EXCLUSIVE: Last December, Moshe “Mooky” Greidinger’s Cineworld took over U.S. chain Regal Cinemas for $3.6 billion creating the second-largest exhibitor in the world after AMC Theatres, spanning 10 countries with 9,542 screens across the U.S. and Europe.
For decades, Greidinger, 64, has been revered by the major studios, not just because of his family’s legacy in exhibition, but for his global philosophy about the theatrical business coupled with his hands-on approach to running his company.
Greidinger’s family essentially brought cinema to Israel in 1929. The Haifa Israel native joined the family business in 1976 and by 1982 opened the first multiplex in the country and became the market leader. In 1997, the company founded Cinema City International, which within a few years became one of the largest circuits in Europe, operating in Poland, Czech Republic, Hungary, Romania, Slovakia, Bulgaria and Israel. In March 2015, Greidinger sold Cinema City to UK’s Cineworld for $923M in cash and stock, and received a controlling 25% stake in the new merger and the position of CEO and Chairman.
Movie Theater Stocks Rally On Vaccine News, Cineworld Liquidity Lifeline
Deadline caught up with Greidinger to talk about his upcoming plans for Regal, his thoughts on industry rabble-rouser MoviePass, Netflix, PVOD, Saudia Arabia and how “the gross in international has compensated the industry in a big way. I know there was a decline in DVD and other auxiliary markets maybe have not grown as quickly as expected, but this will fall into place,” exclaims Greidinger.
Are you planning on closing some of the Regal cinemas that are not up to date in the U.S.? Or doing big overhauls and transforming them into luxury venues?
We are great believers in delivering the top level of experience to our customers. Our strategy is to be the best place to watch a movie. On one hand we want to be better than all offers that people have outside the cinema which could be anywhere from TV screens to iPads to iPhones to computers or wherever else you can see a movie, while also being better than the competition on the theatrical business. So our strategy is based on really emphasizing everything on the planning of the cinema, emphasizing on high-end technology of the cinema, emphasizing on the high-level of service of our team — because we believe that a good, warm service to the public is essential. That’s our strategy.
Does that mean that there is going to be quite a significant investment in upgrading?
I believe that there is a need for investment on a constant basis in the cinemas — keeping them fresh, keeping them new, keeping them on the high end of technology.
We are for sure going to renovate these amazing sites that Regal has in the U.S. I think if we look at the two opportunities in the world today in the theatrical business, one is the emerging markets which can be seen in the experience we had in Central Europe. We were very successful in opening state of the art cinemas where there was no infrastructure in Hungary, Poland, Romania and more.
On the other side, there are the mature markets. The experience we had when we arrived in the UK four years ago, or the experience in Israel or the one we are now facing in the U.S.
The mature markets have not less of an opportunity because these amazing circuits like Regal, Cineworld, and more, have amazing locations with great potential, but a lot of these cinemas need some renewal, some refurbishment, some freshness, in order to become more attractive to the customer.
Our experience in the mature markets where we’ve done it already in the UK and Israel is very successful and the public really embraced these cinemas.
We can see in the cinemas that Regal started to refurbish there is a vote of confidence from our customers. We are going to really give a push to the upgrading of the cinemas. We are going to several routes which will be a mix of new locations that we have to open, cinemas that we will completely refurbish, and cinemas that we’re going to do some face-lifting. With that some, very few, will be closed, It will be an insignificant number. We don’t usually give up locations, we usually improve the cinemas and give them a new era.
Will part of upgrading existing cinemas mean losing screens?
I think in general most of the cinemas in the U.S. are built in a big way. There will be a need to improve stadium seating here and there, a need to improve the ‘leg room’ in the halls — not necessarily going to recliners but the width of the rows needs to be more spacious, this might cost us seats but I don’t think it will really cost a significant number of screens.
I believe that when we are talking a full refurbishment, that we touch everything in the cinema which will include stadium seating, better screen vision, larger screens where possible and side by side we are great believers in high-end technology. We are leading with IMAX 4DX, some luxury VIP screens and all other options that today are developing in the theatrical world.
What about a focus on any specific cities or areas?
Regal is represented in almost every state, we even have cinemas in Hawaii and one in Guam. We are really widely spread. Wherever in the U.S. we can find a good location or a good new location, we will not hesitate to take it. We know it is a very competitive market — some places might even be over screened but I think as long as we give quality and especially in view of the fact that customers in the U.S. really love the cinema — still they go in the biggest ratio of ‘visit per capita’ in the world, or almost the biggest ratio, I believe the potential is there and we will try not to miss opportunities.
Will you rebrand?
In general it’s going to be Regal. (Cineworld) has different brands in different countries. The U.S. will be concentrated more on Regal. That doesn’t mean overnight we are going to change every United Artists or Edwards into a Regal, but we believe that the general brand is Regal and every refurbished cinema, new builds will start changing more and more to Regal. I think it’s a very respectable brand in the U.S., and we will benefit if we concentrate on one brand.
What about MoviePass, have they approached you?
No, they haven’t approached us. I don’t know if there was an attempt to talk to the Regal management before.
I must say in all honesty that I cannot understand the business model of MoviePass, but as long as we are getting the full price for the tickets. We are following it and we are looking at what’s happening with this. But it’s really a big question mark how you can run a program for this amount — it used to be $10, now it’s $7. It’s a big question mark, but time will tell.
Does Cineworld have a subscription model? What do you think of them in general?
Cineworld has I think one of the most successful subscription programs which is called Unlimited in the UK. It’s a very successful program which is done in a very professional way, we are operating it already for 10 years and we have a lot of followers.
I think when one talks about subscription programs, the first rule is that it should be directed to cinema lovers, to people who really want to go a lot to the cinema and you cannot do it for $10.
The subscription program should give the heavy users the answer. For people that are going to the movies only once a month or sometimes even if it’s 1.5 times a month, the program is not a good option.. The cinema ticket is very affordable still when you compare it to any other entertainment segment But if you want to go four times a month to the movies or every week to the movies and you are a student, the program of Cineworld is a great program and it is really combining between us and our, let’s say, heavy users.
What is the pricing like? The margins?
It’s not an issue of the margin, it changes because we need of course to settle with the distributor. It depends, there will be customers who one month will come to us once and another month will come six times. I think it keeps people in line with the cinema. It keeps the loyalty to the cinema and although the margin is smaller than on a regular visit, it is still good and increasing the total number of admissions.
When you say you don’t understand MoviePass model, in terms of how? Making money?
In the long run to buy goods for $100 and to sell them for $50, I don’t think it’s a business that can last. But maybe there is something there that we do not understand.
Are studios still pushing for the premium VOD window?
I can only say from our knowledge that I don’t think that currently anybody is pushing to shorten the window. I think that there was a lot of noise in the media a year ago — it started near CinemaCon — it was much more than what really was happening. But I think if you look today at the importance of the theatrical business, if you look today at the amazing potential that this business has internationally, the world today is small. You can’t really treat the world as domestic and internationally separately, I believe.
The gross in international has compensated the industry in a big way. I know there was a decline in DVD and other auxiliary markets maybe have not grown as quickly as expected, but this will fall into place. On the other hand when you look at the business today and it’s not only China, China of course is outstanding — but if you look at the business today of China compared to 10 years ago, if you look at Russia today compared to 20 years ago, if you look at territories like Poland, like Romania, the gross internationally is amazing and I believe that in the mature markets, there is also a great growth potential.
But the theatrical business has always been the leading window for this whole industry. I think the big filmmakers are truly supporting the theatrical window because everyone wants their movie to be premiered and shown exclusively for a while on the big screen.
I would say, that one should not forget there are about 20-25 big exhibitors in the world and not to forget the thousands of others, and there are six big studios. I think as a majority you will not find any real pressure to shorten the window today.
I think even in a business model I can argue this will not be profitable.
What do you think about the Netflix/Cannes issue?
I believe that films that are running in these premiere spots are made for clear theatrical releases and not for opening the same day in the cinema and other (methods).
Netflix is an amazing company. I admire the company and I think really they are doing an amazing thing. I think they are mistaken from the way they are looking at the theatrical business and I believe their movies have a place in the cinemas and nothing would hurt them if these movies would be shown under the window.
I don’t really see the big change for them in releasing a big movie according to the window against the day and date, from the point of view of their customers. Seeing it three or four months after its release will sometimes be to the contrary because once the movie is released, I see the theatrical business as a platform and I really believe that Netflix being a huge player should become a big player in the real theatrical world and not the in the theatrical world that is based on day-and-date.
Will you keep Regal’s HQ in Knoxville?
As I said to the Regal team on the day we signed the deal, Knoxville is staying in Knoxville. I am now coming almost every two weeks to Knoxville. We have a new office building there which is very nice; it was initiated by the previous management and I enjoy my time in Knoxville.
Overall, can you pinpoint the biggest challenges and opportunities in acquiring Regal?
The biggest challenge in acquiring Regal is first of all getting adjusted to the size. We need to remember we bought one company which from the point of view of number of screens was three times bigger than us and this is a huge market where we need to concentrate on the day-to-day running.
I like to say today in the Cineworld group we have in the region of 10,000 screens. Ten thousand screens means that every day we have to run 50,000 cinema shows which means something like 14M cinema shows a year. All these shows have to start on time. All these shows have to show the right movie. All these shows need to have a clean hall before the movie starts and the sound needs to be at the right level, the picture needs to be good, the seats should to be comfortable etc, etc, etc. This is a huge challenge in an operational way. I’m talking before any other plans on the day-to-day life of the business
So this is a challenge and I think that we have great teams in each of the territories where we operate, and I think that we are setting up this challenge in a good way.
The second challenge, and opportunity, is really to improve the experience of cinema wherever we operate. So in the youngest territories, the cinemas are younger and it’s much more simple. In the more mature territories we go into this heavy refurb and new builds etc. This is a challenge of how do we coordinate to do things on time and monitor all our activities. We need to remember we are a big public company. We have an obligation to our shareholders, we have an obligation to the banks that gave us the money to do this deal. All together it gives a big challenge but it also gives us a great opportunity to improve the business and really come up with a result with a good success story.
And what about internationally?
It’s divided between mature markets where we are continuing to improve and refurbish. We currently have six cinemas in the UK which are under renovation. In our emerging markets, we continue to build new infrastructures. People love to go to the movies in these territories, the potential of the gross there is still amazing.
If you take just the statistics and look at a country like Romania, in 2007 when we entered we were selling 2M tickets annually and sold last year something like 15M. This is a gross that you don’t find another way. There are 20M inhabitants, so if we put to Romania just the Western Europe ratio of cinema visits per capita of let’s say 2.5 we are already talking a point of 50M tickets.
I greatly believe in the growth in international markets side by side in dealing with mature markets that really need fresh blood.
You mention Romania which has seen the emergence of great local filmmakers in the past 20 years. How important is local language cinema to exhibitors overseas?
I strongly believe that local production in the territories is essential for the growth. People love to see their own movies as well as they love to see the foreign movies but there are years in Poland we would reach 20-25% tickets sold for Polish movies. Israeli movies are more and more important in the industry. Some of these movies will travel over the border and some are very local that will be very successful. The world is becoming smaller and the cultures are traveling. We have a huge Bollywood following in the UK, a huge Spanish language movie following in the U.S. I think it’s great. It’s an opportunity for us to give our customers more offers and more opportunities to see about other cultures. I believe local production is very, very important for the success of the theatrical industry.
Do you have plans to get into Saudi Arabia?
As you are aware, we recently made quite a big step, if not to say giant step, where we closed the Regal deal. Currently we don’t have any new territories on the table, but things might change in the future. It’s not the first thing on our list, but we are analyzing all opportunities. We are great believers in the theatrical business and for sure with international expansion. We’re really concentrating mainly on the U.S. and we have another nine territories on board.
How do you see Saudi Arabia?
I think that every market that has a lack of infrastructure has a great potential.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.