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Once numerous, few boutique movie theaters remain in the Peninsula

By Doug Ray, Joe Ciolli, Elyse Cummins, Christina Farr and Erik Lorig | 29 Mar 2011

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The famed Stanford Theatre in Palo Alto shown in 1925 at its grand opening. (Photo: Palo Alto Historical Association)

An affluent college town like Palo Alto is an ideal breeding ground for art house theaters. Nevertheless, attendance figures are down, and owners speculate that there is dwindling interest in the theater-going experience.

“Palo Alto and the Bay Area reflect the declining number of theaters at the U.S. level,” said Sally Gifford, public affairs specialist for the National Endowment for the Arts.

Gifford cited recent statistics from the Census Bureau, which reported that nonprofit theaters are struggling. In 2002, there were 22 professional nonprofit theaters operating in the Bay Area. By 2007, there were only 15.

Movie theaters are forced to compete for a decreasing customer base of wealthy and educated residents, who have traditionally kept them afloat through membership and donations.

It is not only nonprofit theaters that are struggling. National chain Landmark Theatres is in direct competition with CinéArts, a property of the larger Cinemark corporation. Both chains shows independent and foreign films.

“Attendance is down,” said Rachael Wordhouse-Dykema, manager of the Aquarius, a Palo Alto Landmark theater. “Landmark used to have four theaters, and, now, it only has two.”

The Peninsula was once filled with small movie theaters, but many have been converted for other uses or demolished.

View Boutique Theaters in the Peninsula in a full screen map

Boutique theaters also face competition from the growth of high definition technology. Moreover, the increase in illegal movie downloading has been a blow to all theaters across the country.

Wordhouse-Dykema said movie theaters have been hit hard in recent years. “It seems like the movie industry in general is sort of dwindling, and that’s why they are bringing out these fancy features, like 3-D and the other things that draw people outside of their homes.”

John Farr, film critic for the Huffington Post, and co-founder of a nonprofit theater in Stamford, Conn., said he feared that “smart people” increasingly expected to “sit there and be electrified” at the theaters.

Farr said art houses and nonprofit theaters cater to an older and more affluent audience. Big budget movies offer an escapist experience, while foreign and classic films are thought provoking. “Hollywood has been serving their mainstream young teen audience,” he said with a sigh. “They care about violence, explosions and comic books.”

Bay Area boutique theater owners agreed that their films do not have mass appeal. “We get a lot of students and seniors,” admitted Rebecca MacKnight, general manager of the Palo Alto CinéArts.

A box office clerk at the Stanford Theatre, who asked to remain anonymous, said, “On University Avenue, you’ve got Stanford students and educated people and people who can appreciate black and white movies, which is for some reason considered an obstacle to the public audience.”

Movie theaters must fight to survive by creating new experiences for their customers. But recent innovations have been met with varying degrees of success. While CinéArts regularly features live opera, Wordhouse-Dykema said the Aquarius Theater would not consider showing opera or live sports. She noted, “Our clientele doesn’t come here to the theater to watch the Sharks play.”

The Stanford Theater has fared better than its competitors. It has benefited from a donation from David Packard, and was restored to its former glory in the late 1980s.

“It’s a cathedral of cinema,” said the box office attendant. “It’s recreating down to the lighting in the projectors what the experience would have been like in the mid-1920s and early 1930s.”

He added, “That is the difference between the multiplexes and [this theater]. This place is about creating the experience.”

The Aquarius Theater

The bright marquee of the Aquarius lights up Emerson Street in Palo Alto. (Photo: Doug Ray)

The Aquarius Theater is a boutique theater located on Emerson Street just off University Avenue in Palo Alto that specializes in independent foreign films. A chain called Landmark Theaters, which owns over 20 theaters across the United States, operates the Aquarius.

Another boutique called the Guild, also owned by Landmark, is less than two miles away in Menlo Park. Wordhouse-Dykema, who manages both theaters, said that there is definitely adequate demand for both despite their close proximity.

Aquarius competes to attract the same demographic as other boutique theaters in the Peninsula. Wordhouse-Dykema believes that the Aquarius fits well into the more educated, upscale vibe in the surrounding community.

“The Palo Alto crowd really likes these artsy, intellectual films,” she said. “They go out to dinner, catch some foreign cinema. It’s a very high-brow experience.”

Despite the success of the Aquarius and Guild, Wordhouse-Dykema sees a downward trend in the movie-going experience. “Attendance is down, mostly because of the home theater trend,” she said. “A lot of people have huge theaters in their homes.”

Wordhouse-Dykema also noted that digital cable is cutting into the Aquarius’ profitability. Providers like Comcast have started making foreign films available at the same time that the Aquarius screens them.

To complicate matters further, the Aquarius competes against not only other boutique theaters, but also large multiplexes. However, Wordhouse-Dykema thinks that the theater does well to differentiate itself.

“We offer more intellectual fare than the bigger theaters,” she said. “We know a lot of regulars by name. And all our employees are willing to sit down and chat about what’s coming out.”

Wordhouse-Dykema said CinéArts bought the Palo Alto Square theater from under Landmark’s nose. She said the lease was near its end, and landmark was going to renew, but CinéArts made a quick purchase. “CinéArts is directly competing for our business,” she said.

But how exactly do boutique theaters like the Aquarius make money? Look no further than the concession counter.

“We make much more money off concessions than anything else, which is why prices are so high,” Wordhouse-Dykema said. “We make a very small percentage of the ticket price.”

She noted that the staff at the Aquarius tries to counterbalance these high prices with good customer service. After all, the theater is hamstrung by a lack of revenue streams. While multiplexes pad their profitability with pre-show advertising, this is a luxury many boutique theaters don’t enjoy.

A look inside the Aquarius (Story continues below)

Stanford Theatre

Palo Alto's Stanford Theatre is run as a non-profit organization. (Photo: Erik Lorig)

The historic facade and Egyptian-themed interior of the one-screen theater exist in their original form. People strolling the avenue have the opportunity to see original film posters in the windows outside and can then purchase a ticket at the single seated box office window.

Customers will notice the intricately designed tiles on the floor and the elaborately painted walls highlighted by chandeliers. Popcorn and beverages at the concession stand are priced lower than the tickets. Before the projectors start rolling, the theater provides a live organ prelude for the audience. After the music stops, the curtain opens and the stars of the silver screen come back to life.

Built in 1925, the movie house was close to being shut down after profits took a nosedive. It was only the generosity of David Packard in 1987 that saved the theater. The cinema retains its nostalgic roots. The theater showcases movies from the 1910s through 1960s.

The Stanford Theatre still makes no profit from its movie tickets or concession stands. In fact, in the age of $8 dollars for a large popcorn and $6 for a large soda, Stanford is the rare theater that charges only $7 for a ticket and $2 for a medium popcorn. (Story continues below.)

Stanford Theatre’s revenue now helps fund the restoration of other old films. An online history of the theater, the Palo Alto History Project, reiterates the film profits now go to restoring old film prints on highly flammable nitrate stock, which can run upwards of $10,000 dollars per film.

Listen to the perspective of the Stanford Theatre box office attendant

But just because it plays old films, it would be a mistake to claim the theater is strictly for those old enough to have been alive during the film’s original theatrical release. Packard told the San Francisco Chronicle that he resented the implication that seniors made up most of the audience. He said in one weekend, only 140 of 928 were sold to seniors.

The rise of multiplex theaters has forced many smaller theaters to close. This map includes the locations multiplexes, drive-ins and boutique theaters that have operated in the Peninsula in the last 100 years.

View Peninsula Movie Theaters (Past and Present) in a full screen map

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