Shelli Taylor, CEO of Alamo Drafthouse Cinema, talks about how the Austin-based chain has emerged from Chapter 11 bankruptcy as a fitter and smarter operation — with big plans ahead.
Shelli Taylor is CEO of Alamo Drafthouse Cinema, the Texas-based chain established by Tim League as a single-screen theatre in Austin, Texas in 1997. It is renowned for an eclectic slate of new releases as well as a vibrant repertory programme, fan events, premium on-site food and drink, and a strict no-talking, no-texting policy during screenings.
Taylor was appointed in April 2020, when League became executive chairman. During the pandemic she worked on the March 2021 sale of the company’s assets to senior lenders including Altamont Capital Partners and Fortress Investment Group, League and other investors. The company entered into voluntary Chapter 11 bankruptcy to enable a financial restructure that positioned it for growth.
Alamo venues eventually reopened, although five sites closed permanently (one each in Austin, Dallas and Kansas City, and two in the San Antonio area) and the chain currently operates 36 US theatres. Pandemic initiatives include private rental for families and friends, and curated VoD platform Alamo On Demand. Earlier this year, Alamo Drafthouse announced it would be opening seven new sites across the country, including Washington DC, Staten Island and Chicago.
Among her pre-Alamo executive career highlights, Taylor was at Starbucks for 20 years where she played a key role in the company’s expansion in China; served as VP of Disney English, China’s leading immersive English-language provider for children; and most recently served as president and COO of United PF Partners, overseeing 169 US fitness facilities.
How are the company’s finances today in light of the pandemic and the Chapter 11 bankruptcy?
We’re in a healthy position. Like everyone who went through Covid‑19, we were faced with incredibly difficult choices but we used that time wisely, whether it was looking at the bankruptcy, renegotiating all of our leases, or working through all our major contracts and terms. We used that to improve the unit economics of our business. I’m thankful the theatres are now open and business for the most part is back to normal. During the pandemic, we did close a few locations that did not make sense financially. We made those painful decisions, but it’s allowed us to operate healthily today and, more importantly, to bring on new locations.
Why should people go to the cinema these days?
It’s that whole communal experience. You can watch [SXSW opening night film] Everything Everywhere All At Once, which is one of my favourite films right now. You’ll be able to watch that somewhere else on the small screen [eventually] and it will not have the same impact it has when you’re in a community of several hundred people enjoying a very fun, surprising movie.
There are so many options. The pressure on our industry is not about the choice — choice is good and increases audience viewership and increases opportunity for filmmakers to get their stories out in different ways — but how do we create the best experience, whether it be presentation, facilities, cleanliness of facilities, the type of food we’re providing, the people we’re hiring and that experience of joy that we can uniquely create.
Has cinema as a leisure activity reached its peak and if not, how does it grow from here?
Absolutely not. If anything the pandemic created a deeper desire for people to have experiences outside of the home that bring them joy. You will see Rolling Roadshow come back this year, Alamo Drafthouse Movie Parties will come back in a bigger way throughout the summer. For us it’s about how do we do more of what we’ve been doing and find new ways to surprise and delight, and then continue to open more theatres.
Tell us more about Rolling Roadshow, which is not venue specific, and Alamo Drafthouse Movie Parties, which happen at all locations.
Roadshow is a pop-up theatre, usually outside but it can be indoors, where we bring a movie to life in a way that no-one else can. The most famous example is Jaws On The Water, where we showed Jaws on a pop-up giant screen and our audience are sitting in inner tubes on the water. We’ve got one in the works for Top Gun: Maverick. Movie Parties is a similar idea. Our programming and marketing teams will watch a movie and find a way to bring it to life. It could be a special feast created around that movie, or it could be glow sticks or hats or other things.
What were the lessons learned from the pandemic?
That your guests are the most important element of your business. We provide a huge experience and they bring the other half. We will continue to double down on excellence in that overall experience. It’s making sure the seats and the carpet, the projectors and everything are world class.
The second lesson is that most of our guests have no idea that we have multiple locations in multiple states across the US and I never want that feeling to go away. We want to be available to more people because we know that we do the cinema experience, in my humble opinion, better than anyone else.
When did Alamo Drafthouse and the broader exhibition community see the light at the end of the tunnel?
For us, getting through bankruptcy was the beginning and being able to look and say we had enough capital and [operational] structure to ensure a very short-term profitability and therefore viability over the long haul, because when you come out of bankruptcy it does not mean you’re immediately profitable.
More broadly, what took place over Q4 of 2021 and Q1 of this year is that this incredible movie slate came back and it stuck. People showed up in droves for Spider-Man: No Way Home and the run for that movie was phenomenal. But it wasn’t just a one-hit wonder because there are so many other great films that have come since. We’re positioned to have the best quarter [Q1 2022] since the pandemic and even before that, on par with previous years. We see nothing but opportunity, and we’re thankful the studios are showing up the way that they are.
The Covid-19 pandemic has shrunk the exclusive theatrical window. How has that impacted Alamo Drafthouse?
I’ve always been a little perplexed by these numbers — 90 days, 45 days. They’re arbitrary. Each film deserves its own strategy and that may be 90, 120 days in a theatre, straight to streaming, or a hybrid. We see [the growing distribution choices] as creating even more flexibility for our audiences. We appeal to a broad audience. We’re all in service of supporting a movie in the way that could and should be supported and give it the best chance to reach as many people as possible.
What are your views on dynamic ticket pricing?
It’s such an interesting topic because from what I can tell dynamic pricing or variable pricing, depending on how you want to define it, has been a constant in the industry for years. Certainly there are minimums that you can’t drop below and then maximums of what your audience will support. The bigger [topic] is that pricing is a function of the experience that you create, so when filmmakers make incredible products and the studios deliver that to us, we create an incredible experience wrapping around that film. Then we’ll earn our right to price.
It’s often said exhibitors need to do better at alternative programming. Alamo excels at this. Has it always been fundamental to Tim League’s vision?
When Tim started Alamo he basically said, “I love movies and love going, so how do I make it the experience I want, which is film, food and fun? How do you give people experiences that they might not have otherwise?” There are so many choices out there and what we don’t want is to pigeonhole our audiences. Rather, we would like to expand their world and give them this opportunity to explore all sorts of genres. It has been part of Alamo from day one.
One of your upcoming sites is the Alamo Drafthouse Staten Island, which has a kung-fu theme.
It will be super fun and is expected to open in May or June, depending on permits. We’ll have The Flying Guillotine bar and while kung-fu movies will be our specialty at that location and we will over-index, we will show other kinds of movies.
Are there any plans to open Alamo Drafthouse theatres outside the US?
Today’s focus is solely on continuing to rebuild our business and proving that we’re here to stay. Over the long run, who knows? I have a background in international business and a passion for taking great brands to other countries but it would be long-term, not a short-term vision.