Brothers put their love of film into Montgomery theater business

When Jon and Brent Goldstein were kids, their parents often shuttled them to Montgomery Mall to take in the latest movie. Now that the brothers are all grown up, they have turned their love of film into a business, taking over the same theater they went to as boys.

But staying competitive in an industry dominated by mega-chains, such as AMC and Regal Theaters, can be challenging for independent players such as the Goldsteins. Their three-screen theater, simply named the Movies at Montgomery, is about five miles from Regal's 10-screen Cineplex and AMC's seven-screen offering, which are blocks apart on Wisconsin Avenue. What's more, all three sites are first-run theaters, showing the latest Hollywood blockbusters.

The Goldsteins, however, are unfazed. Since opening their theater five months ago, the brothers have made a successful go at drumming up business with a number of community-oriented events, including a showing of the "Karate Kid" remake to 600 students of a local kung fu school. It certainly doesn't hurt that tickets at the theater, ranging in price from $6.75 to $8.50, are about $2 dollars cheaper than the chains charge.

"The theater business is neighborhood retail," said Jon Goldstein. "For a theater company with 1,000 locations, it's very tough to put a system in place that is unique to the neighborhood. As an independent, I can tailor every theater to the neighborhood."

At Montgomery, young adult and children's movies garner the most demand, so the Goldsteins only show films targeting that audience. A few weeks back, the brothers presented the "Twilight" trilogy to a packed theater.

"Indie operators have to differentiate themselves by really working the local market and their knowledge of it," said Patrick Corcoran, director of research for the National Association of Theater Owners. He noted that many of the organization's independent members try to maintain intimate relationships with customers through mailing lists and social media -- tactics that the Goldstein are employing.

Having developed a handful of movie theaters over the past seven years, Jon Goldstein is well versed on theater operations. Besides the theater he owns with his brother, he has three other sites in the Northeast and Midwest. Last November, some of Goldstein's colleagues mentioned that the Westfield Group, the owner of Westfield Montgomery, informally still known as Montgomery Mall, was looking for someone to assume the lease for its theater. Goldstein, who lives in Detroit, contacted his brother in Bethesda and the two set out to secure the deal.

Passing hands from operators, such as Odeon Cinemas and P&G, the theater was well worn and in need of a facelift, Goldstein said. He and his brother reached out to 20 of their friends in the area, who had all spent Saturdays at the theater, and raised nearly $150,000 for renovations.

All together the project cost $400,000, sourced from other investors, the brothers and Westfield, which contributed 7 percent of the total. The brothers upgraded all of the sound and projection systems, replaced the ratty seating with leather chairs and made the theater 3D-capable.

Westfield has plans to carve out space from one of the two Macy's at the mall for a cineplex, but a definitive construction timeline has not been set. "We have a five-year lease here, with a guaranteed time frame of about two years. And that's when [Westfield] thinks they are going to get their ducks in a row. So hopefully we can be their partner," Goldstein said.

For now, Goldstein is focused on expanding the business at his three-screen theater, which he anticipates will do 125,000 in ticket sales this year. In June, the theater sold 8,485 tickets, earning $64,000 in box office and concession sales.

Despite coming off a record year in 2009, with more than 1.4 billion admissions and $10.6 billion in revenue, the theater industry is 3.4 percent ahead of last year's ticket sales pace, according to the theater owners group. The business is virtually recession-proof -- in six of the last eight downturns, box office sales actually increased.

Still, the theater business is sensitive to seasonal activity, experiencing highs in turnout in the summer and dips in sales in the fall. Goldstein has found this ebb and flow a bit off-putting, but he's adjusting. "If we have a huge month and do $100,000, I know that in two months it may be $10,000. I can see where it's going to go and I can plan accordingly," he said.

Moviegoers who have headed to Montgomery for years generally continued to do so, despite the theater's downturn, Goldstein said. But he suspects there is a healthy portion of former patrons who stayed away. The challenge is getting them back and drawing new crowds. Considering that the Goldsteins have seen a 60 percent increase in ticket sales since opening, they may be on their way.