In December 1992, after nine months of operation, Lime Light Cinema of Victoria, British Columbia, was still not generating satisfactory revenues. To attract larger audiences, head office in Montreal had recently decided on major changes in the programming format and the pricing strategy. Olga Siroonian, the new manager, was faced with the responsibility of successfully implement these changes.
Company History
The theatre had operated as a pornographic cinema. Under the name the Cosmopolitan Cinema, it had shown pornographic films for fifteen years. In January 1992, Celebrity Films in Montreal purchased the business as part of an expansion plan. To reposition the theatre as a first-run art-film cinema that featured two films per evening, major renovations were undertaken in late February. In March, Celebrity Films reopened that theatre as the New Cosmopolitan Cinema.
From the beginning, the new cinema encountered image problems. Even though the concept had changed, the puclic still thought of it as a place to see pornographic films. In October, the name was changed to Lime Light Cinema, and a new marquee was erected. In November, the oweners fired the manager and promoted the assistant manager (who has been on the job for four months), Olga, to the position. Prior to becoming assistant manager, Olga had worked for five months as one of the theatre’s ushers.
Company Problems
After the name change and Olga’s new management, business improved slightly. In January and February, the average audience size had been about sixty-persons per show, well below the 375 seat capacity. Attendance in December was up to ninety to one hundred people per show. Olga remarked, “AS we will be receiving an average admittance fee of $2.00 per head, we will have to pack the place every night to break-event.”
In Olga’s opinion, the theatre had two problems: people did not know much about the theatre; and they did not know much about the films being shown. “People don’t know what they are getting when they go to see an art film,” she maintained.
After eight month of operations, Celebrity Films finally realized that Victoria did not have the population base or the audience interest to support a “first-run art-film cinema” (cost data is outline in table 1)
Changes in Concept
Responding to low attendance figures, management changed the theatre’s concept again. Beginning in mid-December, Lime Light Cinema became a repertory theatre featuring two different movies ever night (one shown at 7pm and the other at 9:15pm). Features would include second-run commercial films (movies shown two to thee months after their premiere), occasional premiere films, and first-run art-films. Olga explained, “Most of the films shown will be been in Victoria already. People will know the films and that will make our promotion job a lot easier,: Variety and reduced prices were key elements in the new strategy.
Lime Light planned to move (on January 1st 1993) from a straight admission fee od $3 for students and $4 for adults to memberships. Company management felt the old prices were not low enough to attract a sufficient number of people to come to see a film with which they were unfamiliar. Members would pay $4 a year to join the cinema and $1.50 per show admission fee. For nonmembers, the fee would be $2.50. At these prices, Lime Light Cinema would be offering lower prices that the other repertory theatre in town, which charged at $4 membership fee and @3.50 and $3.50 for admission. Initially Lime Light had ordered five thousand membership cards.
Olga had increased theatre revenues and profits by making changes in the candy-bar operation – adding or deleting products and readjusting prices on soft drinks and popcorn. The average receipt per patron had increased from about fifty cents to seventy five cents. A high percentage of the theatre’s profits would come from the candy-bar operation, so these changes were important.
The Theatre Industry
There were right commercial theatres and one repertory theatre in Victoria (see table 2 for population data). Originally, Lime Light Cinema was not directly competing with either type of theatre. However, with the changes they had made, they would be competing directly with the other repertory theatre in town, which was very well established. Olga expected to have some initial difficultly competiting for business, but believed that there was room for two repertory theatres in Victoria.
Another source of competition was home videotape machines. By the time second-run commercial films were shown at the Lime Light Cinema they were available on video cassettes. People could purchase or rent these cassettes for home viewing. Premiere films would not be affected by cassette sales. Art films were generally not available to the public on cassette.
A variety of customers patronized the cinema. Olga estimated that 35 percent of her customers were students at the University of Victoria. Customers could categorized as follows: regular movie goers who could afford to go to commercial theatres; avid movie buffs, including film students from the University of Victoria; people who wanted something offbeat and different; and people who were just lookling for an inexpensive night out. Olga believed the theatre was catering to everybody.
Promoting the New Concept
Approximately seventeen thousand dollars had been allocated to promotion for the year. In the past, most of the cinema’s advertising had been done in newspapers. Lime Light Cinema placed a daily ad in the Vitoria Times-Columnist and an occasional ad in the Martlet, the university’s student newspaper. (see figs 1 & 2). Olga felt that radio advertising was generally too expensive, but she would use it ocassionally to promote premiere features. In addition, bimonthly tabloid-type program schedules were distributed to potential customers through record stores and doughnut shops. These schedules were provided by head office (information onmedia costs is provided in table 3). Olga did not really know if the advertising was effective. She did know that the furute promotional strategy for the repertory concept had to be successful or she was out of a job.
The objective of the new promotional was to make people aware of the repertory format and the rne prices, and to sell memberships. So far, Olga had purchased a sixty-line ad in the Victoria Times-Columnist to announce the opening of the repertory cinema and had arranged to interview of a CHEK-TV entertainment program to talk about the new concept. She was thinking to arrange a couple of radio interview as well, but she knew more had to be done.

Table 1: Theatre Cost Information
Film Rental Per Showing $75.00
Estimated Management Salaraies $20,000 annual
Estimated Theatre Lease (Building & Utilities) $2,000 monthly
Estimated Gross Margin on Candy Bar Operation 65%

Average Staffing Per Night
1 Cashier
1 Candy Bar Person (2 on Friday & Saturday)
2 Ushers
1 Doorman
1 Projectionist

Table 2: Population Stats
Population 255055*
Rank in twenty largest Canadian cities 15th
Age Groups
Under 14
15-24
25-34
35-44
Over 44
43395
37335
42015
35430
96880
Average Weekly Earning $391.07
• Student population was 10000
SOURCE: Financial Post Canadian Markets, 1992
Table 3: Advertising Rates
Newspaper Circulation Lines Rate (per Column)
Vitoria Times Columnist 78796 (total paid daily) $2.16
$1.61 (Over 10000 lines per year)
TV Plus (Victoria edition; free distribution) 22913 (weekly; 26 week schedule) ¼ page – $105.00/ week
The Martlet 10,000 weekly $0.62
$0.48 (rate weekly contract)

Radio AAA AA A B Duration
CFax $55 $43 $35 $28 60 Seconds
$45 $34 $29 $23 30 Seconds

Reach Plan $35 per spot for 21 sixty second spots, made up of $ AAA, 6AA, 6A and 5B spots
CFUV: University of Vitoria 60 seonds – $2.00

Figure 1: Daily Ad in the Vitoria Times-Columnist
Lime Light
Cinema
Last night – Double Bill
Jane Fonda in JULIA (PG) 7:00
Meryl Streep in PLENTY (AA) 9:00
Figure 2: Weekly Ad in the Martlet
Lime Light
Cinema

Nov 28-30 Premiere
Nicolas Roeg’s
INSIGNIFICANCE AA
(Einstien meets Marilyn Monroe)
________________________________________________
Nov 28-30 Premiere
Nicolas Roeg’s
INSIGNIFICANCE AA
(Einstien meets Marilyn Monroe)
________________________________________________
Nov 28-30 Premiere
Nicolas Roeg’s
INSIGNIFICANCE AA
(Einstien meets Marilyn Monroe)
________________________________________________
Nov 28-30 Premiere
Nicolas Roeg’s
INSIGNIFICANCE AA
(Einstien meets Marilyn Monroe)
________________________________________________
93 Monroe St
423-1111
MARKS BREAKDOWN

Background 10
SWOT 10
Marketing Mix 10
Critical Issues 10
Analysis 20
Recommendations 10
Financials 10
Use of Financials 10
Marketing Concepts 10

TOTAL 100.