On this episode of Decoder with Nilay Patel, I’m joined by Shelli Taylor, the CEO of Alamo Drafthouse, and we’re talking about a big problem: how and when to reopen movie theaters during a pandemic.
Shelli’s in an interesting spot: she started her job as CEO on April 30th, after the pandemic’s first wave had caused Alamo Drafthouse to shut down 41 locations. Shelli had been an executive for Planet Fitness and Starbucks, and Alamo’s founder, Tim League, recruited and hired her before the pandemic to manage growth and expansion.
Instead, she found herself confronting a crisis.
We talked about that transition and what steps she had to take to get Alamo Drafthouse back on solid ground: where she could save money and where she thought cuts would damage the Alamo customer experience. Shelli is not shy about saying the government has failed to manage the pandemic effectively for business owners.
We also talked about what it will take to safely reopen theaters and what the future looks like, especially in the streaming era. Streaming had already shifted the movie business toward blockbusters — mid-budget romantic comedies have long since turned into Netflix movies — and the pandemic means even blockbusters are shifting to streaming. For example, Wonder Woman 1984 is headed to HBO Max on Christmas Day. Turns out, there are more discussions between the big studios and theater chains than previously thought, and Shelli offered us a peek at those conversations.
Also, I completely love a business that has a high fixed cost for expensive lightbulbs. You’ll see what I mean.
This transcript has been lightly edited for clarity.
You became the CEO of Alamo Drafthouse on April 30th. So you have stepped into chaos. I think Alamo actually shut down 41 theaters in March. What was this recruiting pitch like? Did they call you and say, “Hey, are you interested?” Was it already in the works? It seems like a wild way to become the CEO of a movie theater chain.
Yeah, it does feel wild, but it was in the works at Christmas when Tim [League, founder of Alamo Drafthouse] and I met and started talking. I was just drawn to this incredible brand and this opportunity to help take something iconic and grow it even larger. And then all of a sudden, the pandemic hit, and here we are. So we’ve got this little issue to get through. Then we can go back to the original plans.
Just the first day, April 30th, you showed up. You got to introduce yourself to everyone. There’s usually a script the new CEO follows. You say something like, “First, I just want to listen.” There’s the usual stuff. Was it very different this time, or did you just come out running?
A little of both, right? I mean, you do talk about just really wanting to listen and to get to know people. You don’t have the advantage of the water cooler in the office and that proximity. But at the same time, there’s nothing like a crisis to create a need for connection and speed to trust. Really fortunate that the company and the teammates have been so welcoming and willing to just assume good intent and want to move forward versus having to do some of that initial stuff. So it was pretty fast. No one’s kicked me out. We’re seven months in and I’m still here. Things are going pretty well, considering.
I always try to ask everybody about decision-making frameworks. Before Alamo Drafthouse, you were the CEO of a large group of Planet Fitness locations. You were at Disney before that. Tell me about your general way of making decisions. How do you think about evaluating your choices and then actually coming to a decision?
I think it’s a couple of things. One is just knowing who and what you are. The beauty of everywhere I’ve worked [has been] a really clear sense of their purpose and values and the problems that they’re trying to solve in this world. So always starting with that framework and driving from there. I think that one of the things that I took from Starbucks and have valued over the years is that you always put people into that equation.
So when you’re looking at a decision, it’s the stakeholders, it’s your customers, it’s the people on your team, having all those points of view, and then sometimes it’s the broader community, depending on what the product is. If you start there and then you put in a good dose of data and a good dose of your gut, usually, that’s a great way to go. I mean, it’s pretty simple. Obviously, depending on the complexity of what you bring in or don’t bring in, but it really is values and people and direction.
The reason I asked that question is because, right now, you’re managing in a crisis where there is a flood of data. You have a very physical-plant kind of business: people go to a movie theater and sit down and stay there for a while. How are you managing the influx of COVID information? There’s a massively disjointed federal and state response. There’s people who are refusing to wear masks. Right before we came on, New York City closed its schools again. It feels like there’s just a flow of information about the pandemic and how it’s going and how we’re handling it. You’re saying: add a lot of data, but the data is messy. The points of view are messy. How are you managing that?
That’s a great question, and I appreciate it. I really want to reemphasize: the lack of coordinated government approach is crippling the nation. I know lots of people are saying this, but if there is a message to our government right now, it is critical that they have a coordinated approach. The way that we’re approaching it is one, just my own prior experience of living and working in China and seeing how this has been approached in the past helps, watching businesses and countries that are making good decisions helps.
And then we’ve just been trying to take a very steady approach. That is, with the information that we do know that is not constantly changing — and some of that is, but there are a few constants out there — how can we make our experience as safe as possible from purchasing your ticket to the minute you leave the theater? We haven’t wavered from that. We’ve done a lot of pretty scrappy, fast innovation for online ordering, both of tickets and food; how you come into the theater; doing the spacing of people, so that 6-foot distance. Before it was popular, we said that we were going to enforce masks for everybody. We thought about our kitchens, creating a smaller menu, so that we could socially distance within our kitchens. How do we not breathe on food, touch food? How do we help people exit the theaters? I mean, you just name it, we’ve taken every single precaution that we can. We’ve gone as far as we could. We’ve just said, “What is the safest stringent possibility?” Yes, there’s going to be this constant influx of information, but until there’s something that comes in that says differently, we’re not going to waver. That’s just been our approach. I don’t know, with all the variables out there, how anyone can do it differently.
Is that a set of advisers and team members you needed to build? I feel like most movie theater chains didn’t have a lot of epidemiologists on staff before COVID, but now we’re all looking for that expertise. We’re all looking for those guidelines. How have you built that muscle and that skill to evaluate those decisions?
A lot of people who are willing to help us, whether it’s our PE firm, Altamont Capital, gives us a ton of information and advice, whether it’s our insurance and brokers on that side bring in a ton of advice. And then we’ve got strong relationships with the University of Texas, and the information that you can get publicly. We’ve probably done what a lot of people do. We don’t have a ton of money right now, our resources are very skinny. So we’ve had to do-it-yourself as best as possible. We’ll continue to probably operate in that method, but it comes back to that need for a coordinated government approach to this. The government really could be doing a better job at providing clear guidance that does not consistently change to businesses, and quite frankly, is equitable to businesses.
What do you mean by equitable?
Just small examples. In some cities, we’re not allowed to open, or we can open but we can’t serve food, yet the restaurant next door can serve food. That just doesn’t make sense. What’s the logic? Set a simple, clear set of criteria that everyone operates off of, because part of the problem is the noise and the confusion that goes out to our customers and our guests. It’s safe here, but it’s not safe with you. People can’t discern that. It really should be agnostic to the business, what is safe and what’s not, to the best that we know today, right? Yeah, asking for a lot probably.
Well, there’s a new administration. We’ll see how it goes.
One of the things about the pandemic that I’ve heard from many CEOs, executives, is that this has accelerated trends that we already saw coming. In some cases, those trends are positive. We’ve seen a massive acceleration in e-commerce. Everyone already saw that coming. We just turned the knob up. There’s been a pretty loud conversation for years about the future of movie theaters. Some of that has played out in different ways. Rom-coms don’t really get made by Hollywood, but every other Netflix show is basically a rom-com. So we’ve just seen the dynamics of the industry change.
I’ve always thought of Alamo Drafthouse as being slightly different than your average gigantic chain movie theater. You have food. It is an experience. You’re running old movies. People come there as a social event. Do you see it as, “This is accelerating the trend that was already coming,” or, [as] you started by saying, “We’ll just get back to work when it’s over”? Do you see this as an aberration on the plan that you already had for your company?
Yes, the world is accelerating in many ways. What won’t go out of style is community and social experiences. So I think while the industry was ripe for disruption, and we’re seeing that, Alamo’s secret sauce really is creating these communal experiences for people, bringing the community together to laugh, cry, gasp, whatever, but have fun together. That won’t go out of style. So, for us, it will be going back to the secret sauce of what makes us special. We show over 2,000 films a year. It’s more than double what other chains show because we bring in a really thoughtful slate to our audiences and that’s what they want. They want more than just the big blockbusters.
And then we do create great food. Sometimes that food ties to the film, which is really fun, and all the different experiences that we do create. So that won’t go out of style. I do think what’s accelerating, and things that were on our list, is we wanted to do the mobile food ordering in advance, where if people want to figure out what they want to eat and order that with their tickets and not have to do that in the theater, we wanted to do that. So we brought it forward.
Alamo On Demand, that was something that was in our hopper of a great idea of, “How do we curate really different streaming opportunities for our audiences that the big streamers aren’t and probably will never do?” So we have brought things forward. I think as we move into the future, there’ll be some other things that we think about, but the core won’t change. That community, that experience, and creating something that you can’t get at home, that won’t change. It won’t go out of style.
Alamo Drafthouse has billed itself as more than just a movie theater — it’s an experience. So I wanted to ask Shelli about how she thinks about the basic parts of operating a movie theater and where it goes from there.
I spend a lot of time talking to tech CEOs. They ship me a phone, and they’re like, “It’s great.” That’s the end of it. Certainly, they have lots of people working in offices and they have physical plants to manage, but your product is a physical experience for people. I’m curious, how do you think about seats? “We’re going to have to install some seats.” What is the decision-making process to choose the seats in the theater and maintain them over time? Do you go to competing theaters and sit in their seats and think, “Well, these are better than mine. We’re going to have to improve them?” That’s a set of decisions that I think rarely get foregrounded, but it seems clear that you have to think about them all of the time.
Yeah, so Tim League, our founder, I don’t think he went to competitors and said, “What are they doing?” He’s created the cinema eatery experience. What he does is he’s such a huge superfan, right? He’s like, “How do I want to experience this?” One simple detail that you wouldn’t necessarily notice is the space between the screen and the first row. I think we have eight to 10 feet on any other theater, meaning [how far] we go back. So we could have squeezed in another row or two, but we said, “No, we want to make sure that even if you’re in the front row, that is a seat worth having.” Again, it’s just all these details.
But when we look at beer on tap, we go to the local market. We’re like, “What is important for this community?” We buy local beers. We still have some of the traditional beers that you would expect. We think about all those things because we’re like, “If you’re going to spend the money, if you’re going to go out of your house, come to the theater, and spend money, what do you want? You want something where someone who loves movies has curated it and thought about all that.”
It’s like our pre-show, no texting and no talking. Hey, you spent a lot of money. We know you don’t want to hear all your neighbors next to you. It’s all those little details that the company, and Tim as the visionary, have put into creating this experience. Even in COVID, we’ve thought a lot about that. We’re still making our pizza from scratch, quite frankly. We haven’t changed what makes our great quality great.
How do you think about the technical side of just showing a movie, right? That’s changed a lot over the past decade. You’re talking about sound and screen. There are audio formats and speakers. How much of a tech operation are you actually running just to hit play and make sure it all sounds good and looks good?
Well, this is not my area of expertise yet, but I’ll tell you our projectors are amazing. I mean, they’ve come a long way. They’re a very expensive piece of equipment. What we do differently than most of our competitors is that we’re changing our bulbs out regularly. We don’t wait for them to get to the end of life. It’s very expensive. They’re thousands of dollars for one of the bulbs, but it makes a huge difference in the quality of the screen and that film that you see. We do a lot of things like that. It is technical. We have some of the best people in the industry who work for us that guide us in that and stay on top of it. Definitely not where I can speak fluently yet.
Just to be clear, you’re the CEO. It’s April 30th. You start. You’re like, “Okay, show me the P&Ls.” Someone’s like, “Well, we got this COVID problem. Also, here’s our lightbulb cost.” You’re like, “This is higher than industry, and we’re good with it.”
Well, yeah, I mean, I’m super curious, right? Even if we’re not showing films, take me up and show me the projectors. I want to geek out and say, “Show me all this stuff.” So I’ve spent time in theaters — I’ve worked a few shifts, not enough, but I’ll get out and do more — and trying to learn it rapidly. But our focus really is on survival. It’s working with our banks. It’s working with our landlords, all of that. And then, quite frankly, trying to take care of our people. In this situation, that’s a lot to do.
I’m so focused on the lightbulb thing because it’s such a good stat, right? “We spend more money on lightbulbs because we care.” But there’s never been an instinct to say, “Hey, we’re in a crisis. We could save a ton of money if we just run our projector bulbs longer.”
Yeah, no, that’s not our goal. I think there are places where we can improve our P&L. We are finding those and making improvements across the board, but it won’t be in the experience. It won’t be how we treat people. Whether it’s our teammates or our guests, that’s not where you save money. You save money on how you negotiate contracts and all the costs behind the scenes that don’t touch people. That’s where we need to be more disciplined and where we haven’t had to focus. Quite frankly, now we are, like the spotlights there, but it will not ever be on quality.
Tell me about negotiating those contracts. Reading before the interview, it sounds like your landlords are working with you. They’re developing new cost structures. Tell me what some of those are. And then do you think that that will last through the pandemic, that landlords are working with theaters because we know these are important to the community? Or do you think it will shift back to your standard lease agreements?
First of all, it is a huge range. We have some landlords who are amazing and get the fact that there’s burden-sharing throughout the supply chain for any business. I mean, these are different times than normal. And then we have some landlords, quite frankly, they just don’t care. They just want the terms as they are today and are very difficult. We’ve got the gamut, and everyone does, but the conversation that we’re having, whether it’s with landlords, whether it’s with banks, vendors, this isn’t like a poorly run business.
I speak for thousands of businesses across the United States right now, not just Alamo, but there are many businesses like us that were super healthy until March. Now all of a sudden, we’re in a crisis situation and bankruptcy is not the solution. Bankruptcy is the solution for needing to shed off a bunch of your real estate assets, or assets. That’s not necessarily the case. The way that we’re going to change our economy or jumpstart it again when we come out of this — aspects of the economy; tech is thriving, or some tech — but for the service industry and those that are impacted by people physically walking in the door, it has to be burden-sharing from everyone, from the banks, your debtors, your creditors, to your landlords, to your vendors, but you as the business have to burden-share, too. Right now, we do have people that think it should be all about the business. It’s an impossible scenario. Again, this isn’t about win-lose, because if it’s a win-lose, the nation loses. It needs to be a win-win for everybody right now. It’s just not going to be a great win-win for a while. But if we can survive 18 to 24 months, the economy will come back. We know that. We are resilient as a nation, but we do have to find that path.
In addition to doing the corporate work that you’re talking about with contracts, with vendors, have you engaged on the political side? Are you out to the states you’re in? I would say, “Are you out to the federal government?” but that seems quite messy. Is that work that you’re doing as well on the policy side?
NATO and John Fithian, they’re doing a lot of that heavy lifting. We’re thankful for their leadership in that lobbying.
That’s the National Association of Theater Owners.
Not the defense organization, just to be clear.
It’s a good thing you said that. My first week on the job, I’m like, “You’re calling NATO? Give me a break!” Now it’s part of my lingo. Yeah, so they’ve taken a huge leadership role, but we too have been talking. Tim was on the phone with Nancy Pelosi’s office. I’ll be on the phone with the city council in San Francisco. I’ve talked to local lawmakers here in Texas. We are having those conversations. When we have these conversations, it’s not just about Alamo and “we matter,” and “we care about Alamo.” It’s really trying to help everyone think about the broader business community, and “How do we move forward together?” That is critical right now.
Over the summer, one of the biggest controversies in Hollywood was whether to release Christopher Nolan’s Tenet into theaters during the pandemic. The movie eventually came out, but no one went. Tenant was supposed to be a huge hit, but as of right now, it’s only generated $57.4 million in box office sales in the US and Canada and $300.4 million globally. And it’s going to come out digitally on December 15th. So I wanted to ask Shelli what that data point told her about the timeline of reopening and really about the future of movie theaters.
Well, first of all, just a huge thank you to Jeff Goldstein and to Warner Bros. for a studio that took a chance, right? I think there’s a couple things that were happening. One is there’s a lot of noise in the marketplace, even today, where people do not know if movie theaters are open or not. Not even if they’re safe, they just don’t even know it’s a possibility. Trying to cut through that noise has been really difficult. When I look at it, I don’t see it as there was a message in it. I see it as the industry works in a certain way. We just didn’t have some of those key elements.
One is — not because of Warner Bros., but because there’s just so much noise — but a clear message out there to people that theaters were open and that they’re open in a really safe way and in a fun way. The messaging that we did come out with as an industry was a little dry. “We’re safe, because of a professor telling you,” versus “Come back to the theater. We’ve been super smart, but you’re going to have fun.” So we’ve got to get better at that. And then, no movie is going to stand on its own. It’s like you don’t want to be the only restaurant on a block. You want several. It’s the same with the movie slate. You’ve got to have a number of movies out at one time to draw in audiences.
Again, Warner Bros. was huge in taking that first step, and shame on everybody else who pulled their movies out at the last minute and didn’t follow through. For the studios, we’ve got to have a coordinated movie slate again and a coordinated message of, “We’re open,” and not just Alamo but all movie theaters. It’s really hard on the industry when you hear that certain chains are shutting down and not open. It sounds like we’re all closed. Well, we’re not.
What kind of audiences are you seeing come in now? I know you’ve been doing some private rentals to families and groups and so on. I know that’s been a success. Are you seeing just the day-to-day traffic to the movie theater that you were expecting?
Well, the private theater, so first of all, super proud, right? Again, stood that up really quickly with no budget and small resources. Huge kudos to my team and all the people that did it. The private theater is super fun. It’s turning out to be about 55 percent of our revenue.
Yeah, I mean, you think about it: You pick the movie. You create your own community. You come together and get to have this great event for shockingly, a pretty affordable price. Prior to working at Alamo, I would have never thought it was possible I could rent a theater out. That just felt beyond anyone’s means. So we’ve proven we can do that and create this great experience. We still have a lot of just general showings and people coming.
I’ve been asked this a lot and we haven’t put a ton of energy around it, but anecdotally, I can see a wide variety of people. You’ve got the Alamo fans. You’ve got pretty wide age ranges. It’s not just millennials or whatever. It’s just movie lovers, and people who are wearing masks, have found a way to be safe and are picking a few things they want to do. Movies are one of them.
By the way, when I was in high school, one of my friends, her dad was the manager of a local theater, she had a birthday party [there], and it was the coolest thing. So you’re right. I mean, it’s one of those things that everybody dreams about. It’s cool that you can do it, but you’re not getting first-run movies, such as they are, anymore. That’s Jurassic Park and The Goonies and older movies and that experience. What does that tell you about the value of the experience of going to the movies versus the novelty of the blockbuster movie coming out?
Well, it goes back [to], I think we need both. I don’t think it’s an either-or, but I do think that it speaks to the fact that people are looking for experiences, and that we truly have been for a while ... an experiential economy. So the fact that people can come and find their favorite movies, they can create their own parties and dress up, or do something fun around it, is critical. First-run movies and blockbusters are still going to be important. People want new content. They want to come and see it, that huge experience, that film.
Think about the filmmakers, they’re putting their life into telling these amazing stories and spending a ton of money. They want that to be on a big screen, big sound, with a large audience. People want to see that, too, because it’s great at home, but it is not the same at home as it is in the big theater. So I think it’s both. I think the private theater will easily carry into the future. We think there’s something there. We’re going to continue to work with that product and see how it evolves and grows, but we need both. That will be probably one of the changes for the industry as it evolves. It won’t be “either,” it won’t be “or.” It’s both.
I’m looking at the big film studios — Disney, Warner — they all have their own streaming services now. They’re very excited about them. Disney puts out Mulan. They try a new pricing model on top of their existing subscription, it went okay, maybe they’ll do it again. Obviously, Warner has HBO Max. Their whole company is pointed at that product. Do you think there will be a shift to releasing stuff on the streaming services, maybe at a high price, and in theaters at the same time?
We take a lot of hope in watching the fact that more and more blockbusters are being held and waiting for theatrical. If that were the case, there’s a whole bunch of movies that could have easily been put on streaming immediately. I’d like to think that the studios understand, the filmmakers understand, there’s a lot of lost revenue if you skip theatrical. There’s a way to probably do both, have incredible theatrical and then go on to streaming. To shortchange that process probably doesn’t make sense.
I realize Alamo is a very different kind of theater chain than the big ones that have held back some innovation on the studio side, but do you think the theaters have held back some of that consumer innovation? I’ve always thought to myself, “I would just pay $100 to watch this movie at home and rent it just for a night.” There’s no way I’m going to go to a theater to watch this mid-market movie. Just let me watch it here now and I’ll be done with it. That has never happened. The theaters have always been opposed to it.
The theaters have been opposed to Netflix going out to awards because they stream this stuff. There’s just been a lot of that noise here that seems like maybe we’ll come out of the pandemic and those questions will get resolved. But what is that relationship between theater owners and the studios as the studios try to innovate and, quite honestly, use this moment as leverage to get some things they’ve always wanted?
I think there’s a couple of things. First of all, if theaters and studios think that the battle is between us, then we’ve lost — all of us. The battle is with COVID, and the battle, ultimately, is how to best serve your guest. So, first, coming together to fight COVID and then get into this new world, I think, is going to be important. When we get into it, to me, it’s silly to think that there’s streaming or theater, there’s this or that. Content is coming at us faster than ever. No one knew that YouTube would be huge. I mean, just take whatever innovation over the last 10 years with content, and people are consuming more content than they’ve ever consumed.
I think the question is, “How do studios and theaters continue to say, ‘What are the best ways that we can serve our guests and create incredible experiences for storytelling?’” So yes, we may be different, but we also do not want our fellow theaters going out of business. We need them. We need theaters. We don’t want to be the lone survivor. That doesn’t make sense.
But I think it really is unifying around, “How do we serve our guests?” For us, the secret sauce is an incredible experience. We sweat every little detail. We think about the napkin. We think about how clean our theaters are. We think about the popcorn. I mean, we think about the quality of the sound. We do an incredible amount around our screens and sound so that experience is always perfect.
And then we’re going to continue to innovate, whether it’s in the theater or whether it’s at home, but it’s going to be both. People are still going to come to the theater. I mean, I can’t imagine a world without a theater, I really can’t.
You say we need theaters. You said it a few times. In the post-pandemic landscape, it feels like one potential outcome is there’s theaters like Alamo, which are curated, which are more cultural events. There’s big chains that show Marvel movies, and little else, on 45 screens. Does that seem like the most likely outcome, or do you think the big chains will have to change even more?
Yeah, I mean, everybody wants that crystal ball, right?
I think that everyone will have to evolve and change to some degree. I think as much as this sucks, the pandemic... There’s very few, if any, silver linings because the damage is done to people. I don’t want to undervalue that in any way. But at the same time, as much as this sucks, it is a microscope on our business, for each of us to look back and say ... “How do I select real estate? How do I build out? What are those costs involved? Are there ways to be more effective and efficient? Can I think about the size and type of footprint for a theater differently?”
Think about how big an auditorium should be, in some places, we’re probably overscreened. In other parts of the nation, we’re probably underscreened. So thinking about all of those to the unit economics and again, without hurting your quality, there’s a lot of lessons to be learned in that. We certainly are learning them. We’ll move forward with those lessons. Probably everybody has to, but I can’t speak to the big chains and what they’re going to do or not do.
I feel like one of the things about the internet and streaming services is that we have one national cultural moment all the time. Everyone’s just, “Here’s the thing that’s on Netflix, we’re all going to talk about it.” It seems like theaters have the big opportunity to create regional experiences and regional moments in a way that has really gone under examined, right? We just don’t do that a lot anymore. Is that something you’re thinking about leaning into? Do you have regional curators, or does that happen at the top of the Drafthouse?
It’s a mix, right? I mean, you have people in the region who know that audience best and are creating experiences. Our roadshows are a great example. We’ve done things like Jaws on the Water, where you do an outside screening of Jaws. Everybody’s sitting in a lake on the water. I’m personally terrified thinking about being on the water watching Jaws. I don’t know how people do it, but we’ve done all sorts of things like that. So that is something that we’ve always leaned into. Again, it really goes back to the origins and the vision of Tim, of creating experiences and really being the best damn cinematic experience possible. So we’ve always leaned into it, we always will. It will continue to evolve as our guests’ desires and needs evolve.
So there’s been a flood of drive-in movie theaters popping up. I went to a drive-in movie the other day. Actually, they held Jaws, and people came in their pickup trucks with inflatable pools in the back, which is pretty good. Is that something you’re thinking about? We’ll just stand up a bunch of drive-ins and that’ll be it.
Yeah, that’s a good question. There’s a lot about creating a really good screen and sound experience at a drive-in. It’s just still not fantastic. We really did. We thought a lot about, “Do we go do this for the temporary, or do we stick to our traditional model of our theater and focus there?” We’ve chosen to stick with the traditional model, versus run after what we believe are short-term fixes.
Yeah, my local drive-in was definitely being run off of a MacBook. We saw the desktop. We saw the mouse go over and double click on the movie. I was like, “I don’t know about your licensing situation. That doesn’t seem right.” But everyone was happy. So it was a thing.
So we only have a few minutes left. I basically asked questions about the crisis, but you were recruited before the pandemic hit. You came in. You had a plan. What was the vision before the pandemic? Before you entered crisis mode, what was it that you wanted to accomplish in your role as CEO of Alamo Drafthouse?
Our goal was to continue to expand and grow and to do it in a way that we never lose our soul. Because a lot of times, size and scale mean that you have to give up that specialness or make it a commodity. So the goal was to really scale snowflakes and to continue to provide the most incredible cinematic experience possible and continue to evolve it and really give voice to as many films and filmmakers as we possibly can. I don’t think that goes away. I think it’s just going to change, or maybe take a little bit longer before we get solely back to that, but that’s still the goal.
When you say scaling snowflakes, you mean each individual theater is a unique experience that needs to be managed independently?
Yeah, I mean, right now, when you go to an Alamo...In fact, it cracks me up, people have no idea that we have more than a couple. They’re like, “What do you mean there’s 41 Alamos? That’s my community theater. That’s where I go and I see my friends, and everybody knows me.” So that experience and finding the economy of scale, it’s hard to scale and keep that soul where everyone thinks there’s only one Alamo. That’s what we want to do. And I believe that you can do that.
What do you think are the most critical elements of getting scale right, but still making it feel small? Just very personally, I always think of The Verge as a big thing that feels small. I think our audience, they know who we are, but we have bigger ambitions. So what do you think are the key elements to making it feel small, even as you get bigger?
It’s always a cost issue. How do you do that? So I think the way you do it is you know what your secret sauce is. You stay focused on that. And then you scale the hell out of your back of the house, your accounting functions, your supply chain, all of that stuff. You bring technology in and make it as effective and efficient as possible. So that you have the money, the time, the mindshare, the resources to create those individual experiences. So that when you do go to Alamo in LA versus Alamo in Dallas, or Winchester, Virginia, you have that local feeling. That is our goal and will continue to be.
Great. Well, last question. It’s a hard one, I apologize.
I don’t know if anybody has the answer. I’m curious, so I ask everybody. What’s the next sign you’re looking for, for your business, that we will be on the right track? Is it the vaccine news today? Is it a more coordinated federal and state policy? What’s the indicator that you’re waiting for that says, “Okay, we can get back to the plan”?
Yeah, I agree, this is a hard one, but I think there’s a couple. First of all, I do think the announcement of the vaccine gives me incredible hope. What’s not being talked about a lot are the therapeuticals. I think that is huge. So a combination of vaccine, therapeuticals, and then a coordinated government approach, that from a macro perspective is what we need. And then from an industry perspective, we need to have the slate come back in totality. Meaning, we need a coordinated slate again.
It’s not [that] one movie pulls out, but rather the whole thing moves. If it needs to move out to April, it all moves out to April, but one studio doesn’t leave another studio hanging or whatever. That can’t continue. So when those two things happen, we will have a ton more confidence of moving forward. I’m pretty hopeful that that is [an] April-ish timeframe.
Yeah, I do too. Well, Shelli, thank you so much for joining us. It was a great conversation.
Thank you, and it was a pleasure to be here.
<strong>Decoder with Nilay Patel</strong> /
A new podcast from The Verge about big ideas and other problems.