SIC 7833 Drive-In Motion Picture Theaters

 
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SIC 7833

This category covers commercially operated theaters, commonly known as drive-ins, primarily engaged in the outdoor exhibition of motion pictures.

NAICS CODE(S)

512132

Drive-In Motion Picture Theaters

INDUSTRY SNAPSHOT

The drive-in theater industry is a phenomenon that peaked in the 1950s, then declined precipitously in the 1970s and 1980s. According to the United Drive-In Theater Owners Association, there were 397 drive-in theaters, or "ozoners," as they were sometimes called, with 650 screens, in the United States in 2006. This industry has greatly dwindled from its peak in 1952 when it surpassed the traditional theater industry in attendance. Between 1978 and 1988, more than 1,000 facilities were closed. The number of drive-in theaters has, however, been more stable since the late 1980s. Since the 1990s, 40 drive-ins have been built and 63 have been reopened. In 2006, the industry was estimated to employ 1,860 people. Total receipts were $276 million.

The affordability and convenience of an evening at a drive-in, the desire to get out of the house during pleasant weather, plus nostalgia for the 1950s, which many drive-ins are touting, has kept the drive-in from total extinction. "A trip to the drive-in is a movie-going paradox. It's more social than any indoor theater (where you're not even allowed to talk, much less walk your dog or throw a Frisbee with the guy down the row)…. Likewise, drive-ins combine the best of commercial-theater scale with home-theater indulgence: No home entertainment system gives you a 2,600-square foot screen, and in no multiplex can you eat, smoke and drink yourself silly," said reporter Steve Hendrix in the Washington Post.

ORGANIZATION AND STRUCTURE

The drive-in theater industry consisted of largely of independent operators and a few regional chains. During the late 1940s, chains owned 31.9 percent of establishments and controlled 39.8 percent of car capacity. Some of the larger chains included General Cinema Corporation and Park-In Theatres, Inc., in the eastern United States; Pacific Drive-In Theaters; and Paramount-Richards Theatres, Inc., in the southern United States.

Since the drive-in industry was considered a competitor of the traditional theater industry for many years, their owners were not welcomed into associations such as Theatre Owners of America or Allied States Association of Motion Picture Exhibitors. However, since many drive-in operators were so successful in their early years, they did not perceive a need for professional affiliation or the information-sharing and lobbying services that such an association could provide until the industry began to reach its nadir.

Financial Structure

Like traditional theaters, drive-in theaters derived profits from the two primary activities of admission fees and concessions. Most drive-ins were seasonal operations open an average of eight months each year. During their most prosperous years, 88 percent of drive-ins charged admission on a per-adult basis, admitting children for free. As the industry declined in the 1980s, operators desperate for patronage switched to a per-car admission. During the 1950s, annual profits ranged from 15 to 30 percent of invested capital, which was a very high margin compared to indoor theaters, which averaged about 10 percent profit. Concessions usually contributed 35 to 40 percent of a drive-in's gross receipts.

Drive-ins required a relatively high initial investment. It is estimated that the first drive-in theater cost about $30,000 to...

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