This case gives us a brief introduction of the Alamo Drafthouse in its history, facility layout and delivery system, programming, revenues and cost, advertising and promotion. From the case, we know that the Alamo Drafthouse was founded by Tim and Carrie in Austin after their fist venture failed in art films and featured live music. Compared with other movie theater, the Alamo Drafthouse distinguished itself by the food and drink service offered inside the theater. The seating is arranged with rows of cabaret style tables in front of each row of seats, with an aisle between each row to accommodate waiter service. Customers write their orders on slips of paper, which are picked up by waiters moving quietly between the rows. The Alamo’s programming is divided into two categories, second-run features and special events. Second-runs account for 20 of the 25 screenings per week to appeal to those who have a sophisticated taste in film. Special events are including Austin Film Society events and cult film such as silent movies scored by local bands playing live accompaniment. The price point in the Alamo is below the cost of seeing a first-run film but it is above the price of going to a bargain theater to see a second-run film. After the ticket is purchased, customers spend about 55 percent of this on food and 45 percent on alcohol. They also raised menu prices occasionally to increase spending. Although customers are spending more than they do when they go to a typical theater, the Alamo’s profits are limited by its smaller capacity and high labor costs. When it comes to the advertising and promotion, Tim and Carrie use several low-cost methods. They take advertisements out in the three most read Austin papers, create three-month calendars that list special events and upcoming showings are announced before every feature. They also formed a close relationship with the entertainment publication and get a lot of free public relations exposure. Moreover,...
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