From Madrid to Montreal (via Noumea), French circuit MK2 is in the midst of an international expansion that is bringing its brand of specialty cinemas to new markets and audiences. MK2 has established itself as European exhibition’s leader of independent cinema with 21 locations, 196 screens, and more than 10 million admissions on the continent, all while living up to the promise of the same slogan it has held since 1972: une autre idée du cinéma, or “another kind of cinema.” Boxoffice’s sister magazine in France, Coté Cinema, recently caught up with MK2 chairman Nathanaël Karmitz to discuss the circuit’s widening reach.
MK2 has been operating in Spain since its 2014 acquisition of CineSur, a move you yourself described as risky considering the state of the Spanish market back then. What is your assessment of the last couple of years operating in Spain?
When we bought them three years ago, it was a circuit that was largely bankrupt, composed of cinemas in shopping centers and provinces whose programming was mainly made up of American films dubbed in Spanish. In a sense, it was the antitheses of MK2 cinemas. Since then, we’ve applied our concept to those locations and today we’re currently achieving four million admissions against the three million we were tallying in 2014.
On July 10 of this year, we announced the purchase of Palacio de Hielo, the biggest cinema in terms of admissions in Madrid with 940,000 tickets sold annually. This has allowed us to acquire a truly national dimension in Spain. Indeed, the Nervión in Seville and the Palacio de Hielo in Madrid are both among the top five cinemas nationally in admissions. This means that today, with nearly five million admissions, we host a bigger audience in Spain than in France.
The Spanish market has been able to rebound over the last couple of years, simultaneous to your own growth in the market. What are the keys to that success?
We arrived in a market whose development had been driven by the interests of real estate groups rather than those of exhibition. Those auditoriums were just screening rooms for the major studios.
As soon as we got here, we got to work as both a circuit and a local player. Among other things, we launched our loyalty programs, established a local communication strategy, marketing campaigns, extended our hours of operation (staying open during the traditional siesta hours), started programming original-language versions of films, and opened our auditoriums to films from independent distributors.
We revalued the sneak-preview concept by charging an admission for the programs, which we complemented with discussions and activities. We carry more admissions today by charging for these programs than we did when these tickets were given out for free at supermarket checkout aisles.
We also launched our official MK2 publication, in partnership with Sofilms, an in-theater magazine with a circulation of 50,000 copies available free of charge in all our cinemas.
Notably, we registered 35,000 admissions during the Seville Festival, with European films, something we plan to expand with our new Madrid cinema.
As an anecdote, in Badajoz, we screened the short film of a local young director and we packed the house. We programmed more and more of these sessions, and as a result, he has been touring for six months with his short films across all our other locations in Spain. We like to take care of cinema In fact, we take care of cinema, local authors, and local cinema.
MK2 entered the Canadian market, in Quebec, earlier this year. It’s a current trend in exhibition—the industry continues to consolidate through the expansion of multinational circuits. How does your own overseas expansion correspond to your overall strategy?
Our international expansion is a necessity for us on a cultural level. MK2 Paris has the capacity to make an impact on the cinema market though its diversity in programming, offering producers and distributors an outlet to promote a different kind of cinema. This is precisely why we want to globalize and continue opening new doors.
In addition to these projects, we are developing a franchising strategy outside of Europe. The next cinema will be in Noumea, New Caledonia, and will be the city’s second multiplex, set to open in 2019.
In Quebec, we started a distribution operation in February with MK2 / Mile End and discussions are still under way to establish a new location.
How is the French part of the business progressing?
We aim to continue our development in Paris. We recently bought a small site with three auditoriums in Bastille, which we equipped with laser projection.
We also have a boutique hotel/cinema project in the Nation neighborhood with six auditoriums, 38 guest rooms, and a rooftop with an outdoor projection space. It will see the light of day in 2019. We don’t have a specific strategy in France, since the market is already very well established, but we are focused on strengthening and going to big cities to develop our idea of a different kind of cinema, yes. We are very interested in growing abroad as well.
You announced a partnership with China’s SoReal for VR content in May; how has that experience played out?
We already have our first VR center in our MK2 Bibliotheque location, with 150 square meters dedicated to VR, that we opened on December 15 of last year. I would like to point out that for us, Virtual Reality is not cinema! It is a complementary concept, an additional revenue generator that can cross over to different guests. It has been an extremely satisfying experience and we’ve already welcomed 20,000 guests to this space.
Coinciding with the start of the French school year, we are making several announcements around VR. First, we’ll be opening a new MK2 venue with a VR space that will not necessarily be in Paris. Secondly, we will launch a B2B solution, the MK2 VR Pod, which will be a “plug and play” solution for anyone worldwide. Any room will be able to offer a VR space to its customers with this simple system.
For us, thinking of cinema outside of our four walls continues to be a vector for further growth. We will continue to experiment—it is a way for us to communicate about cinema in general. We like to test out these innovations before rolling them out across our circuit.
What’s your take on the future of cinema? Do you have an optimistic view or do you feel threatened by the shortening of release windows?
I look forward to the future with great optimism and see ample opportunities to renew ourselves. Evolutions are necessary and this debate is unavoidable. For us, movie theaters must react by reaching out to their clients rather than being defensive and corporatist. Our audience should be at the center of these debates.