The reel deal for hard times

During the Great Depression, it was estimated that up to 60 million people in the United States went to the cinema every week. It was all part of their attempt to escape the grim reality of an economy disintegrating before their very eyes. During the lean years of a recession, it is taken as a given that cinemas enjoy something of a boom. That is one of the main reasons why Showtime, a recently formed company opted to spend €3 million building a new six-screen cinema in Ashbourne. One of the driving forces behind Showtime is James Towler who has been in the cinema business for just over 10 years. He accepts that no business is completely immune to the harsh winds of an economic downturn. However, he adds, if you were looking for a sector that enjoys something of a boom amidst a full-blown recession, then the film industry is it. Added to that is the attractive reality that, in a downturn, there are tangible compensations for entrepreneurs looking to build and expand. "They may not be recession-proof but cinemas are certainly recession ring-fenced. When people are upset and are fed up with the world, they look for a bit of escapism. Cinemas are doing incredibly well at the moment, cinemas haven't done this well since the Great Depression," he said. "I just think it's a great time to do it because, as rents fall away, in recessionary times the setup costs become more reasonable, architects aren't quite as expensive as they were, builders are prepared to have a look at their books again so you can actually get up and running at a cheaper cost than you could have done in the past." Someone who tends to look on the glass as half-full rather than the other way around, Towler set up Showtime with property developer Jimmy Flynn. They opened the Ashbourne cinema just over two months ago and now employ 25 people at the Ashbourne Retail Park outlet, all part-time, the majority of them students. For Kelly and Flynn, this is a time of opportunity. The entrepreneurial duo have let it be known they have a war chest of €20 million and intend to spend this on opening up a series of cinemas. Exactly where Towler is reluctant to say just yet. What he does say is that they could set up "anywhere" there is a good-sized population. "We built the cinema in Ashbourne as a model, to see if we could make a model that we would be satisfied with. It certainly is our intention to have another five locations within the next five years," he added. Neither Towler or Kelly are from Meath nor live in the Royal County yet they did see Ashbourne as an ideal location to launch Showtime on its maiden voyage. For a start, they felt, there was a growing population that needed to be served with a modern cinema with research showing that in 2006 Ashbourne was one of the fastest-growing areas in the country. The logic was that if Showtime provided a high-quality format for people to see the likes of George Clooney, Meryl Streep, Brad Pitt and Julia Roberts up close and personal, the punters would show up in numbers. So far Towler says this has proven to be the case with good numbers coming through the doors. Figures compiled by Charlton Screen Advertising, which tracks cinema admissions in Ireland, show that, in May alone, a whopping 1.4 million tickets were sold at the box office. A good chunk of the €3 million invested in the Ashbourne venture has been spent on what Towler describes as "state-of-the-art equipment". That includes reclining "stadium" seats, 3D facilities and full digital projection. "It's got the biggest screens in Meath by a long shot," he adds. A good part of his 10 years in the business was spent as operations manager with the Storm chain of cinemas. Storm employed up to 300 people, he points out, and had a turnover of €25 million. The secret of getting customers through the door is, Towler believes, the same for cinemas as any other business. It's all about providing a good quality product and giving the customer some bang for their buck. "Treat the customer with respect. If you want to be successful, you have to get people in and give them a product that meets and beats expectation," he says. "In a small town like Ashbourne, people will maybe have gone to a cinema in Navan or wherever. Not being disrespectful to Navan or anywhere else, but if you walk into my cinema, you'll see exactly what's been spent on it. We seek to beat the expectation of the customer at every possible opportunity - that's what gets you repeat business, that's what keeps your customers happy," he adds. While price of goods has steadily decreased since the start of the recession, Towler says that those in the cinema sector have had to absorb costs specific to the sector. "The biggest cost for us is what we called the film rentals. People not in the business may not know that we don't buy the films, we rent them from the film renters. That is going up and up. What people don't realise is that up to 70 per cent of the price of a cinema ticket goes directly to the film renter, not to us. You pay €9 or whatever for your ticket, but €6 of that goes directly to the film renters; we don't see any of that." Towler says that, as a businessman, he will be voting 'Yes' for the Lisbon Treaty, seeing it as the "only option" that can be taken at this stage as Ireland struggles to recover from the worst recession since the 1930s. Towler knows that Showtime is taking on established players in the cinema world but he remains confident the new outlet in Ashbourne can offer a form of up-market escapism - just what people crave in hard times.