More Than A Movie
Newly formed Monaco Pictures is striving to create a different kind of movie-going experience.
Randall Shearin

Following a 4-year slump in movie theater attendance, the exhibition industry is on track to have a great year in 2006. Hits like Pirates of the Caribbean: Dead Man’s Chest, Superman Returns, Cars and The DaVinci Code have kept moviegoers heading back month after month. But according to Gary Safady and Paul Orfalea, the founders of O&S Holdings, there still seems to be something missing for the moviegoer. That something is an upscale experience. To remedy the situation, they’ve partnered with Todd Tickner, who serves as principal and managing partner, to create Monaco Pictures, a new theater experience like nothing that exists today.

Shopping Center Business recently visited with Safady and Tickner at the company’s headquarters in Santa Monica, California, to find out more about the new theater company.

A New Movie-Going Experience

Gary Safady and Paul Orfalea, founders of Los Angeles-based O&S Holdings, have partnered with Todd Tickner, who serves as principal and managing partner, to create Monaco Pictures.

Monaco Pictures was conceived because Safady, Orfalea and Tickner believe that the traditional exhibition format will change dramatically over the next 5 to 10 years.  With this in mind, Monaco Pictures will be an entertainment destination that combines cutting edge design with state-of-the-art technology in order to create the ultimate “out-of-home” experience for first-run feature films, sports, music and the growing alternative content category.  As part of the company’s unique strategy, Monaco Pictures will offer an upscale atmosphere with private club-like amenities that include a full-service bar/lounge, luxury reserved seating, adult-only areas, state-of-the-art all digital theaters, including 3D/REAL D, and food offerings that are different than the typical theater. The goal at Monaco Pictures is to deliver a great night out — at the movies.

“We really want to give the customer a different entertainment experience that can only be achieved when they come to Monaco Pictures,” says Safady.

In order to achieve this, Safady and Tickner spent time with all the major Hollywood studios as well as visiting many of the new and emerging formats in the U.S. and around the world. Monaco continues to collaborate with some of the biggest names in the movie business, including John Davis, who produced I, Robot and Flight of the Phoenix, and Tom McGrath, former COO of Paramount/Viacom.

“We know execution is everything and we are pleased that Monaco continues to attract some of the most respected names in the business. This is an industry that is going through a lot of change.  Not only in the transformation to digital, but all the major players are trying to find what that next new format will be. It’s a risky time, but with risk comes opportunity, so execution is everything,” says Tickner.  

Monaco Pictures is looking to an unlikely retail role model: Kinko’s. Orfalea founded Kinko’s and modified the company’s concept during his years of involvement as the retailer expanded from coast to coast. Similar to how Kinko’s sells time inside its stores (customers use the store as a portable office), Monaco Pictures will sell the entire movie-going experience. Having more options creates more time spent in the store, which results in more return trips as customers remember the services that the company provides.

“Our philosophy is not a whole lot different,” says Safady. “We want to get customers in there for the movie, but when it’s over, we don’t want them to leave. We want to capture 30 percent of them after the movie to go to the lobby bar or restaurant.”

A Different Theater Box

The theaters themselves are specially created so that sound does not carry out of their walls and so that they are the most technologically up-to-date theaters in the country. Monaco Pictures hired a company called MIT to design these aspects of the theaters. The theaters will be 100 percent digital.

The company has announced two theaters to date, the first of which will roll out in summer 2007 at O&S Holdings’ Bridge Street Town Centre project in Huntsville, Alabama. The Huntsville market has the third-highest concentration of Ph.D’s in the nation (behind Silicon Valley and North Carolina’s Raleigh-Durham-Chapel Hill area), with the fourth highest salary of any MSA in the Southeast. Monaco is designed for every demographic, but specifically geared toward a more upscale customer.

“We are extremely excited about rolling out our first Monaco format in our Bridge Street Huntsville project,” says Safady. “We believe it will fill a tremendous void for the community and they will see Monaco Pictures not only as a movie theater, but a place to go for drinks and nightlife as well.”

Although the $9 billion motion picture exhibition industry continues to face challenges, Monaco Pictures is confident that people still love going to the movies.  Because of this, they are committed to delivering a format of the future.

“We know the country is adequately screened, so we know we need to do it better than our neighbors. New technologies such as digital and 3D are really exciting and will continue to deliver over-the-top experiences. We believe there’s a huge market that wants to watch something like a U2 concert or football in 3D on a 50-foot screen. Add upscale amenities and you have a reason to leave the house,” says Tickner.

The majority of the movie-going market is 9 to 25 years old. Traditionally, that is the typical demographic movie exhibition companies target. Monaco Pictures will appeal to the person who loves the movies, but is tired of the hassle that comes with visiting a typical movie theater: waiting in line to buy a ticket, cell phones ringing in the middle of a movie, and sitting in cramped theaters with poor concessions. Monaco will combat this by offering an exclusive theater with a high-end design. But the experience, says Safady, will have a premium.

The design of Monaco Pictures will differ greatly from a traditional movie theater. At Monaco, you won’t find any neon lights. The exterior will have an old world, classic feel. Carpet, lighting and other finishes will be stylish, hip and modern. The design is being done by Long Beach, California-based Perkowitz + Ruth, the same firm that designed top lifestyle centers like The Grove in Los Angeles.

“Entering Monaco will be more like entering an upscale boutique hotel in New York than a movie theater in Huntsville,” says Safady. “We like to say that we’re the Four Seasons of movie theaters.”

Monaco Pictures’ theaters will feature a lounge for VIP guests on the second level.

When entering Monaco Pictures, guests will be greeted in a large, sleek modern lobby. The box office, located in the lobby, is set up more like a concierge desk than a ticket booth. The lounge will be open to the lobby, and there will be a private lounge for VIP guests on the second level. VIP status will be an up sell for those wishing to have larger seats and a more intimate experience at the theater. Valet parking will also be available.

The Huntsville theater will have 14 screens. Seating will be more accommodating than most theaters, with 23-inch wide, high-back rocking seats. Patrons will be able to reserve seats ahead of time, even for opening night. Several theaters will also have upper level, VIP balcony areas that have wider seats covered in leather. The largest of the theaters at the Huntsville Monaco will seat 335 people.

“We gave up seat count to create a more comfortable experience,” says Tickner. “But we felt that it was critical for us to do that.”

Concessions at Monaco Pictures will be appetizing and enjoyable. Alcohol, including signature cocktails, will be available in the lounge. In the concession areas, along with signature popcorn and candies, appetizers like sushi, hummus and gourmet pizzas will be available. The lounge will have more appetizer food versus sit-down meals. A coffee bar will serve up espresso and coffee drinks. O&S has four white tablecloth restaurants at Bridge Street and it doesn’t want Monaco Pictures to compete with them for the dinner dollar. Where Monaco Pictures will shine is in the lounge and concessions area. As where the average theater receives $3.50 per capita on concessions, Monaco Pictures expects that it will receive $15 to $20 per capita in concessions. Visitors to Monaco Pictures won’t need to buy a ticket to the movies to visit the lounge.

“Because we are designing Monaco Pictures as a cool place to hang out, we expect that people will want to spend more time at the theater,” says Safady. “We are going to see a little higher revenue growth from our concessions than from a typical box movie theater.”

Similar to the design, the theaters themselves are especially created so that sound does not carry outside their walls; they are the most technologically up-to-date theaters in the country, featuring 100 percent digital with Real D/3D technology.  

“It is a similar analogy to going to two different hotels,” says Tickner. “If you go to your average everyday hotel, you then must go somewhere else to eat; if you go to the Four Seasons, you are there to stay and be served.” 

Monaco Pictures will show first run mainstream movies as well as specialty films. The company has hired the former head of programming from Regal Entertainment to secure its films. In addition to movies, Monaco also expects to program its theaters with music and entertainment, corporate functions and private parties on a regular basis, and will represent a large part of its revenue base.

The second Monaco Pictures will open in McKinney, Texas, in 2008. Showing that its money is where its mouth is, both of the first two theaters are in O&S Holdings projects. For future developments, Monaco Pictures is looking at other projects in upscale markets. Monaco Pictures wants to have upscale co-tenants (at Bridge Street in Huntsville, tenants include Anthropologie, J.Crew, P.F. Chang’s and Barnes & Noble). Monaco Pictures wants to locate in town centers and lifestyle centers. It will also be looking at freestanding, urban locations. Since the Monaco Pictures build-out costs more than a typical movie theater, the company prefers to own its real estate. Monaco Pictures does not plan to locate in power centers and it will not take over existing theater real estate.

Many developers have expressed an interest in having a Monaco Pictures in their centers. The company has a few deals that it is in discussions with, but nothing announced yet. Monaco Pictures plans to open its next units in Florida, Michigan and Los Angeles. Future expansion targets New York, Chicago, Southern California and Florida heavily. The company is not geographically restricted in its expansion plans and will go wherever opportunities make sense from a demographic and economic standpoint.

“All major markets will at some point have a Monaco Pictures in their back yard,” says Tickner. “That’s our goal.”