transportation infrastructure, the presence of competition."

Between 1997 and 2000, movie theater operators moved blindly into the business of megaplexes without much regard to what would happen to the older theaters they already owned. The industry got stuck with too many screens, which put most of the major theater companies into bankruptcy. On top of that, some new projects the theater companies built turned out to be too large or too small for the markets they served.

But today, Brain said, the industry understands that a single screen needs 10,000 people within a 15- or 20-minute drive, depending on the market (for example, in California people will drive longer). So it would take an accessible market of 160,000 to support a 16-screen theater, which has helped quash the old notion that bigger is necessarily better. A 30-screen theater may work in some places, but it turned out that such large complexes often struggle with a dearth of movie titles to fill all those screens. Balancing the two elements -- traffic and titles -- is critical.

"Our feeling is the sweet spot may be 18 to 20 screens," Brain said.

Movie theater chains are employing economists to crunch these kinds of numbers and look for more building opportunities, and as they do, the ripple effect will be clearly felt in urban neighborhoods and smaller shopping centers with subpar theaters.

But losing a theater can have a profound impact on a community or a retail cluster, so it's possible there will be more stories out there like Gary Rappaport's in the years to come. The local retail developer bought the shopping center at Worldgate in Reston four years ago, just before Loews filed for bankruptcy protection and announced plans to shutter the nine-screen theater that anchored Rappaport's project.

Rappaport considered his options: For $1 million, he could renovate the theater, putting in larger, plusher seats and a new sound system, or, for "several million dollars," he could demolish it and turn the space into regular retail that wouldn't generate as much traffic for the restaurants in the center. It was an easy call. Now Rappaport isn't just a developer, he's a movie theater operator, hiring Phoenix Theatres LLC of Knoxville, Tenn., to help manage the venture.

"I've got a good stable place, it's a good experience, it's clean, it's well run, it's more community-oriented," Rappaport said. And though he says he doesn't make as much money as a chain-operated theater, having the movies benefits his whole development. He trains his staff to sell concessions hard ("Do you want candy with that?"), but he'll also let patrons bring in lattes from the nearby Starbucks, something a megaplex would never allow because it has to sell its own drinks to stay in business.

"Economically, my structure is different. I'm the tenant and the landlord," Rappaport said.

And he has learned something about operating a movie theater that has disappeared from the big-chain operations today, but which remains a big draw for individual and family theater owners: It's fun.

"It's a great business. I love it," Rappaport said. "Sometimes I'll go down there for a couple of hours, just so I can tear up people's tickets and say, 'Second theater on your left.' "