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SALT LAKE CITY — When Water Gardens opened its first movie theater in 2010, the average cost of a movie ticket had been rising 4 percent annually for two years.
Despite defying the national trend by offering tickets for $3.50, Water Gardens was able to turn a profit in three months, according to co-founder Michael Daniels. They opened their fourth location, in Holladay, on Oct. 17.
Water Gardens stands apart from some other movie theaters based on what it does, and does not, offer. Ticket prices are the same all day and concessions are all between $1 and $3. They don't show R-rated movies, or any movies at all on Sundays.
Daniels said they based their business decisions on an in-depth study of the area, and one of his passions is helping customers see movies on the big screen again after many lost their jobs or faced reduced income after the recession in 2008.
“We’re trying to reach a group of people who have stopped going to the movies because they can’t afford it,” he said.
Movie attendance reached a 16-year low nationally in 2011, according to The Los Angeles Times.
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Daniels and his business partner Tyler Walters were prompted to start their own movie theater when they couldn't understand why their neighborhood Pleasant Grove theater closed in 2010. Their research suggested people in their area would appreciate lower prices and a focus on different films.
To test how much people were willing to pay for concessions, Daniels said he would lay out candy for his neighbors and ask them how many packages they would buy at different price points.
“Invariably, people would spend more, in dollars, on ones that were priced for less,” he said.
Daniels said they have been able to see success so far with this strategy with their theaters in Pleasant Grove, Spanish Fork and Keolu, Hawaii. He said the new Holladay location, at 1945 E. Murray Holladay Road, made a lot of sense and had a high probability of success.
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“We were willing to go ahead and do it because we really believe the area will be able to support that at a $3.50 ticket rate,” he said.
The old theater closed on Sept. 30, and Water Gardens started re-branding, renovation and repairs the next day. They opened to 500 guests on the first day.
Based on looking at industry publications, Daniels said he believes the trend of rising ticket and concession prices will continue to rise in bigger theaters.
“You’re always going to have people who need to be there on opening night for 'Harry Potter,' 'Twilight,' or whatever, but then there are the people who can wait four or six weeks, and they can come back,” he said.
