CINEMACON GLOBAL ACHIEVEMENT AWARD IN EXHIBITION
CEO, Kinepolis Group
Interview By Phil Contrino
Eddy Duquenne took over as CEO of Belgian exhibitor Kinepolis following a successful spell as CEO of Sunparks. Once installed, Duquenne prioritized a new organizational structure in managing cinemas and promoted direct marketing techniques to better understand consumers.
BoxOffice recently spoke with Duquenne to learn about his strategy in making the most of an exhibition chain in a difficult European market.
What were some of the first things you discovered when you transitioned into the exhibition business?
Coming out of the tourism industry, I was amazed by how everyone was talking in terms of tickets and not in terms of customers. When I [became CEO], we immediately set up sales and marketing departments with a focus on introducing direct-marketing techniques. In Europe we have a population growing grayer, so you have less and less youngsters, and I would ask myself about the long-term evolution of cinema, which is clearly not a growth business when paired with the demographics of a population growing grayer.
What was the strategy behind reaching out to consumers directly?
Could we increase frequency knowing the preferences and the taste of each individual customer? For that reason we started introducing CRM techniques, customer-relationship management, and we started pushing online ticket selling and ticket selling through automatic ticket machines. That way you have a digital moment with your customer so you can start identifying who your customer is.
On average we sell 20 million tickets at Kinepolis; we have about 5.5 million unique customers and we have e-mail addresses for 2.4 million of them. [We track] based on their behavior-what they're buying, when they come to the movies, who they come to the movies with. For instance, a transaction with two adults and two children for Frozen on a Sunday afternoon or an individual ticket for Wolf of Wall Street on Friday night can be the same customer but in different circumstances, so we started looking at why [people] come to the movies-which genres they like, which directors, which cast? And based on that, we have been building algorithms that take those three elements into account and are now trying to push new content.
How did you go about restructuring the company's operations?
We have 23 theaters, of which we operate 22 ourselves, and we came to a new organizational structure where we created budget ownership, and now we have someone responsible for box office, someone responsible for in-theater sales, for experience-meaning the cleaning, infrastructure, projection, sound and security-and someone responsible for business to business. On top of that structure we have the theater manager.
We introduced a new management reporting tool where we only highlight those revenues and costs that each of them can have an impact on. We benchmark between the different budget owners throughout the cinemas and find there's always someone who is doing better. Based on their approach, we try to lower our break-even point from year to year and we incentivize them with a bonus system. We try to lower our break-even point by making profit plans based on 5 percent less tickets but resulting in the same bottom line.
What is the role of NATO and CinemaCon for your business?
The basis of our business is simple: we sell a ticket, a bucket of popcorn, and a Coke. But in general it's a difficult business, because there are a lot of elements and trends in the environment-macroeconomic trends, trends in taste, demographic evolutions, Hollywood focusing on the world market rather than on continents, weather impacts in the short term-and it's not always that obvious to know what exactly is happening and what we should anticipate.
And the comparables are difficult in our industry as well, because the product we have from season to season and year to year is always different. That's why it's good to share with others and to understand how they feel and how they see what's happening.
We see that a strong organization like NATO makes sure all the different aspects and trends in the business are covered very well, so it's a huge source of information. And with CinemaCon you can [connect] with a lot of colleagues from the industry and with more and more representatives coming from Asia, Russia, and South America, so you can speak with them. It's an opportunity to meet with the number one's of the majors as well, and it's Las Vegas, so that's always fun.
Sunday Update: Lionsgate's Divergent debuted comfortably in first place this weekend with an estimated $56.0 million. The highly anticipated young adult adaptation starring Shailene Woodley performed in line with its wide ranging expectations which fell anywhere from $50 million to $70 million heading into the weekend. Without adjusting for ticket price inflation, Divergent delivered the eighth largest debut ever for the month of March. The film generated the second largest opening weekend of 2014 thus far (behind only the $69.05 million start of The LEGO Movie). Divergent opened 20 percent below the $69.64 million start of 2008's Twilight and 107 percent above the $27.02 million debut of last year's Ender's Game. The film's very solid start this weekend is a good early sign for its two already announced sequels, Insurgent (set for March 20, 2015) and Allegiant (set for March 18, 2016).
While Divergent was helped by strong pre-sales driven by its build-in audience of fans, the film wasn't very front-loaded for a young adult adaptation. The film opened with $22.63 million on Friday (which included an estimated $4.9 million from late night showings on Thursday night), fell only 13 percent on Saturday to take in $19.75 million and is estimated to decline 31 percent on Sunday to take in $13.63 million. That places the film's estimated opening weekend to Friday ratio at 2.48 to 1. In comparison, 2012's The Hunger Games had a ratio of 2.27 to 1, while Twilight had a ratio of just 1.94 to 1.
The more back-loaded start of Divergent is a good early sign going forward and was due at least in part to the film's somewhat surprising four-quadrant appeal. The audience breakdown for the film skewed towards female moviegoers (59 percent) and was roughly evenly split between moviegoers over and under the age of 25. Divergent received a strong A rating on CinemaScore, which is also a good early sign going forward.
Divergent grossed $4.8 million from 348 IMAX locations this weekend. That represented 8.6 percent of the film's total grosses this weekend. Grosses from all large screen format locations (including IMAX) represented just over 16 percent of this weekend's total grosses.
Disney's Muppets Most Wanted debuted in a distant second place with an underwhelming estimated start of $16.51 million. The latest Muppets film opened below expectations and 43.5 percent below the $29.24 million opening weekend take of 2011's The Muppets (a figure which was deflated from that film opening on a Wednesday). Muppets Most Wanted was simply unable to create the same level of pre-release excitement that The Muppets did and was also hurt by arriving so soon after fellow family films The LEGO Movie and Mr. Peabody & Sherman. The four-quadrant appeal of Divergent also didn't help matters for Muppets Most Wanted this weekend.
Muppets Most Wanted opened with $4.66 million on Friday, increased 53 percent on Saturday to take in $7.15 million and is projected to fall 34 percent on Sunday to take in $4.71 million. That places the film's estimated opening weekend to Friday ratio at 3.54 to 1; a sure signal that the film is skewing heavily towards family audiences. The audience breakdown for the film skewed towards female moviegoers (54 percent) and moviegoers 25 years and younger (54 percent). Muppets Most Wanted received a respectable B+ rating on CinemaScore.
The weekend's other new major release, God's Not Dead, debuted surprisingly strong in fifth place with an estimated $8.56 million. The faith-based drama from Freestyle and Pure Flix averaged an impressive $10,979 for the frame from 780 locations. God's Not Dead delivered the largest opening weekend ever for Freestyle (the distributor's previous high-mark was the $5.78 million start of 2006's An American Haunting). Compared to other faith-based films, God's Not Dead opened 6 percent below the $9.11 million debut of 2011's Courageous and 25 percent ahead of the $6.84 million start of 2008's Fireproof.
Along with the recent stronger than expected start of Fox's Son of God, the strong start of God's Not Dead appears to be signaling a resurgence at the box office for faith-based films. That could be good news for Paramount's Noah (which opens this coming Friday) and Sony's Heaven Is For Real (which debuts on April 16). God's Not Dead grossed $2.82 million on Friday, increased 18 percent on Saturday to take in $3.32 million and is estimated to decline 27 percent on Sunday to take in $2.42 million. That places the film's estimated opening weekend to Friday ratio at 3.04 to 1.
Last weekend's top film, Mr. Peabody & Sherman, fell two spots and a significant 46 percent to place in third with an estimated $11.7 million. After a strong hold last weekend, the 3D computer animated film from Fox and DreamWorks Animation clearly took a hit from the arrival of both Divergent and Muppets Most Wanted in the marketplace this weekend. Mr. Peabody & Sherman is set to top the $80 million mark on Sunday and has grossed a respectable $81.00 million through 17 days of release. That places the film just behind the $81.50 million 17-day take of 2009's Cloudy with a Chance of Meatballs.
Warner's 300: Rise of an Empire and Disney's Need for Speed claimed fourth place and sixth place respectively with estimated takes of $8.67 million and $7.78 million. 300: Rise of an Empire was down 55 percent from last weekend, while Need for Speed slid 56 percent. As was the case with many of the major holdovers this weekend, both action films likely took an extra hit from the stronger than anticipated appeal of Divergent with male moviegoers. To date, 300: Rise of an Empire has grossed a healthy $93.75 million in 17 days, while Need for Speed has grossed a lackluster $30.40 million in ten days.
Meanwhile on the limited front, Fox Searchlight's The Grand Budapest Hotel remained impressive with an estimated seventh place take of $6.75 million from just 304 locations. That gave the much buzzed about Wes Anderson directed film a per-location average of $22,204 for the frame. With a 17-day take of $12.96 million, The Grand Budapest Hotel is running far ahead of the $3.73 million 2012's Moonrise Kingdom grossed in 17 days (though it should be noted that Moonrise Kingdom expanded much more slowly in comparison). Given its continued strength, The Grand Budapest Hotel is in great shape to continue to perform well as it expands into additional locations going forward.
Saturday Update: Lionsgate reports that Divergent took in $22.8 million on Friday following (and including) its $4.9 million Thursday night haul. BoxOffice projects the film will bring in $54 million for the weekend.
Those figures are solid and put the $80 million production budgeted flick on course for a profitable global run, although pre-release sales and tracking had indicated a more sizable domestic opening closer to the original Twilight (which banked $69.6 million on opening weekend in November 2008).
On the bright side, word of mouth so far appears to be clashing with the critics: the YA adaptation's Rotten Tomatoes score sits at a rough 41 percent as of Saturday morning, but its Flixster audience score is a much stronger 81 percent--including those who haven't seen the film, but are still anticipating it.
This weekend's second wide opener, Muppets Most Wanted, debuted to $4.66 million yesterday. That's a modest start to a run that will inevitably be muted by the current success of Mr. Peabody & Sherman and next month's Rio 2. The film's critical response (77 percent on Rotten Tomatoes) seems to line up with early audience approval (80 percent on Flixster). Enthusiasm and interest dropped from 2011's revival, The Muppets, and the film should still bring in what BoxOffice is projecting to be $17.5 million this weekend.
Freestyle reports that God's Not Dead grossed $2.82 million from 780 locations on Friday. BoxOffice projects an $8 million weekend.
Friday Update #2: Sources tell BoxOffice that Divergent could be looking at around $25 million for Friday based on matinee and early evening business. From there, the adaptation could hit $53-55 million for the weekend.
Muppets Most Wanted is off to a healthy start. Sources tell BoxOffice that the sequel is on pace to bring in $6.5 million today, giving it a shot at $22+ million for the weekend.
Check BoxOffice on Saturday morning for official Friday estimates.
Friday Update #1: Sources report that Divergent earned $4.9 million from early Thursday night shows. That's a fairly healthy start for Lionsgate's latest YA (Young Adult) adaptation, although a bit underwhelming when compared to the original Twilight's $7 million from midnight-only shows (before going on to a $69.6 million opening weekend back in November 2008). The Hunger Games was responsible for $19.7 million from midnight shows in March 2012, although Divergent was not expected to generate that kind of upfront business.
Check back later today for early Friday projections.
Previously from Fandango: LOS ANGELES - March 20, 2014 - According to Fandango, the nation's leading moviegoer destination, the futuristic adventure, "Divergent," is poised to lead all factions, ranking at the top of the Fanticipation movie buzz indicator, scoring a dauntless 92 out of 100 points. Disney's musical comedy caper, "Muppets Most Wanted" is resonating with families and scoring a harmonious 82 out of 100 points.
"'Divergent' is looking like a sizable hit for all audiences, as the majority of our fans are intrigued by the film's unique premise and the action-adventure genre," says Fandango Chief Correspondent Dave Karger. "Thanks to the good will from the last Muppets movie three years ago, ‘Muppets Most Wanted' is showing strong appeal among family moviegoers who love the mix of music, nostalgia, and A-list cameos."
According to an online survey of more than 1,000 "Divergent" ticket-buyers on Fandango:
· 66% plan to go with a group of friends;
· 56% were attracted to the movie's unique concept, 29% to the action, only 15% to the romance;
· 54% have read Veronica Roth's entire "Divergent" trilogy;
· 50% would pick the "Dauntless" faction, 19% Amity, 15% Erudite, 10% Abnegation, 6% Candor.
According to an online survey of more than 1,000 "Muppets Most Wanted" ticket-buyers on Fandango:
· 82% grew up watching "The Muppet Show" on TV;
· 72% are more interested in seeing the film because it's a musical;
· 71% had seen the previous "Muppets" movie with Jason Segel and Amy Adams;
· 62% said the idea of a villainous Kermit lookalike (Constantine) made them more excited to see "Muppets Most Wanted."
On Fandango's movie recommendation show, "Weekend Ticket," Karger breaks down this weekend's new releases and challenges "Divergent" stars Shailene Woodley and Theo James to a "Newly-Friend Game" of knowledge about each other's habits and likes and dislikes. The full episode can be found at http://www.fandango.com/WeekendTicket.
About Fandango's Fanticipation
Known for having its finger on the pulse of moviegoers, Fandango's movie buzz indicator, Fanticipation, provides statistical insight into the movies fans are planning to see in a given weekend. Fanticipation scores (based on a 1 to 100-point scale) are calculated via an algorithm of Fandango's advance ticket sales, website and mobile traffic, and social media engagement. Fanticipation is not intended as a forecast of the weekend box office; it is a snapshot of movie fan sentiment.
What would the summer season be without at least one major reboot? Come March 16, Warner Bros. will deliver the first reboot of the season with Godzilla. This week the BoxOffice team takes a closer look at the monster flick's commercial potential.
- The first theatrical trailer inspired glowing reactions.
- Co-star Bryan Cranston already features heavily in the marketing material. That's a wise move considering that the actor carries plenty of clout post-Breaking Bad.
- Godzilla is one of the most--if not the most--globally recognizable movie monsters of all time.
- The ensemble cast features key up-and-coming stars such as Aaron Taylor Johnson and Elizabeth Olson.
- It's possible that the bad taste that 1997's Godzilla left still lingers for some moviegoers.
- Opening in between The Amazing Spider-Man 2 and X-Men: Days of Future Past won't be easy.
Check out our prediction for Godzilla and other films in the table below.
|Title||Release Date||Distributor||First Weekend of Wide Release||Cumulative|
|Million Dollar Arm||May 16, 2014||Disney
|Godzilla (2014)||May 16, 2014||Warner Bros.
|Moms' Night Out||May 9, 2014||Sony / AFFIRM
|Chef||May 9, 2014||Open Road
|Neighbors (2014)||May 9, 2014||Universal
|Legends of Oz: Dorothy's Return||May 9, 2014||Clarius Entertainment
|The Amazing Spider-Man 2||May 2, 2014||Sony / Columbia
|Brick Mansions||Apr 25, 2014||Relativity Media
|The Other Woman (2014)||Apr 25, 2014||Fox
|The Quiet Ones||Apr 25, 2014||Lionsgate
|Transcendence||Apr 18, 2014||Warner Bros.
|Bears||Apr 18, 2014||Disneynature
|A Haunted House 2||Apr 18, 2014||Open Road
|Heaven is for Real||Apr 16, 2014||Sony / TriStar
|Draft Day||Apr 11, 2014||Lionsgate / Summit
|Oculus||Apr 11, 2014||Relativity Media
Captain America: The Winter Soldier
|Apr 11, 2014
Apr 4, 2014
|Noah||Mar 28, 2014||Paramount
|Sabotage (2014)||Mar 28, 2014||Open Road
|Bad Words||Mar 28, 2014||Focus
Phil Contrino, Daniel Garris and Shawn Robbins contributed to this report.
Noah took a strong $1.4 million debut from 635 locations in Mexico. The result is on par with opening days from Gravity ($1.4M) and 50% ahead of Skyfall ($820k).
South Korea added $1.4 million on Friday, up 20% from its Thursday opening, to reach a $2.6 million running total in the market. The Friday numbers in South Korea are on par with Gravity, 10% above Inception, 85% above Skyfall, and nearly three times those of Life of Pi.
Noah will expand to 20 additional overseas markets alongside its day-and-date debut with North America next weekend.
Other top markets will open on the following dates:
· Germany - Apr 3
· Brazil - Apr 3
· UK - Apr 4
· Spain - Apr 4
· France - Apr 9
· Italy - Apr 10
· Japan - Jun 13