The Covid-19 pandemic nearly shut down outdoor cinema company Rooftop Cinema Club. But a shift in the movie industry — and even the parking industry — is helping the company recover.
Rooftop plans to open an outdoor theater in Houston as the pandemic begins in March 2020. But that place, with a lot of money going into it, won’t open for a few months. All other rooftop locations will also be occupied.
“In May 2020, we ended up opening three or four drive-through theaters, which really saved the business,” said Gerry Cottle, founder and CEO of Rooftop. “We still lost money, but in addition to the funding we got and the Drive in and we’re able to keep everyone going and keep the business running.”
Cottle believes the revival of the drive-through movie experience will continue thanks to its Covid-safe format. However, that boost came to an end once the in-person experience from last year returned.
“In 2021, that’s really starting the business,” Cottle said. Rooftop soon exited the drive-through business entirely. “It cost us a lot,” he continued. “At the end of that year, we still managed to salvage the business and raise capital. Now we’re back to what we’ve been doing, which is rooftop cinemas.”
Rooftop is located in Marina del Rey and has 11 venues in the US and UK, including 3 in Los Angeles: El Segundo, Downtown and the Arts District. Three of its venues are on top of the parking lot; the rest are on top of the building.
While Rooftop will have to overcome pandemic-related challenges to survive, its difficulties are not as severe as those experienced by most of its traditional cinema peers over the past 2.5 years. This is due to its outdoor format and relatively low-cost business model.
The types of films Rooftop screens — mostly classic and popular films like Back to the Future, Dirty Dancing and La La Land — are key to its business model. In addition to operating cheaper outdoor venues, Rooftop doesn’t rely on expensive new games, which is critical to the company’s health and growth.
Traditional indoor movie theaters have suffered significant losses during the pandemic. The lack of new movies, combined with theater capacity constraints and the rise of streaming services, has pushed movie theaters to the edge. According to the Motion Picture Association of America, theater revenue fell by more than 70%, from $42.3 billion before the pandemic in 2019 to $12 billion in 2020.
“When you’re a regular movie theater, you focus on new releases. So their success depends on the strength of the movies that are being shown,” Cottle said. “For us, we’re shooting classic movies and we’re like, ‘Look, this movie is amazing. What if you came and watched it on the big screen with your friends or family?
Rooftop has recently started introducing updated movie versions to meet customer demand. However, instead of showing new films as quickly as traditional theaters, it mainly shows classic and popular films.
On average, the rooftop location accommodates 200 customers and has one screen. Moviegoers listening to movies through wireless headphones are one of the company’s selling points, in part because they reduce noise pollution to neighbors as well as moviegoers, Cottle said.
According to Cottle, the roof was built for the social media generation. Guests are encouraged to show up early to try deals, including alcoholic beverages, and to take advantage of the venue’s views and photo opportunities. Food and beverage revenue is “very important,” Cottle said.
“We’re really trying to change the way people experience open-air cinema,” Cottle said. “No more standard screens with mediocre sound systems.”
However, delivering a high-quality movie experience is not without serious investment.
According to Cottle, in the early days of Rooftop, it cost about $50,000 to $100,000 to create a venue. Now, the company spends between $12,000 and $1.5 million to outfit the roof with the necessary equipment, fixtures and seating. Much of the growth was due to significant improvements in the technology, seating and licensed equipment the company now uses.
we go back
do what we’ve been doing
It’s a rooftop cinema.
Rooftop Movie Club
About 20 percent of the cost of creating a rooftop venue goes to technology, including wireless headphones, projectors and movie screens.
Creating such an experience largely means finding suitable venues, such as the rooftops of commercial or retail buildings and the top floors of car parks.
The company focuses on regions with longer warm seasons. When the company ventured into areas with more severe weather, it took a different approach.
“If it’s a short season and we’re going to a place like Chicago, we’ll do a (short-term) residency model because we can’t build a full venue in just 4.5 months,” Cottle said. “But somewhere like Texas or the Sunshine State, we’d go in and pay high rent because we knew we were open nine or 10 months of the year.”
Due to changes in the parking industry, parking garage locations are becoming increasingly attractive. According to Garry Means, board member of the International Parking and Transportation Association, the industry is looking for alternative income.
“Overall, there is more availability than before, and parking lot owners and operators are looking for revenue opportunities outside of parking or ways to engage with the community,” Means said. “I don’t think an open mind existed 10 to 15 years ago.”
However, Means points out that there are some engineering variables in Rooftop’s theater venue. For example, some top floors of a parking lot may not be able to meet the weight requirements for rooftop movie screenings.
“Parking spaces are typically 8 or 9 feet wide and about 18 feet long and are designed to carry the weight of the car,” Means said. “But if you’re crowded with people, they could be heavier than a car, and now you’re going against the design of the structure.”
Means added that emergency exits and disasters are also important factors in which parking structures may or may not be suitable for movie screenings.
Cottle said that as Rooftop grew, one of the challenges it faced was bringing individual city offices or municipalities into its concept.
“Rooftop cinemas don’t have any options,” Cottle said. “We have to work very closely with (the city government) to find the right codes and permits.” He added that city authorities were generally excited about the company’s model, but the process of sorting everything out could take months and be costly .
Given the company’s expansion plans, which include downtown Fort Worth, Texas, opening this month and Orlando, Florida, opening early next year, the company will continue to face challenges convincing city officials and working through the regulatory process.