Drive-In Motion Picture Theaters

SIC 7833

Companies in this industry

Industry report:

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

Industry Snapshot

The drive-in theater industry is a phenomenon that peaked in the 1950s; in 1952, more people attended drive-in theaters than regular theaters. According to the United Drive-In Theater Owners Association (UDITOA), by 1958 there were 4,063 drive-in theaters in the United States. The industry declined precipitously throughout the 1970s and 1980s, however, and between 1978 and 1988, more than 1,000 facilities were closed. Numbers continued to decline in the 1990s, and by the turn of the millennium, 447 sites operated 684 screens. According to the UDITOA, by the end of 2011, these figures had dropped to 606 screens at 366 drive-in theater locations, or "ozoners," as they were sometimes called.

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 has traditionally consisted 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 build. After World War II, when the industry reached its zenith, the average initial investment was about $100,000, not including the land. Although high, this capital outlay was only about 30 percent of the average cost of an indoor theater at the time. Regular expenses included film rental, energy consumption for projection and food preparation, payroll, and real estate. Payroll typically constituted about 28 percent of a drive-in's operating expenses.

Background and Development

The concept of the drive-in theater was first patented and introduced by Richard Milton Hollingshead, Jr., in 1933. Known as "the father of the drive-in," Hollingshead opened the first establishment in Camden, New Jersey, in June of that year. The "Automobile Movie Theatre" featured rows of inclines on which patrons parked their cars; a large, central screen; three loudspeakers atop the screen to project the movie's soundtrack; and a barricade around the perimeter of the lot to prevent would-be viewers from sneaking in.

Hollingshead had trouble enforcing his patent, and he watched his idea spread unauthorized to Pennsylvania, Texas, California, Massachusetts, Ohio, Rhode Island, Florida, and Michigan by the end of the decade. Many of the new businesses were unlicensed, and Hollingshead spent time and money trying to enforce his patent. He eventually petitioned the U.S. Supreme Court, but in 1949, his patent was declared invalid on the basis that it "lacked invention."

The industry as a whole faced other problems that prevented it from catching on until the late 1940s and early 1950s. Some were technical, such as poor sound quality, faulty synchronization of image and soundtrack, and distortion of the picture at some vantage points that hampered the viewing experience. In addition, neighbors of these early drive-ins protested the loud broadcast of movie soundtracks throughout the evening hours. Other obstacles were rooted in Hollywood studio politics. Many big-budget movie producers, who controlled production and distribution of films throughout the 1940s, refused to circulate their best movies to drive-ins.

These problems were partly alleviated in the late 1930s, when the major Hollywood studios began to make their films available, in later runs, to drive-ins. Improvements in projection technology permitted patrons in drive-ins with a 1,000-car capacity to see a movie more clearly. In addition, the development of individually-controlled, in-car speakers solved the sound problem in 1941. But just as the drive-in industry was poised to erupt into a full-fledged craze, World War II's gasoline rationing, rubber shortages, and building restrictions prohibiting "unnecessary construction" postponed the movement.

In 1942, there were 95 drive-ins in 27 states. The average lot held 400 cars, took up seven or eight acres, and had one screen. The number of establishments remained relatively constant until the end of the war, when it exploded. By the end of the 1940s, almost three new drive-ins were opening daily.

Kerry Seagrave, author of Drive-in Theaters: A History from Their Inception in 1933, attributed the craze to two social factors, America's love affair with the automobile and the postwar baby boom. Kerry noted that "ozoners were an ideal place for a young family with children--no baby-sitter needed, no parking problems, dress as you like, and [they provided] relatively cheap entertainment." In keeping with the family orientation of drive-ins, free admission for children under 12, playgrounds, and even bottle warmers soon became industry standards.

The industry reached an apex in August 1952, when the average weekly attendance at outdoor theaters surpassed that of traditional theaters by 1.3 million. By 1955, there were more than 3,700 drive-in theaters in the United States. That number peaked in 1958, when more than 4,000 drive-ins brought in $230.42 million. Despite the technological limitations that dictated a 1,300-car maximum capacity, some operators built 2,500-car theaters to capitalize on the trend. During this peak decade, it did not seem to matter whether the patron could see the film clearly since most of the films shown were still the "table scraps" of the indoor theater industry anyway.

Drive-ins lured return patrons by offering several added attractions. A ticket might entitle the bearer to a free door prize for each child, or a theater might have a live band, dance troupe, or acrobatic act before the show. Some venues offered free milk and diapers for babies, a children's playground, or even a miniature golf and a driving range.

Although many operators of indoor movie theaters blamed the precipitous decline in their attendance figures during the 1950s in part on drive-ins, Seagrave maintained that drive-ins kept the movie industry afloat during the 1950s. However, growth began to stagnate by the end of the decade. The shakeout between 1958 and 1963, when the number of drive-ins decreased from 4,063 to 3,502, probably eliminated the most inefficient operators from the industry. The industry declined significantly in the early 1960s, then leveled off until the late 1970s. Another steady decline began in the late 1970s and continued into the early 1990s as the drive-in theater neared extinction. This decline occurred for a variety of societal and economic reasons.

Family patronage, which Seagrave called "the backbone of the drive-in," dropped off in the 1960s and 1970s. Some drive-in playgrounds were eliminated due to the fear of lawsuits resulting from possible injuries. Once the side attractions were eliminated, all drive-ins had left to offer was the film itself, which was still likely to be second-run or second-rate. In addition, the content of films began to change significantly in the late 1960s, hastened by the elimination of the Production Code in 1966, which had restricted the use of potentially offensive material. The introduction of nudity, profanity, excessive violence, and explicit sexuality made going to films less likely to be a regular family activity.

By the 1980s, cable television and VCRs had firmly supplanted the economy and convenience of drive-ins. Rising land values further eroded the viability of drive-ins as it became more cost effective to develop the land rather than try to maintain outdoor exhibitions for a few months of the year.

Seagrave summarized the demise of the industry in his 1993 book, saying, "Drive-ins today sit poised on the edge of extinction. The last handful may be around yet for decades. A few may be kept alive as sort of living museums, perhaps subsidized. But they are finished as a part of the American landscape. New ones will never be built."

Bob Wagner, owner of the Bel-Air Drive-In Theater in Churchville, Maryland, agreed. He told the Washington Post, "We'll be around for awhile longer, I think. I don't see anybody ever building a new drive-in. But we'll keep this one going by doing whatever we can think of."

No longer venues for low budget "B" pictures and second runs of top level films, drive-ins offer the same features that are shown at indoor theaters. As with indoor theaters, the amount of business done by drive-ins depends upon the general popularity of film releases. In the summer of 1996, for example, some drive-ins were filled to capacity during showings of the science fiction blockbuster Independence Day.

In addition to being dependent on the appeal of current films, a drive-in's business depends on good weather. "Weather is the key. On a good Friday or Saturday we can get 1,500 to 2,000 people in here. But even the prediction of rain keeps people away," Memphis drive-in owner Larry Pankey explained to the Memphis Commercial Appeal. In 1998, America's oldest remaining drive-in movie theater celebrated its 65th anniversary. Shankweiler's Drive-In, in Orefield, Pennsylvania, remained open from April to September.

The changing style of automobiles created a new problem for drive-ins in the early twenty-first century. Designed for the low and wide sedans that were prevalent in the 1950s, drive-ins must contend with vans, trucks, jeeps, and recreational vehicles that can block the view of customers in regular cars. Relegating high and bulky vehicles to the back row is not always possible due to the increasing number of them.

From 2000 to 2006, there was a decline in operating drive-in movie theaters, but those that weathered the decline did well, maintaining business by appealing largely to family and nostalgic audiences. By combining playground equipment, "diners" serving old-fashioned hamburgers, and programs featuring general audience films, many drive-in owners hoped to carry a fleeting image of Americana far into the millennium. The Drive-In Theater Fan Club and Web sites such as driveintheater.com and driveinmovie.com represent two groups of followers helping to stave off extinction.

Continued interest in the drive-in movie experience was also evidenced by two nontraditional applications. "Guerilla drive-ins" appeared in cities where cult movie fans set up free and sometimes illegal film showings in parking lots. The New York Times estimated that new digital players, projectors, and iPods allowed impromptu setups for as little as $1,500. As enthusiast John Young explained, "It's way more fun to watch 'The Bad News Bears Go to Japan' on the back of the old Y.M.C.A. building than it is to watch reruns of 'Jerry Maquire' on cable by yourself." In Pontiac, Michigan, a commercial equivalent charged $8 for two first-run movies, using a three-screen, 1,000-car-capacity theater set up in the parking lot of the Silverdome sports arena.

At the end of the first decade of the 2000s, drive-ins were holding steady but were not expected to make a significant comeback in the American marketplace primarily because the cost of real estate is prohibitive relative to the income a drive-in generates. Approximately 75 percent of drive-ins were mom-and-pop organizations; because drive-ins do not generate large amounts of money, large corporations, such as AMC, do not invest in outdoor theaters. In 2009 there were approximately 100 drive-ins outside the United States, primarily in Canada and Australia, according to the UDITOA, although drive-ins were growing in popularity in both Russia and China.

As technology turned digital in the late 2000s, drive-ins were hoping to benefit because they had quicker access to new releases (traditionally they were several weeks behind the major theaters). However, the cost to upgrade to digital equipment was significant. To make ends meet, many drive-in owners set up multiplexes so that they could provide multiple showings in a variety of genres to draw in unique audiences. Others, who operate single screens, ran their drive-ins as a semi-retirement or second job. Owners also continued to provide add-on values such as free wi-fi and miniature golf to entertain customers prior to the beginning of the movie.

Current Conditions

According to the UDITOA, Pennsylvania had the most drive-in theaters at the end of 2011, with 33 theaters operating 54 screens. Second was Ohio, with 31 theaters and 48 screens, followed by New York with 28 theaters and 50 screens, Indiana with 21 theaters and 36 screens, and California with 19 theaters and 47 screens. Only four states had no drive-in theaters at all: Hawaii, Alaska, Louisiana, and Delaware. Despite the downturn in the industry, some new theaters were built in the 2000s, including nine in Alabama (plus two reopens), and six in Texas (plus seven reopens).

The fate of the drive-in movie theater at the beginning of the second decade of the twenty-first century remained unknown. Some expressed optimism for the industry, such as John Vincent Jr., president of the UDITOA, who in 2011 declared that "The drive-in theatre not only remains a time honored American icon, but in a down economy still offers the best value available for family entertainment." Others, however, predicted an eventual but inevitable death, due mostly to the inhibitive cost of converting to digital. The conversion to digital remained one of the most pressing issues for the industry.

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