HAVANA – The streets of central Havana were dark and almost silent as a young married couple climbed a chipped marble staircase to the top of an aging building.
Dubied Arce and Dayelin Perez opened a narrow door to a flood of cold air, colored light and the twang of a country-and-western video blasting from a wall-mounted TV. To their right: a private movie theater with a 200-inch screen, glossy leather armchairs and a high-definition 3D projector. In another room: a half dozen Xbox video-game consoles wired to flat-screen displays that were hand-carried by Cubans returning from trips abroad.
Cuban entrepreneurs have quietly opened dozens of backroom video salons over the last year, seizing on ambiguities in licensing laws to transform cafes and children's entertainment parlors into a new breed of private business unforeseen by recent official openings in the communist economy.
"It's a cool atmosphere," Perez, 27, said Sunday night as she munched free popcorn and waited with her husband and four other patrons for the late-night showing of the 2010 terror film "Saw 3D." ''We have some more options these days, at least."
It's increasingly clear that 3D movie and video-game salons have grown too popular for the government to ignore. Officials said Sunday that they were working on new regulations for the businesses, sparking fears the government might be on the verge of stamping out this flowering of private enterprise.
"We don't have any concrete information yet about whether they're going to allow it or not. But they haven't come out and said it's prohibited either," said the manager of the central Havana video salon, speaking on condition of anonymity because of the murky legal status of the businesses. "We just don't know."
President Raul Castro has legalized small-scale private business in nearly 200 fields since 2010 in an effort to rejuvenate Cuba's economy. The limited opening has created jobs for some 436,000 people, but is often accompanied by tighter regulations or higher taxes as private enterprise starts to compete with the government.
Video parlors aren't mentioned among the approved businesses but aren't explicitly prohibited either. Their owners usually operate under licenses for restaurants or snack bars, then add entertainment options that grow larger than the original business.
The Communist Party youth organ Juventud Rebelde published a 3,260-word article Sunday on video salons that prominently featured officials pointedly discussing the need to do something.
"What are we to do: prohibit or regulate? I believe in regulating, from a fundamental starting point: everybody complying with cultural policy," Vice Minister of Culture Fernando Rojas told the newspaper.
The paper said Rojas believes the video salons are promoting "a lot of frivolity, mediocrity, pseudo culture and banality, which flies in the face of a policy demanding that quality comes first in Cubans' cultural consumption."
"Notwithstanding, our interest isn't in limiting these offerings, rather that they promote, I repeat, cultural products of the highest quality," he said.
Most video parlors feature recent Hollywood blockbusters like "Star Trek," ''Ice Age" and "World War Z," with children's fare in the daytime and horror late at night. Cuba's state-run cinemas generally show higher-brow films in poorly maintained theaters. The current government fare in Havana includes "Sarah's Key," a 2010 French drama about the Holocaust.
The private video parlors' combination of success and legal ambiguity makes them a particular conundrum for Cuba's government, which is trying to improve conditions for ordinary Cubans but protect state enterprises at the same time.
The theaters are employing a growing number of people, and offering entertainment for many others, but they're also competing successfully with state-run theaters.
"There are those in the government who presumably want to see more private investment, consumers better served, and then there are those who represent traditional interests and industries," said Richard Feinberg, a senior fellow at the Brookings Institution who studies private enterprise in Cuba.
"It's a fascinating competition, and that competition will determine the future of Cuba."
Some parlors have nothing more than a TV, a DVD player, a handful of 3D glasses and a dozen or so chairs in a family garage or living room. Others, like the cinema and game parlor where Arce and Perez had their night out, are professionally designed.
Aixa Suarez, a former purchasing agent for a state-run business, said the 55-inch LG 3D TV set and Xbox game console bought by her brother in Florida allow her to support her mother, father and 9- and 16-year-old son and daughter.
She charges teens in her central Havana neighborhood $1 or $2, depending on the hour, to play video games or watch a movie in her home. That income has fully replaced her $45 monthly state salary and added a significant percentage, but her feeling of independence is even more important, she said.
"I don't have a boss. I am the boss," said Suarez. "I don't have set hours. That's the biggest advantage. And that's enough for me."
In the higher-end salon, the equipment alone cost $100,000, all hand-carried on flights from Canada, where the Cuban-born owner lives, the manager said, declining to provide details because of the possibility of a government crackdown. Movie tickets cost $4, which includes a drink and popcorn. The eight employees share a percentage of the earnings, and it should take three years to recoup the initial investment.
Employee Junior Armenteros, 26, said he quit university a year before getting an information technology degree. He struggled to find interesting work until he was hired by the central Havana salon, where he and his fellow employees discuss their shared interests in computers, video games and mobile phones.
"There are other 3D cinema rooms but not with the high quality of these ones," he said proudly. "This business is a pioneer."
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