The Covid-19 pandemic nearly put outdoor movie theater company Rooftop Cinema Club out of business. But shifts in the movie industry – and even the parking industry – are helping the company recover.
As the pandemic began in March of 2020, Rooftop was planning to debut an outdoor theater in Houston. But that location, with significant capital sunk into it, would not open for months. And all other Rooftop locations would seize up as well.
“In May (2020), we ended up opening three or four drive-in theaters and it really saved the business,” Gerry Cottle, Rooftop’s founder and chief executive, said. “We still lost money, but alongside the funding we got and the drive-ins, we were able to keep everyone going and keep the business afloat.”
Cottle believed that the resurgence of drive-in movie experiences would continue because of its Covid-safe format. However, that boost was finished once in-person experiences returned beginning last year.
“In 2021 that really startled the business,” said Cottle. Rooftop quickly got out of the drive-in business entirely. “It costs us a lot,” he continued. “We still again managed to save the business and raised capital at the end of that year. Now we’re back to doing what we’ve always done, which is rooftop cinema.”
Rooftop, based in Marina del Rey, has 11 venues in the United States and United Kingdom, including three in Los Angeles: El Segundo, Downtown and the Arts District. Three of its total venues are on top of parking garages; the rest are atop buildings.
Other Challenges
Although Rooftop had to overcome pandemic-related challenges to survive, its difficulties have not been as bad as those experienced by most of its traditional movie theater counterparts in the last 2 ½ years. This is due to its outdoor format and relatively low-cost business model.
The types of movies that Rooftop screens — primarily classics and popular movies such as “Back to the Future,” “Dirty Dancing,” and “La La Land” – are key to its business model. Rooftop’s nonreliance on expensive new titles, in addition to operating cheaper outdoor venues, has been vital to the company’s health and growth.
Traditional indoor movie theaters suffered significantly during the pandemic. A lack of new films, paired with theater capacity restrictions and the rise of streaming services, pushed movie theaters to the brink. According to The Motion Picture Association, theatrical revenue dropped more than 70%, plunging from $42.3 billion in the prepandemic year 2019 to $12 billion in 2020.
“When you’re a normal cinema, you’re all about new releases. So their success is determined by the strength of the movies being released,” Cottle said. “For us, we’re taking classic films and we’re saying, ‘Look, this film was amazing. What about if you come and watch it on the big screen with your friends or family?’”
Rooftop recently began bringing in newer movie releases to meet demand from its customers. However, it does not show the new titles as soon as traditional theaters and has kept its showings primarily focused on classic and popular movies.
On average, Rooftop locations can accommodate 200 customers and have one screen. Moviegoers listen to the movies through wireless headphones, one of the company’s selling points according to Cottle, partly because they reduce noise pollution for neighbors – as well as the movie attendees.
Rooftop, according to Cottle, is built for the social media generation. Guests are encouraged to show up early, try out the concessions, including alcoholic drinks, and take advantage of a venue’s views and photo opportunities. Food and drink revenue is “vitally important,” Cottle said.
“We’re really trying to change the way people experience open-air cinema,” Cottle said. “There’s no longer a standard screen with a mediocre sound system.”
Not Cheap
Offering a high-quality cinematic experience does not, however, come without serious investments.
In the early days of Rooftop, creating a venue cost the company about $50,000 to $100,000, according to Cottle. Now, the company spends anywhere from $1.2 to $1.5 million to equip a rooftop with the necessary equipment, fixtures and seating. Most of that increase is because of dramatic improvements in the technology, seating and concession equipment the company now uses.
We’re back to
doing what we’ve always done, which
is rooftop cinema.
gerry cottle
Rooftop Cinema Club
About 20% of the cost of creating a Rooftop venue goes into technology, including wireless headphones, projectors and movie screens.
Creating such an experience has largely meant finding the right venues, such as commercial or retail building rooftops and the top levels of parking garages.
The company focuses on locales that have longer warm seasons. When the company has ventured into areas with more inclement weather, it has taken a different approach.
“If it’s a short season and we’re going somewhere like Chicago, we do a (short-term) residency model, because we can’t afford to build a whole venue just for 4 ½ months,” Cottle said. “But somewhere like Texas or the Sunshine State, we’ll go in and pay high rent because we know we’re open for nine or 10 months of the year.”
Parking garage locations are becoming more attractive because of the changing parking industry. According to Garry Means, a member of the International Parking & Mobility Institute’s board, the industry is looking for alternative income.
“Across the board, availability is more there than it used to be, and parking owners and operators are looking outside of just parking cars for revenue opportunities or ways to engage with their community,” Means said. “I think there’s an open mindedness that used to not be there 10 to 15 years ago.”
However, Means noted, there are engineering variables that come into play with Rooftop’s theater venues. Some top floors of parking garages, for example, might not be able to meet the weight requirements for Rooftop movie showings.
“A parking space is typically 8 or 9 feet wide by about 18 feet long, and it’s designed to hold the weight of a car,” Means said. “But if you pack that full of people, it could be that they weigh more than the car, and now you’re going against the design of the structure.”
Means added that emergency exits and ramps are also big factors in which parking structures may or may not work for film showing.
One of Rooftop’s challenges as it has grown is introducing various city offices or municipalities to its concept, according to Cottle.
“There is no box to tick for rooftop cinema,” Cottle said. “We have to work closely with (city offices) to find the correct codes and permits.” He added that municipalities generally have been excited about the company’s model, but the process of sorting everything out can take months and become costly.
The challenge of convincing city officials and working through regulatory processes will continue for the company, considering its expansion plans, which include locations in downtown Fort Worth, Texas, which opens this month, and Orlando, Florida, which will open early next year.
