Luxury Theaters Restoring Glamour to the Big Screen

In a world of souless mega cinemas filled with cheap popcorn, the upscale Astor cinema chain targets the 30-plus crowd – and is growing fast.
The plush, spacious Zoo Palast movie theater in Berlin.

Last year was a dismal one for movie-theater box offices in Germany. Even mega hits like “The Hunger Games” were unable to shore up what has become a downward trend in cinema attendance.

Industry figures show that the number of German moviegoers has been on a steady decline, from 135.1 million tickets sold in 2012, to 129.7 million in 2013. The German Film Board is expected to report a further 5 to 6 percent drop for 2014 later this week.

Revenues are likely to have slipped below the €1 billion ($1.13 billion) in 2014 for the first time since 2011.

One man in the movie theater business is not complaining, however.

Hans-Joachim Flebbe, who owns the Astor chain of luxury theaters in Germany, is apparently unaffected by the crisis in the industry.

"We're experiencing double-digit growth rates," he said – at least in markets where there is still room for that much growth.

A coat-check service, luxury, adjustable seats and a seat-side food and beverage service are all part of the experience.

In Berlin, his theaters are almost always sold out. He estimates that his chain generates about €30 million in sales annually.

"Cinema loses its soul when you treat it as nothing but a profit-making machine," said Mr. Flebbe, who stirred up the market in the 1990s when he established Cinemaxx, a German chain.

Cinemaxx is now owned by two Canadian pension funds.

The big German cinema chains, including Cinestar and UCI, aren't investing enough, said Mr. Flebbe, who believes moviegoers over 30 will eventually stop going to theaters that cut back on equipment and staff.

Betting exclusively on young audiences is risky, he said, as younger viewers are watching new films online, both legally and illegally. He has noticed this phenomenon in his own children, who only go to movie theaters to see blockbusters such as "The Hobbit."

Mr. Flebbe, whose company is called Premium Entertainment GmbH, decided to target the over-30 year old crowd instead.

He runs his theaters under the Astor name in Berlin, Cologne, Munich, Frankfurt and Hannover, where state-of-the-art technology, tasteful design and welcome cocktails are a given.

A coat-check service, comfortable, adjustable seats and a seat-side food and beverage service are part of the experience. The Astor Film Lounge in Berlin serves coffee and cake during matinee showings.

The boutique chain's flagship theater is Berlin's Zoo-Palast, where the erotic movie "Fifty Shades of Grey" will have its European premier on Wednesday, as part of the Berlin Film Festival.

Mr. Flebbe's customers are more than willing to pay for the experience – the average ticket costs €15 in his theaters.

The theaters are well staffed, to avoid long lines at the ticket counter or coat check. Not surprisingly, personnel costs are one of the biggest expenses for his chain.

Food and beverage consumption accounts for a third of revenues.

Mr. Flebbe expects to have recouped his investments, including the €10 million he spent to renovate a theater in Hannover, within five years. He said it only took two-and-a-half years for Berlin's Astor Film Lounge to become profitable, after opening in 2008.

Plans are also afoot to open a new theater in Hamburg's Hafencity next year, and more theaters are planned for Wiesbaden and Stuttgart.

 

Kai-Hinrich Renner reports for Handelsblatt from Hamburg. To contact: [email protected].