Per usual, Hollywood studios dominated the spotlight this week at the exhibition industry’s annual CinemaCon confab. But AMC Entertainment CEO Gerry Lopez was the star of many private conversations about the future of the theater business. It isn’t just because the former Starbucks exec runs the second largest chain, with about 5,000 screens in 33 states, the District of Columbia, Canada, Hong Kong and the UK. Execs are closely monitoring Lopez’ two-year-old initiative to reduce the number of seats in many AMC theaters to make room for luxurious recliners — which come with a higher ticket price. It’s an adventurous departure in a business that typically tries to pack as many people as possible into venues.
Lopez also seems to enjoy speaking his mind, a rarity in exhibition where leaders tend to be private and circumspect. He has a good story to tell: AMC’s owner, China’s Wanda Group, offered a 22% stake to the public in December, and the shares since then have appreciated 26.4% — well ahead of other major theater chains and the overall market. I caught up to him at this week’s CinemaCon. Here are his thoughts, edited for length and clarity, on a few of the industry’s front burner issues.
DEADLINE: NATO chief John Fithian said this week that exhibition companies are thinking about instituting a weekly discount ticket night. Do you like that idea?
LOPEZ: In an industry that has the capacity underutilization that we have, why wouldn’t we? It’s just common sense. Apparently they’re successful (in Canada). Our standard approach is not to cookie cut things. Every market is different, every theater is different. The devil’s in the details.
DEADLINE: What would lead you to oppose it?
LOPEZ: If the studios were against it. If implementing it erased some of the competitive advantages we’ve built over time. I don’t believe in lowest common denominators. Our focus has been on delivering value. We’re rarely going to be the cheapest theater in a market. We strive to be the best.
DEADLINE: What are some other details you have to weigh?
LOPEZ: Is it a percent discount? A percent off the top? Subway’s been successful with its “five dollar foot long.” [Burger King has] a dollar menu. It’s a simple message. You understand what you’re getting. Is it going to be something like that? I don’t know where John’s head is at. But it’s clearly an idea that merits exploration.
DEADLINE: He also said that theaters are still debating whether to allow texting at certain times.
LOPEZ: That’s vexing matter. During the show itself we’d just as soon you watch the screen you paid $10 to watch. That said, there’s no doubt that the [mobile] devices are extremely engaging. I’m starting to believe that part of the solution regarding the devices is that they have a role to play in engaging the customer and keeping our product in front of them during the pre-show. They certainly have a role to play in ticket sales. Inside the movie auditorium, though, during the feature presenation there’s no place for them. Every single weekend two out of the top three reasons people contact us are: somebody’s being disruptive, with a device most of the time, or a dirty bathroom.
DEADLINE: How about special showings that allow texting?
LOPEZ: That’s a possibility. We’ve experimented in a way when we’ve done sing-alongs. We did Frozen the other day.
DEADLINE: Would you consider creating rows or sections for texting?
LOPEZ: We would not do that. We don’t believe in splitting the experience. We don’t believe in taking a row out and putting in motion seats [that shake and move in response to cues from a film]. If you walk into that auditorium you’re going to have a communal experience.
DEADLINE: Have you seen any interesting new technologies for theaters?
LOPEZ: The most exciting technology is laser [light projection]. It’s not yet here, but it’s coming. The level of brightness a laser can achieve [is impressive]. Its second cousin is what’s happening with sound. Those capture my imagination.
DEADLINE: Can any technologies increase ticket sales?
LOPEZ: The path between intention to watch a movie and the purchase of a ticket – I want to make it as short as possible. The holy grail is Amazon One Click. One tap and I own it. The number of people on Thursday who have an intention to make it to a movie over the weekend always exceeds the number of people who come to the theater. If we can use technology to shorten the path between intention and action, that excites me.
DEADLINE: AMC sells tickets via both Fandango and MovieTickets.com. Some just go with one.
LOPEZ: There’s a reason for that. We don’t believe in limiting access to our product. We believe that making our ticket sales available on as many sites as possible is good for the studios and good for us. We have on any given day 25,000 show starts – five show times at 5,000 screens. We have 1M seats more or less in our circuit. So I have 25M sales opportunities every single day. Why would I want to limit access?
DEADLINE: Where else can you sell?
LOPEZ: Why shouldn’t people be able to buy movie tickets on Amazon? Or Google or Flixster, or IMDb? I don’t care who you have a relashionship with. This isn’t about Fandango or MovieTickets. This is about you. Where do you buy stuff? Are you an Amazon Prime member? Then I want to be on Amazon Prime. Are you a Yahoo guy? Then I want to sell on Yahoo. Are you a Google guy? Then I want to sell tickets on Google.
DEADLINE: OK, so why aren’t tickets available on Amazon?
LOPEZ: You have to strike the deals, and they have an interest in them. With a revenue share model where you’re already splitting with the studios, you have to do something with Fandango and so on. But to us the question and solutions begin with the guest, not the supply chain. Our focus is on the forward end of things: the customer and what does he want to do? If you’re buying underwear and household items ladders and everything else – I buy all sorts of stuff on Amazon Prime – why shouldn’t I buy this? Any legal document, contract or otherwise, that prevents me from doing that, I don’t want to be a part of. If I can make an economic deal with Amazon that works for them and works for me, OK – I’ll make it available. But I don’t want to be part of restrictions that make life difficult for my guests.
DEADLINE: Your initiative to install recliner seats coincides with Wanda’s purchase of AMC, and the decision to go public. Is there a connection?
LOPEZ: It’s not a coincidence.Why did we get into the business of these [reclining] seats? Because the guest experience that we were providing had failed to keep up with the visual experience of the movie. [After joining AMC in 2009] I was asked by the owners at that time to bring a different focus to the enterprise. That was all about the guest. We will sacrifice two-thirds of our seating capacity to improve the seating experience. In an industry that had historically been about numbers – number of seats, number of screens — we said “Stop. We’re going to focus on the quality, not the quantity.” The transaction with Wanda allowed us to move quicker on ideas that were percolating. It gave us a long term view and financial stability to say, instead of doing a couple of these a year we can do a couple of dozen a year. Going public was a culmination of that. We’re now in the left lane and accelerating.
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