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.