How to Start Your Own Cinema (For Under $15,000)

How to Start Your Own Cinema for Under $15,000

To start things off, check out this inspirational stop-motion lego video that we made to demonstrate Indywood's grand vision for local cinema in the 21st century: The Indywood Manifesto

We started Indywood with very limited funds and very little experience.

We opened our doors to the public about two weeks after moving into our building on Elysian Fields in downtown New Orleans. With no idea what we were doing, we made it work.

There have been two main ingredients to our success: 1.) Passion/hard work. 2.) A lean business model.

We are 100% confident that other people can and should start more neighborhood cinemas like Indywood. And for any entrepreneurial cinema lovers out there, we want to share some tips on starting Indywood to encourage you to start your own little cinema.

Here’s what you’ll need:

The Theater

Space ($1000/month)

How you craft your space is essential to creating the “cinematic experience.” People go to the movies for the experience, so it’s important to give them what they want.

Finding a space might be the most difficult task in starting your cinema. Try to find one in which the rent is pretty low. ($1000 a month is a good number to shoot for.)

And if there is one piece of advice we feel compelled to give you, it’s to foster a good relationship with your landlord. Indywood wouldn’t exist if our wonderful landlord didn’t believe in us.

Screen ($250)

We built our screen out of 2x4s, a sheet of foam, a piece of white cloth and a bucket of silver paint. Hayley (my sister and business partner, if you’re not familiar with the Indywood team) found this helpful “How to build a screen” info. It did us well.

Don’t paint your screen white—that will wash out your image. Paint it a light gray. There’s a reason they call it the “silver screen.”

The dimensions of your screen should be 16:9.

Don’t put your screen too close to the ground, because people have to be able to read subtitles from the back row.

Chairs ($600-$1000)

Your audience MUST be comfortable! Our chairs were our first major investment after we opened up. We got a good deal from a hotel liquidation store. They gave us 30 fine, red, luxurious seats for $600.

Your chairs should probably be red. That’s just how movie theaters are.

Dimmable Lights ($100)

It is essential that you are able to dim your lights. There’s something sacred about the moment when the lights go down in a movie theater and the show begins. You want to be able to provide that experience. At Indywood we use a one of these dimmers that you can plug into an extension chord.

Wall Paint ($150)

Paint the walls of your theater matte-black so they don’t reflect the light of the screen. This will help your image pop and enable your viewers to become fully engrossed in the screen.

Curtains: $300 (or Trash Bags: $20)

You must block all light from the outside world. That means cover any windows in your space. We started out using trash bags, which solves the problem in utilitarian style. However, for the sake of the aesthetics of your space, it’s good to upgrade to light-canceling curtains.

Also, if you have a door that opens directly into your theater, your screen will get washed out by a flood of daylight anytime someone walks into your space for a matinee. You’ll want to hang a curtain to block the light from the door.

Soundproofing ($500?)

If your theater is close to another business or residence, to maintain good relations with your neighbors, you’ll want to dampen the sound of the movie. It’s also good for protecting your viewers from the sound of motorcyclists and police sirens in the street. This isn’t too big of an issue for us at Indywood, but I’ve seen other theaters solve this problem by stylishly hanging Persian rugs on their walls.

The Equipment

Projector ($700-$1000)

There are two types of digital projector: LED and DLP. As a student of cinematography, I suggest you use DLP. Digital videos, especially compressed ones, can look terribly chunky in the shadowy and out-of-focus parts of an image. DLP projectors help round out this digital chunkiness, because they have an internal chip with thousands of tiny mirrors. Each mirror is an analog for each digital pixel in the image. Because the digital image is bounced off these tiny mirrors, the light from the image has a natural, rounded quality.

We’ve done a sort of Pepsi/Coca Cola test comparing an LED and DLP projector, and the filmmakers in the crowd unanimously preferred DLP.

Here are a couple other things to think about:

Lumens: You want a projector that’s somewhere between 2000 and 4000 lumens. You don’t want your image to be too dim, of course, but you also don’t want it to be too bright. Many people think the brighter the better, but if your projector is too bright, you’ll wear out the eyes of your audience. Many projectors are much brighter than 4000 lumens, but those projectors are designed to be used in classrooms and business meetings—environments where there is a lot of light in the room that competes with the light of the projector. Since your theater will be very dark, you don’t need a super-bright projector.

Contrast ratio: You want your contrast to be 10,000:1 or higher. The contrast ratio gives you a more dynamic range of highlights, mids and shadows. The less contrast ratio you have, the more the dark parts of your frame will get “crushed,” meaning they will all become the same level of shadow instead of having a dynamic range.

A great resource for learning about and comparing projectors is ProjectorCentral.com. That site taught me everything I know.

Here’s a page from that site that will give you the basics on what to consider when buying a projector.

At Indywood, we use an Acer DLP projector that cost $750. We highly recommend Acer. We also highly recommend NOT using an Epson projector (the most ubiquitous brand in stores like Best Buy). I’ve played with many Epson projectors, and they all seem to have weak HDMI inputs.

Blu-ray/DVD Player ($100)

You’ll be playing most of your films off your Blu-ray player, so choose a good one. We recommend you get one that has actual buttons on it, not just a remote. It seems to be the fad these days for Blu-ray manufacturers not to put buttons on their players, but this can be a fatal flaw. Remotes will inevitably be misplaced.

Audio/Video Receiver ($300)

The receiver is the unsung hero of the technical equation—it is the device that translates the signal coming from the Blu-ray player and then sends that signal out to the projector and speakers. You want a receiver that has multiple HDMI inputs and an HDMI output. You also want at least 3.1 surround-sound outputs. (It’s good to have 5.1, for possible upgrades to your sound set-up.)

Speakers ($1500)

You can make a theater work with stereo sound (meaning just two speakers). But we recommend 3.1 surround sound (at least). 3.1 means two right/left channel speakers, a center channel speaker and a subwoofer (that’s the O.1). The center speaker is very important. It will boost the clarity of the dialogue in the films you screen.

Of course 5.1 surround sound is ideal (meaning two more right/left speakers at the back of your theater). Lately, many big theaters are upgrading to 7.1 surround sound and more. At Indywood, we think 7.1 is ridiculous and unnecessary. Most films you’ll get are not mastered to play 7.1, so there’s no point in having it.

HDMI Cables ($200)

You’ll need a lot of them! You could use VGA cables instead, but HDMI cables are better because they carry both video and audio.

Computer ($1200)

Your computer is what you’ll play your trailers and pre-show titles off of. Also, if you connect directly with filmmakers or film festivals, they will often give you video files to play instead of Blu-rays or DVDs. You’ll be able to play these files directly off your computer.

You want a computer with a good video card and at least 8 gigs of RAM. Also, make sure to keep a lot of room (50 gigs at least) on your internal hard drive.

At Indywood, we are fond of Macs, because they’re reliable and they need little maintenance. We started Indywood by screening directly off my MacBook Pro. Now we use a dedicated Mac Mini. It works great!

Software

*VLC (Free) *

This is far and away the best software for playing videos. VLC enables you to create video playlists, which means you can play your pre-show titles and trailers seamlessly.

Final Cut Pro X ($300)

You’ll need video editing software to create pre-show titles. You can sell ads in your pre-show titles, so it can be a good income stream for your theater.

You can use any video editing software, but I think Final Cut Pro X is the sexiest. (Many video editors would disagree with me, so do a little research and pick what fits you.)

*Illustrator and Photoshop ($600) *

You’ll use these two programs to create all of your visual media.

*Handbrake *

This is great, free software for ripping Blu-rays and DVDs.

ClipGrab

We download all of our trailers from YouTube and Vimeo. ClipGrab is fantastic, free software for doing this.

Ticket/Concessions Booth

The place where you sell tickets and serve popcorn will be the first impression your viewers have of your theater, so it’s important to make it welcoming and efficient.

Point of Sale (POS) System ($500)

You need a device by which you can track your transactions. Also, you’ll probably want to be able to accept credit and debit cards. We use Square, and we love it.

Cash Register ($100)

People will steal from you. It sucks, but it’s the truth. You need a cash register to protect your money.

Popcorn Machine ($250)

A movie theater simply must have popcorn!

Butter Warmer ($200)

Oh man, we’ve had a lot of challenges finding a good butter warmer. But you must have real butter—none of this fake MSG stuff they serve at the megaplexes. We ended up designing our own butter-warming system, so if you have questions, we’d be happy to consult one-on-one.

Candy ($150)

Get a membership to Costco or Restaurant Depot.

Refrigerator ($100)

Gotta keep your drinks cold.

Film Licensing

This is how film distribution works: Filmmakers sell their films to distribution companies, and then the distribution companies get the films into theaters.

So as a theater owner and film booker, you need contact with distribution companies. There are many out there, and making contact with them can be circuitous and arduous.

If you’re serious about starting a cinema, I can help you connect with distribution companies.

IMDbPro ($15/month)

This is an invaluable resource. When you sign up for an IMDbPro membership, you can find the distributor of just about any film. Once you find who distributes the film, you can give them a call or send them an email to make a licensing request.

Licensing Fees (~$2000/month)

Most distribution companies ask for a flat fee up front vs. a percentage of ticket sales. For example, $250 vs. 35% is a very typical licensing fee. This means you pay the distribution company $250 or 35%, whichever is higher. So if 35% of your ticket sales is $255, you owe the company $5 after the run.

Haggling

Never be afraid to haggle with distribution companies—that’s part of the game.

Reporting Your Numbers

You must provide a Box Office Report (BOR) for every film you screen. In the BOR, you will tell the distribution company how many tickets you sold to each screening and how much money you made. So be sure to keep track of that!

Here’s an Excel template for a BOR.

The Team

We started Indywood with a team of two: My sister Hayley and me. We’ve filled a lot of roles in the past year. You can start a movie theater even if it’s just you going it alone, but know that you’ll have to fill all these roles:

The Business Person

I could never have started Indywood without my sister Hayley. She’s the business side of things. Starting a movie theater, you’ll need to get an occupancy license. You need insurance. You need to pay taxes. You need to track your expenses. A business can’t function without someone making sure you’re following the rules and generally staying in the black.

The Booker

A movie theater needs movies. There’s a lot of hassle getting them—reporting the grosses and paying the necessary fees. You need someone with good taste for choosing films, and who will also do the work of acquiring them legally.

The Marketing Person

You’ll need a website, a stalwart social-media presence, contact with the local press and probably a weekly newsletter. It’s also a good idea to put out posters at least once a month. Someone has to manage all that.

The Handyman

If you start a brick-and-mortar business, a myriad of things will malfunction in your space. Your bathroom has to work, your electrical set-up must be non-hazardous, your lightbulbs will need to be replaced and your floors will need to be mopped. Someone has to take care of all those details.

Adding It Up

So if we budget on the liberal side, all that adds up to $11,535. That’s really not very much money. It’s very doable. You should do it! If you feel inspired.

Of course, that is only an estimation, and starting your own theater is bound to cost more than that. While starting Indywood, we wasted quite a bit of money in the process of learning. You’re bound to do the same.

But unlike us a year ago, you are not alone. If you seriously want to start your own cinema, Indywood is here to support you in any way we can. We’d love it if you learn from our mistakes! We have learned sooooo much in the past year, and we want to share our in-the-trenches knowledge to help you start a cinema.

Finally, there are two more things you’ll need:

1.) Raw Grit

Be prepared to fail constantly. You will fail publicly all the time, and you will experience maximum embarrassment.

Starting a business is hard, and your first year is like boot camp.

But you know what the Navy Seals say about their boot camp? “Never ring the bell.” You ring the bell when you’ve given up. Never give up. Never. If you want to be an entrepreneur, you must never, NEVER, ring the bell. (Here’s a great 20 minute speech on that subject.)

2.) A Business Plan

Any business needs a business plan. Fundamentally, a business plan is an outline for making more money than you spend. It’s a beautiful thing.

We started Indywood with a “lean” business model. In the next post, I’ll explain what that means.