It is a basic business reality that movie theaters have had a tough year, in part because of lousy films released by the studios. But a larger reality is that the huge number of entertainment alternatives creates new and tough competition for the local multiplex, and it may be that offering comfier seats, better food and alcohol may not be enough to re-energize the industry.

Hence, the $20 million investment by the AMC Entertainment theater chain into a company called Dreamscape Immersive, which has been developing a virtual reality multiplex concept that will offer a variety of experiences. The technology, according to the Times, “allows up to six people to explore a virtual-reality environment at once, seeing fully rendered avatars of one another.”

According to the story, “Dreamscape joins a cluster of companies that are trying to take advantage of the still-untapped consumer promise of virtual-reality technology, the desperate need by shopping malls to reinvent themselves in the online retail age and the pressure on movie studios (and theater companies) to find new avenues of growth.”

Among the other investors are Steven Spielberg, 21st Century Fox, Metro-Goldwyn-Mayer and Warner Bros.

The Times writes: “The AMC deal, which brings total investment in Dreamscape to more than $40 million, calls for up to six Dreamscape locations to open over the next 18 months. Some will be inside existing AMC theaters, and some will be stand-alone centers nearby. Additionally, Dreamscape will open a flagship location in the first quarter of next year at the Westfield Century City mall in Los Angeles.”

KC's View: This is, I think, such a great lesson for every business … it is critical sometimes to be willing to embrace even business models that seem antithetical to or competitive with what we traditionally have done, especially if we can use them to gain a competitive advantage. In this case, movie theater companies are deciding that they are in the entertainment business, not the business of showing movies. You do what you have to do to survive.