As the cinema industry emerges from the Covid-19 pandemic, Boxoffice Pro and Spotlight Cinema Networks are partnering to profile movie theaters and influential industry figures from across the country and ask them to share their first-person accounts of bringing the movies back to the big screen.
Interview with Luis Olloqui, CEO, and Annelise Holyoak, National Director of Marketing and Loyalty
It’s been an extremely difficult two years, with a lot of lessons learned. Can you guys go over what some of those lessons have been and how Cinépolis USA has recovered so far?
Luis Olloqui: It has been a long journey, I agree. And it has been a learning journey. What we have seen these two years is mainly that we can be more efficient in running our theaters—we have learned to run them with a skeleton crew—but it was also key to keep the service [at the same level] the client is used to. When they came back from the closures, we had to give them the same [level of] service that we had before we closed, because that was what they were expecting.
That’s one of the main lessons that we have learned: how we can manage our payroll or expenses, the opening hours or closing hours, in a way where we can maximize the revenues by servicing our clients and, at the same time, not overspending. Before, we were used to opening very early, even on weekdays. Now, it’s unnecessary. Maybe later on, when the summer comes, that will be the case again. But right now that’s the main lesson: being efficient, targeting our clients.
Annelise Holyoak: Another big lesson, too, is that we really have to make the experience the best that it can be, so that it entices people to get off the couch and come to the cinema. At Cinépolis, we do a really great job of that by offering those amenities that you just can’t get at home. Over the pandemic, even though resources were scarce, it gave us time to work on our menu and work on the food that we were serving. Our F&B team was very hard at work, making sure that when we reopened and came back, we were doing things a little differently, like making more sauces and making more things in-house, really trying to make that food quality restaurant-quality. Because that is what we believe is going to be the future of cinema.
Throughout the ’90s, Cinépolis went through a series of modernizations to bring their circuit in line with what U.S. theaters had to offer. By the 2010s, when Cinépolis finally entered the U.S., they brought in a lot of innovations, like recliner seating, dine-in, VIP luxury cinemas. That’s been a big part of the circuit’s DNA here in the U.S. Could you speak to what it takes to compete in this very niche exhibition market?
Olloqui: You hit the nail on the head. That was the strategy. When we decided to come to the U.S., we specifically decided not to compete with the big three. We didn’t want to. They were already in most of the major cities. They had big multiplexes: 20s, 24s. And so we were very specific in wanting to do something different. And we saw the opportunity, as there were no dine-in or major luxury concepts here in the U.S., to bring the experience that we had in other countries after we founded the first luxury dine-in in Mexico in 1994.
Bringing the recliners. More upscale food that’s different from the traditional hot dog and nachos that you have at the theater—but also having those [traditional foods] as part of what people like about the theater. Popcorn is a classic. You have to have popcorn when you go to a theater. But you can also have a great burger, a pizza, cocktail, craft beer, some wine, dessert that isn’t just ice cream. We saw that that niche was open. And we have tried to stay true to that strategy. In general, as we see the future with windows shortening, we think that having a very appealing food component and beverage offerings will make it more attractive for any client to get off the couch and come to the theater. That’s what we are trying to achieve. And we’ll continue to push in that regard.
Holyoak: One of the things we did differently, too, was market ourselves as a brand. Most people, if you ask them where they went to a cinema growing up, they know where it was, but they don’t know the name of it. Outside of loyalty programs, cinemas just really didn’t spend money on marketing their own brand. Some of the bigger chains have caught up in recent years. But when we first embarked on the U.S. journey, we were marketing ourselves as a brand, and that was very different from other chains. Alamo [Drafthouse] was really the only other circuit that was branding themselves as something unique.
Annelise, how has Cinépolis USA’s loyalty program—and the aspect of your work in engaging with audiences directly—evolved over the 10 years you’ve been with the company?
Holyoak: It’s no secret that movie theaters spend significantly less on marketing than restaurant chains or other brands. Loyalty, I think, is something that we’ve always relied on. It’s interesting because, in the marketing space, movie theaters have never been on the forefront of anyone’s mind in terms of innovation as it relates to marketing. However, they have really been on the forefront of innovation when it comes to loyalty programs. Most movie theater loyalty programs have been around a really long time. They started out primarily as a weekly newsletter: This is what’s playing, these are the times, and this is what we’re doing.
Because we started later, we were able to launch our program in a completely different way. Rather than just emailing everyone a list of what’s playing every week, we’ve taken the approach of personalization and segmentation. And so all of our members really are receiving communication on a personalized level. We’re sending out promotions that are relevant to them, for films that are relevant to them. One of the things that we really stress in our marketing of our program is that we’ll never email you unless we’re sending you an offer, incentive, promotion, event access, or some kind of discount. And that’s made our program very successful.
It’s definitely been a challenge training the studios and some of our other partners. Every week they want to be included in our weekly email, and we have to explain, like, “Hey, we actually do it a little differently.” From a guest perspective, they see a lot more value there because they’re getting information that’s relevant to them, rather than overcommunicating. We all are part of programs where you’re like, “I just bought something, and you’re emailing me an hour later to buy more stuff?” We try to make sure that we’re only contacting you when it’s relevant and we know that you’re likely to make a purchase. Because quite frankly, for us, we are a smaller chain and we are on the higher end, so about 80 percent of our customers are in other movie theater loyalty programs as well. So we have to make it as relevant as possible for them.
Could you speak a little bit about some of the initiatives and innovations Cinépolis USA has introduced to U.S. theaters over the past few years?
Olloqui: We started with dine-in and reserved seating, and the recliners [came] later. And then we got an Imax, which was maybe not as inevitable for us. Like Annelise said, the rewards program and our food component. The other thing that we did, just previous to the closing [due to the pandemic], we opened the first ScreenX with a dine-in in November of 2019. Now it’s had a relaunch and is doing really well.
Holyoak: The food and beverage is really what we, personally, have been focused on. We have behind the scenes also tried and tested some app ordering [products] and ways to do more on the phone. That’s something that we’re really focused on for this next year, getting our website even more optimized and efficient. We want that booking process to be as easy as possible. We’ve always really invested in the lobby spaces, because we want it to feel like a third place for people to gather and feel comfortable. That’s something that not everyone has done. But back to the food and beverage component, we’ve really invested in the size of our kitchens. When I first started, our kitchens were probably not much bigger than the size of my kitchen in my house.
Except you have to serve an entire complex with it.
Holyoak: Exactly. We were a movie theater chain that wanted to sell food, and now we really consider ourselves in the restaurant space. We’ve got huge kitchens, we’ve got satellite bars, we’ve got all sorts of innovations on the kitchen side to make things more efficient. We’re constantly optimizing the menu, putting things on, taking things off. That has been a big part of the innovation, things that maybe guests don’t see but they’re happening on the back end.
Olloqui: Another thing that we have, and you will probably see in our new-build theaters, is the size of the screen. But also, specifically, how far the first row is from the screen. It’s something that we have seen with other chains, but in particular for us, the whole experience of watching the movie in the theater needs to be optimal. We needed to sacrifice some rows, because we don’t want you to have a problem with your neck when you’re so close to the screen. In all the buildings that we have built from scratch, the first row is very far away from the screen, in order for us to guarantee to the client that if you’re in the first row you’ll be able to experience a movie as it should be. Yeah, we’ll probably sacrifice some revenue. But in the long term, what we want is happy customers.
And once you bring in dine-in to the equation, the formula changes. It was always a little bit more difficult in terms of operations before the pandemic, but now we’re talking about the two industries that have faced some of the biggest challenges in retail: cinemas and restaurants. How has the dine-in cinema business changed since the pandemic became a reality?
We now have clients who want better service. Before, there was a little more patience. Now, because they’re going out less often, they’re requesting and requiring much more service.
The other thing—that maybe some of us hate, but we as operators love—is the QR code menus. They have been incredible. I know some people don’t like them, and for them we have printed menus. It makes our lives much easier and cheaper in several ways. One, obviously we can update the menu much faster, do changes without having to print all those [paper menus] and send them to the theater, replace them [in the auditoriums], and then [deal with] the mistakes of the employee who didn’t replace the correct orders. It helps us to have a LTO [limited time offer], to be informing the client about the new items, the promotions, or a new dessert that we’re having. If we’re having shortages, because that’s another problem that we have had, we can also delete those items that we don’t have available. And then also it saves on paper, and I think that’s another thing: We need to take care of our world, and [QR code menus] are very environmentally friendly.
As exhibitors continue to look for ways to stay ahead of shrinking and changing release windows, it’s not surprising that event cinema has been a big growth area in the last decade. It’s a way to program your screens, especially during off-peak periods, that doesn’t rely as much on the studios. Cinépolis has had a longstanding focus on event cinema programming. What part does it play in your strategy today?
Holyoak: Luis and I can both agree that it’s something we have been focusing on. We were one of the first to do the private watch parties when the pandemic hit. And that, I think, showed that people do want to see content in the theater, even when there is not new content coming out. We love alternative content—it’s a great way for people to experience great content that they might not normally get to see. And it helps us fill those buildings that need showtimes, because there are definitely weeks where we all know nothing’s coming out and it would be great to have alternative options.
Olloqui: In that sense, I think we have done a great job in most of the countries [in which Cinépolis operates]. Here in the U.S., we have not been able to push that envelope as much as we would like to, because we’re not that big. Copyrights … it’s very difficult, very expensive.
We were the first chain in the world that had a 3D live soccer game, for the World Cup. We did live opera. We have done live concerts. We had a live concert from the Red Hot Chili Peppers [playing] in Berlin that we showed them in Mexico. The opportunities are there.
For all the world’s smaller chains, we need some partners that can help us in getting the copyrights and spreading them around. It’s very difficult for us to go to the NFL and try to secure a deal for Sunday Night Football or Monday Night Football or Thursday Night Football, because we’re not that big. And that is the case with other types of content that is out there, that I’m sure people are craving. Hamilton is a good example. If you cannot afford to buy the tickets, the next best way to see Hamilton will be in a [movie] theater. Unfortunately, we didn’t have that opportunity. We would like to have it with our other shows.
There’s a lot of content being done across the world that we’re sure that, with globalization, will be more appealing to our clients. I think BTS is a good example, Korean music coming to the U.S. and people really craving it.
Holyoak: I think the big thing is consistency. You get a concert here, a concert there. You might get a game here or there. Guests are seeing a UFC fight, but then you might not see [another one] for a couple of weeks. We need that consistency of that content to make it work, so that the guests know that they have access to it on a regular basis, and it’s not just sporadic.
Olloqui: And it takes time to train the client. We saw that when we had the first 3D soccer game. When you go into a theater, your mindset goes to, “Silence your phone, keep quiet.” But you’re in a soccer game. You want people to be yelling and enjoying themselves. The same with a concert. Now that we’re having this concert, our managers are asking, “What can we do to make people feel more like they’re in a concert hall, where they can stand up and dance and sing? Will they be quiet or will they not be quiet?” You need to go feel that experience, enjoy it, and then you start seeing the benefits of going to a theater and experiencing different types of shows.
As a luxury dine-in circuit, how does Spotlight Cinema Networks fit Cinépolis USA’s needs for in-theater advertising?
Holyoak: Since our expansion to the United States, Spotlight has been an integral part of our business model. The quality content they provide is not only interesting to our guests, but the brands really align with our image. The revenue they’re able to generate is also unmatched.