I’ll admit up front that I know very little about the real economics of movie theaters. I don’t know much more than the standard refrain that they make all their money on popcorn and soda. And given the way movie theater chains construct their experiences around the popcorn and soda I have no reason to think otherwise. That said, I had a movie experience the other night that was pretty different than the norm.

We wanted to see Stranger Than Fiction (which I thought was great btw). Only one problem – Stranger Than Fiction opened way back on November 10, 2006. Most movies are gone in a flash, but Stranger than Fiction did moderately well given its cost (made 47 million worldwide in box office, cost 30 million to make) so it lasted a bit longer than many. It was in theaters until December 21, 2006, a full six weeks.

Strangely however, the movie was still playing this past weekend in a theater I’d never heard of – the Crest Cinema Center. While operated by a chain, the Crest feels like a neighborhood movie house from the 1970s (and I’m pretty sure it hasn’t been painted inside since then). Rather than turn me off, the dilapidation made me feel fond of the theater like I’d found a long lost friend.

But the most amazing thing, other than the fact that the movie was still playing weeks after it had officially closed was the price – $3 a ticket. Granted it was Saturday night, but the place was hopping. There was a very decent crowd attending a movie that had been out for almost three months. And then it hit me. The Crest Cinema had found its niche.

Movies move out of the theaters so quickly, and people are so busy these days, that there’s bound to be folks who want to see movies but miss the chance before they exit the chains. Not only does Crest offer these people a venue, but it gets to choose which movies to show based on thier performance in other theaters. All the other films playing had some modest acclaim or popularity. The $3 admission price doesn’t hurt either. It makes the popcorn and soda prices much more tolerable. Which (as they say) is where they make their money anyway. And finally, I wonder if they get a bigger take when they keep the movie in the theater past its normal window.

So let’s review:

• they show movies that have a demonstrated audience
• they show them in a window when there is no competition (from other theaters or DVDs)
• they lower the price on the part of the sale where they don’t make big money
• they keep their prices up on the items where they have the fattest magins
• they skimp on the fancy (the theater definitely has a “vintage” decor)
• their property costs are way less than most theaters because they’re located kind of out of the way in a standalone building, and not in a mall with high rent

I haven’t seen their books but it sure seems like Crest Cinema has found their spot. Small, unique, serving a well-defined need, and taking advantage of the opportunity to make money in a business that seems otherwise saturated and even stale. My sense is that the Crest Cinema happened upon this formula. I wonder what would happen if someone tried to scale this model of low cost aftermarket theaters in key spots across the country. Cool.