Experts first said going to the movies was a doomed pastime when television landed in the living room. They said it again with the arrival of the VCR. And DVDs and Blu-rays. Today, they’re saying it again, thanks to downloading and streaming. But Cineplex CEO Ellis Jacob is still bullish on the future of the movie theatre.
“It’s all about continuing to stay relevant and raising the bar for our guests,” says Jacob, who first joined Cineplex in 1987. “We’ve evolved our business, and today you’re not seeing a movie in a big auditorium with a small screen, terrible sound and having to bob your head around to see past the person in front of you.”
Jacob has every reason to be optimistic. With about 136 theatres, 1,454 screens and more than 71 million tickets sold, Cineplex saw a 9.4% boost in revenues to $1.1 billion in 2012. The company has not only been able to attract moviegoers with stadium seating, VIP experiences and the latest sound and visual technology, but also extended its business through its Scene loyalty program and alternative programming like opera and sports.
“We don’t want to end up like the newspaper business,” says Jacob. “We want to continue to thrive despite the challenges ahead.”
One way Jacobs is planning to stay ahead is using his own company as a proving ground for non-movie services. Cineplex already boasts a thriving indoor digital signage business, which it started about five years ago and expanded this year with the recent acquisition of a London, Ont., firm called EK3. The company now supplies indoor digital menu boards and signs for companies like Tim Hortons, Walmart, Target and Royal Bank.
“It’s a business not directly dependent on movies, but it allows us to use our infrastructure to innovate,” says Jacob. “Even though we’re a large company with more than $1 billion in sales, we still see ourselves as entrepreneurial.”
Looking ahead, Jacob’s game plan includes taking the company’s in-house food and concession brands like Poptopia and Outtakes beyond the theatre and into shopping centres and food courts. “Next year we’ll have close to 80 million people come through our doors, which is a fantastic opportunity to build those brands,” he says.
Another initiative on Jacob’s watch is something called “Transformation Cineplex.” Two years ago the company asked each of its 10,000-plus employees for ideas to innovate and expand the business. “We ended up with almost 500 ideas, which were whittled down to about 50, and now they’re down to about a dozen that we will focus on,” Jacob says. “I hate bureaucracy. Collaboration is much more important to me than competition when it comes to different silos in the business. What’s important is involving the entire organization in the process.”