by Daniel Loria
The trend is impossible to ignore. Nearly every investor presentation from North America's biggest exhibition chains highlights enhanced seating options as the best way to maintain a competitive edge in the market. Seating upgrades are quickly becoming a staple of today's exhibition world as both large circuits and local players alike compete in an arms race to enhance customer comfort. Luxury seating formed part of Marcus Theatres's $50 million investment in premium features across its circuit, a push that also included large-format screens and expanded food and beverage concepts. The company plans to continue expanding its seating options in 2015 after installing its DreamLounger premium recliners at eight of its theaters across six states this year. AMC is crediting recliner seats as a catalyst for enhancing the productivity of existing assets after average attendance in theaters with premium seating options went up by 76 percent despite a seat loss of 62 percent. The company has deployed recliner seats across 505 screens in 44 locations. Regal, the largest exhibitor in the United States, plans to have recliner seats at approximately 25 sites by the end of year.
Seating manufacturers who contributed to this story all noticed an uptick in interest toward luxury seating around the turn of the current decade. Seating Concepts is a fifteen-year veteran in luxury-seat manufacturing but only began to see more of an emphasis in this type of offering over the past three years. "The concept was popular among exhibitors already active in premium offerings, like Cinepolis and iPic, but I started noticing a more widespread appeal after AMC installed luxury seating and other players saw their success," admits Marixa Flores, cinema sales manager for Seating Concepts. Dolphin Seating had a similar experience with its premium offerings. "Our factory has been making luxury seating for the European market for many years," explains Dolphin Seating's Sam Snell. "Now that the U.S. market has become interested in luxury cinema seating over the last few years, we started focusing on the requirements of luxury seating and recliners in the U.S."
Krian Cinema is a relative newcomer to the luxury-seating scene. The company began developing seating this year after noticing that premium offerings were more than simply the latest fad. Rob Poindexter, international sales manager for Krian, points to the central role that luxury seating has taken in the exhibition world. "The reality for most theaters in the current marketplace is either do it now and keep the market share you have or let your competitor do it first and lose some of your market share to them," he says. The stress of keeping up with the competition has especially affected smaller exhibitors still recovering from the costs associated with the digital conversion. After devoting a large investment to keeping up with larger players at the projection booth, local exhibitors are now facing the challenge to upgrade their seating in order to maintain a competitive edge. Krian is marketing itself to these exhibitors with a low down payment with a per-admission-ticket revenue-share program, offering financing as low as $99 down with 50 cents per ticket sold. "Pretty soon, most theaters will be faced with a choice," continues Poindexter. "Either make these seating upgrades or be relegated to a discount-theater status."
Implementing luxury seating comes with its share of challenges for exhibitors. Marixa Flores from Seating Concepts approximates that about 60 percent of a typical auditorium space is reduced with the installation of full recliners. Richard Murphy, president of Stadium Savers, has ample experience dealing with both new constructions and retrofits for exhibitors who want to install enhanced seating alternatives. Murphy gets to the point when advising exhibitors on their options. "Luxury recliners require more horizontal space than the current ‘standard' recliners," he says. "This added space requirement will widen the established floor/platform dimension. As a result, the concrete floor/platform will need to be adjusted with additional concrete. Two important issue come to light: First, will the existing structure allow the introduction of the additional weight? And two, the widening floor/platform will be expanded, preferably with lighter-weight material. Lightweight foam is a good material for establishing the floor/platform configuration with less use of heavy concrete." Murphy says he believes that middle-sized theaters work best in incorporating recliners, while clarifying that any size auditorium can be converted to incorporate enhanced seating. "Large theaters would be somewhat less desirable to widen because of the greater loss of seats. The mid-size theaters are the most desirable because of less total seat loss with a more intimate environment. The small theaters would be the least desirable, but can potentially be marketed as specialty screens."
Gaylord Stanton, VP of sales at First Class Seating and a proponent of the concept, cites costs, occupancy rates, and competition as prime factors to consider before making a decision. "Only upgrade to luxury seating if you are in a competitive market," advises Stanton. "The loss of seats could have a negative effect, and the investment may be very difficult on an ROI basis."
For Stanton, luxury seating has gained popularity in U.S. auditoriums because of an ironic cyclical dynamic between the home media and theatrical markets. "For years now the home-theater market has been trying to bring the movie theater experience into the home," he says. "Now, exhibitors are bringing the comfort of home to the theaters." But the seating conversation doesn't end with rocker backs and recliners, however, as immersive and interactive seating continues expanding its presence in the United States. These options look to bring an entirely different dimension to the theatrical experience.
"The cinemas and the studios are in a constant effort to drive people to the theaters. They are battling against ever increasing home-based and mobile-based entertainment options and are constantly looking for consumer-driven enhancements and technologies to make the theater experience a destination of its own and keep people coming back, as well as drawing new people," says Alison Jamele, president of MediaMation, a leading manufacturer of 4D products. The company's Twitter hashtag goes to heart of the matter: #YouCantGetThisAtHome. "Real 4D Motion EFX theaters such as ours add a tremendous value and excitement to the moviegoing experience that enhances the visuals, audio, and story to bring people into the movie like never before."
A panel on the topic at last year's edition of ShowEast outlined the concept's mission-to stand apart from existing technology as the emerging premium format on the big screen. "Immersive cinema should involve more than just sight and sound; a true immersion comes from a multisensory experience," said Theodore Kim, SVP, head of theater development and relations, CJ 4Dplex Americas. The company has a strong international presence in key markets like Japan, Russia, and Mexico.
Angela Killoren, senior VP of marketing at CJ E&M America, can remember when she started noticing increased interest for the format in the United States. "2013 was the first year we had a booth at CinemaCon," she recalls. "I think it helped to have a booth sitting next to a lot of the very large companies that work with exhibitors around the world, and it was when our partnership in Latin America with Cinépolis was fairly advanced. Sometimes what's happening in Asia can seem quite foreign and look like it might not translate directly to U.S. audiences, and perhaps considering that Latin America is closer geographically and maybe culturally, it started seeming more tangible."
The format's overall success in Latin America can be considered the spark that led to its introduction to the U.S. market. "A story we love to tell is one of our Latin American customers that signed on for three theaters to be installed over the next 18- to 24-month period," recalls MediaMation's Alison Jamele. "One month after the opening of their first theater, they called us up and ordered four more right away!"
The reception north of the border has been just as positive. Enhanced seating alternatives form an important part of leading Canadian exhibitor Cineplex's commitment to premium offerings. "More than 40 percent of our box office revenue is derived from premium tickets, more than double our U.S. peers," says Pat Marshall, the company's VP of communications and investor relations. "Premium charges range from three dollars for 3D premiums to as much as 12 dollars for VIP Cinemas, depending on the day of the week. Guests really enjoy the variety of options we offer and the varying amenities that go along with them. Reserved seating has been a big hit in Canada." Among their premium offerings, Cineplex operates 11 VIP cinemas across Canada with seven additional locations scheduled to open by the end of 2016. Immersive and interactive seating is also part of Cineplex's strategy, with 21 theaters featuring D-Box MFX seats. The companies recently signed an agreement to add D-Box to 20 additional Cineplex locations.
Moving Image Technology is preparing to start shipping their new immersive-seating product, Cine-Sation, early in the first quarter of 2015. MiT originally approached talks with Korean-based company Acouve a little over a year ago to consider the possibility of a distribution deal. "We wanted to take it a step further as soon as we saw the technology and its advantages. We started positioning ourselves to do more than just distribution," recounts Joe Delgado, executive VP of sales and marketing at the company. "Because the product was developed in Korea, it needed productizing, and by that we mean for the Americas you needed to automate it. We also needed an American chair, a physical chair. The Korean chairs tended to run on the narrow side, cup holders were a bit smaller. Those were the things we started to discuss, negotiate, and implement. We automated the system and then went on to a sturdier processing platform. It runs off a processor that takes the time code from the DCP file, and that's where the effects come from." When it came to manufacturing a chair, MiT went with the experience of Irwin Seating Company to design the physical chair for Cine-Sation. "For me it was pretty simple: the criteria had to meet certain benchmarks," says Delgado. "A, logistically, we liked the fact they were in the middle of the country, that part just made sense. B, I've known [Irwin] forever, I've known the company for about 25 years. And C, as one of the leading seating manufacturers in the world, we knew that they could handle the engineering involved. There had to be a ton of back and forth on the engineering side to get the chair to accept and transmit the effect correctly. [Irwin] met all those criteria, so it was a pretty easy decision for us to make."
TremorFX is another company that has called upon seating manufacturers to help complement the physical design of their product. "One of the things that sets TremorFX apart is its lower cost for theaters," says Joe Sorenson, CEO of RedSeat Entertainment. "The price for tickets is set and controlled by the theaters, meaning there's no revenue sharing with TremorFX's parent company, RedSeat Entertainment. TremorFX chairs are easily installed and require low voltage, and we've partnered with some of the leading theater-seat providers to provide premium seating and maximum comfort for consumers. TremorFX has a patented processing technology that allows chairs to respond in real time, meaning the technology works with any movie the day it's released. There's no programming required, and the technology also works with live events and other media.
"We have worked to make retrofitting a theater with TremorFX chairs as simple as possible," Sorenson continues. "The voltage requirements are relatively low (one circuit per 10 chairs), and from there the only requirement is to run a data cable (cat5) from the projection room that connects to the electronics mounted on a riser behind the chairs. TremorFX chairs are also floor-mounted so they are easily installed the same as any other theater seats."
Dolphin Seating offers an intermediary solution for theaters that want to take a more cautious step into the expenses associated with interactive seating. The company's VIB product vibrates from the audio hooked up into the sound system and can be added to any Dolphin Seat model for $200. While the affordability of implementing interactive seating in a theater varies by auditorium size and product type, there appears to be few arguments from exhibitors who have embraced the format. "What we're seeing is that it's driving higher occupancy through the customers' interest in the format, and the surcharge is obviously driving higher revenues," says Angela Killoren. Whether the seat rocks back, reclines, or vibrates, it looks as if the focus on seating will continue to surge in the exhibition market in the coming years.