No biz like ShowBiz: Kevin Mitchell moves Dallas chain in new direction

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Cinemas Features

There’s no better way for FJI to kick off a promising new year for theatrical exhibition than with a story about a fast-growing circuit. With plans for four new locations in 2015, Dallas, Texas-based ShowBiz Cinemas provides a perfect example of key industry trends: premium large-format, immersive sound and picture, oversized leather seating, expanded self-service concessions, and full café/bars with multi-lane bowling and event rooms.

“We are very excited about the future of our organization,” says Kevin Mitchell, founder, president and chief executive officer of ShowBiz Cinemas. “Despite what you read in the papers, the theatre business is very strong today and will continue to be. The 2015 release schedule looks just unbelievable and very strong,” he asserts. “But you’ve got to embrace change and we have to stick together as an industry. I don’t believe that we necessarily have to reinvent the wheel, but you can’t get sucked down into a vacuum and bury your head in the sand on change either.”

Currently owning and operating 43 screens at five locations, Showbiz sees plenty of change ahead. This expansion will double the circuit’s size to 86 screens, with all four of the new sites–Baytown (10 screens, 14 bowling lanes); Houston, Beltway 8 and Highway 90 (12 screens); Houston, Canyon Lakes (10 screens, 14 lanes) and Lindale (10 screens, 14 lanes)–located in the company’s home state as well.

So, is regional strength Mitchell’s preferred business model? “While being a regional circuit is not my overall long-term plan, it’s certainly playing well for us,” he attests. “Quite frankly, Texas has not taken the economic beating as the rest of the country. Houston is one of the fastest-growing markets in the U.S. right now… There is more growth opportunity right here in our backyard.”

Mitchell is also “not opposed to looking at other markets throughout the country,” but he will not be looking at a sole location. “This doesn’t make sense. It’s more expensive to build and operate when you are looking at one-offs somewhere. So, our thinking is that we would find regions where we could manage two or three locations at a time.” Be it by taking over existing theatres or building anew, he adds, or any combination thereof.

Flexibility is something that Mitchell has proven time and again since founding ShowBiz Cinemas in 2007. “We started the company with the intent of doing nothing but new construction. When I went to get my funding for these builds, the banks did not question my experience. However, they had a problem with the lack of cash flow, because we had no existing operations. That prompted me to step back and buy some existing locations,” he recalls. “We bought two theatres that we believed were struggling. As we cleaned them up, we turned them around and then we went on to lease our third facility. Creating cash flow gave the banks the confidence to help us grow.”

In 2009, Waxahachie became the first newly built ShowBiz Cinema, which was followed by the takeover of the Kingwood location in December 2013. Also constructed from the ground up, for a variety of strategic reasons, Kingwood was originally part of Starplex Cinemas. (For a detailed overview of how ShowBiz Cinemas keeps moviegoers front and center in such a changeover, check out the Atascocita Observer’s account at bit.ly/fji0115showbb.) At press time, the complex was near completion of an expansion, which adds both bar amenities and an SDX auditorium. Going forward, all ShowBiz Cinemas will have this circuit-branded “Superior Digital Experience,” featuring Barco 4K projection on a 70-foot screen, “high-quality oversized leather seating” and Dolby Atmos immersive sound.

“Well, you know, I cut my teeth at Cinemark,” Mitchell says of his apparent knack for selecting the right locations amidst competition all around. “I am third generation in the business and I grew up at Cinemark for all practical purposes [as the son of Cinemark chairman Lee Roy Mitchell]. And so, certainly, I learned a lot while I was there, but I also learned a lot after I left. One of those things we have learned is to get ahead of the markets and to stay ahead of the growth. Most importantly, we like to think outside the box when we’re looking at some of these smaller markets where there might be a need.”

As a case in point, he mentions his plans for Lindale, Texas. “I don’t know that Lindale would necessarily support a standalone theatre. However, by creating a destination zone with bar/café and bowling, I think we pull from a larger market and are able to create something really exciting that the city and the community can get behind. So, they are not opposed to helping us or helping the developers make it happen.”

Speaking of making things happen, why is all this expansion going on now? Mitchell believes it is a combination of factors. “We have our operations in place where the banks feel secure with us as an operator. The real-estate market is coming around. These Houston locations did not happen overnight, but are the result of deals that I’ve been working on for a couple of years. And much of it has to do with the fact [that] developers had a hard time getting their funding.” While developers “still view theatres as an anchor tenant” more than ever, Mitchell feels, these partnerships depend on the operator. “You have to show them that you are in this for the long haul… I think they are looking closer at theatres and theatre operators…taking a hard look at the individual operations. I don’t have a problem with telling anyone that I am talking to, ‘Feel free to visit my theatres at any given time.’ You won’t find dirty theatres and overpriced tickets at our locations.”

As someone who fears that we are pricing ourselves out of the entertainment mix, this author asked Kevin Mitchell to elaborate. He could not agree more. “A big part of the problems today is how the theatre industry in some markets and how some operators have made the moviegoing experience too expensive and almost not worth it. I find that disturbing, because as an operator I care; and as a third-generation operator I am very passionate about our industry.” While reassuring that “there is a big and bright future ahead for the theatre business,” Mitchell also cautions, “You’ve got to have affordable prices and you’ve got to have clean theatres. You’ve got to give the public a reason to come back.”

In addition to customer service and enhanced amenities, films are the biggest reason for coming back, of course. “We are a product-driven business,” he concurs. “To me, our biggest challenge…has really been outside of the theatre operators’ control: a lack of creativity in Hollywood. We are trying to compete with the home…and we offer a better experience in the theatres than you get in your living room. But you’ve got to give them a reason and, at the end of the day, that reason is the movies. They are here to see movies. Without the creative side engaged, yes, that certainly creates a very big challenge for us today as theatre operators.”

Windows as well have posed a challenge “and will continue to be,” Mitchell continues. “Movie theatres are the studios’ biggest form of marketing for any alternative or downstream media. And, hopefully, the studios will always remember that.” While there are stars that seem “more interested in doing TV today, and being TV stars rather than movie stars,” his outlook remains positive. “There is a lot of up-and-coming talent that is still ready to embrace the big screen.”

In doing our part, we as an industry have to be equally creative, Mitchell believes. “You cannot be afraid to think outside the box. You have to stay up-to-date and invest in your locations and in the technology. You’ve got to embrace change always, but you have to do it smart as well.”

Boutique bowling, bar and ‘Blue Bell’ ice cream: It’s all part of ShowBiz

In addition to sharing his business philosophy and views about theatrical exhibition on the preceding pages, ShowBiz Cinemas’ president and CEO Kevin Mitchell provides feedback for Film Journal International’s exclusive series about Cinema Entertainment Centers (bitly.com/bundles/creativecinema/9).

“There is a struggle for time with the average moviegoer,” Mitchell has observed. “It used to be dinner and a movie and today we’re finding it is dinner or a movie. Not unlike many other theatre operators, we feel that we can cater to both of those needs… We can offer an expanded menu that is good and satisfying without becoming a restaurant. I don’t want to be in that business. We are in the family entertainment business.”

At the upcoming new ShowBiz Cinemas and bowling centers, self-serve concession areas will be complemented by a full café and bar. Some of the “delicious items” available include brisket sliders, flatbread pizzas, Angus burgers and chicken tenders, as well as hand-scooped Blue Bell ice cream and a full line of Starbucks beverages, a recent media release promised. The bars will serve a “complete selection” of mixed drinks, premium wines, craft beers and frozen cocktails.

“In our bowling centers we are going to have wait staff that will cater to our guests,” Mitchell elaborates. “We are also looking to offer a slightly larger menu that otherwise may not be as moviegoing-friendly. The last thing you want to serve in a dark auditorium is a chicken wing,” he finds. “You know, bones fall on the floor… Clearly, you do not want to serve something that messy.”

The addition of a dozen or more lanes of bowling promises to add good clean fun to the cinematic and culinary proceedings. “Creating a ‘destination zone’ is something that we really wanted to do,” Mitchell assures. “There is a void for family entertainment. Primarily, we are reaching out to our young audiences and teaching them to be future moviegoers. Others have created bowling centers with a huge, mall-like atmosphere, but we have tried to not lose our focus of being in the movie theatre and family entertainment business.” Between the two, “we’re trying to create one synergy,” he says. Not only by combining various options under one roof–there will be areas for games as well–but also physically and operationally by establishing common spaces and sharing service staff.

“Well, I can tell you that’s the beauty of our footprint. We worked really hard with the architects [at Beck Architecture] and our team here to create a flexible footprint that can be adapted to individual markets. We can add screens and/or bowling lanes, or we could reduce the number of screens and shrink the space used for bowling. We have a customizable prototype that can change with the needs of each community.”

The first bowling center (14 lanes) with cinema location (10 screens) is under construction in Baytown, Texas. “We spent a long time working with consultants and with the people at Brunswick Bowling…doing our homework. Quite frankly, however, our business model is not really relying on the bowling portion for survival, like some other concepts out there do. Again, we look at bowling strictly as another form of entertainment. Our bread and butter remain our movie theatres and the food and beverage business.”

By creating synergy with bowling and adding event spaces for corporate or private groups, ShowBiz Cinemas wants to increase frequency, Mitchell says. “Really, what we’re trying to do is to increase the number of visits. Whereas the average moviegoer may come once a week, we are hoping that we can get him/her to attend the movies on Friday night and to come back bowling on Saturday.”

In closing, Kevin Mitchell likens additional food, beverage and entertainment offerings to having the potential for “almost doing what stadium seating did for our industry.” Namely, to become an entirely new and improved movie theatre. “Creating entertainment destination zones, a place where you can grab dinner and a movie, and then maybe stay and bowl a game or two, I think will help our industry moving forward."