While movie choice certainly plays a big role in people's decisions about whether to trek to the neighborhood multiplex, industry executives believe there's something more endemic at work. "Historically when attendance dropped, the key thing would be to blame it on poor product," says Jim Fagerstrom, who until May was senior vice president and CIO at Loews Cineplex Entertainment Corp. in New York. (In January, AMC Entertainment Inc. completed its merger with Loews to create a 415-theater chain.) Yet as attendance trends continue to slide, "there's a general sense in the industry that it's more than poor product now." Theater companies are therefore compelled to "do whatever we can to maximize revenues and decrease costs," says Fagerstrom.
At Loews, IT implemented a business intelligence system that enables managers to monitor variable costs closely. By getting a real-time view into payroll costs per hour, theater managers can more closely align work schedules with actual and anticipated box-office receipts so theaters are neither under- nor overstaffed. Carmike uses a chainwide proprietary system that centralizes administrative functions such as ticket and concession sales tracking and theater staffing levels. The system also allows corporate managers to centrally manage payroll, track invoices and generate reports, all in the name of keeping daily tabs on performance. Cineplex Entertainment LP, a $700-million chain in Toronto, delivers comprehensive performance data to theater managers via individualized portals on the company's intranet, says CTO Jeff Kent.
When it comes to increasing revenue, companies need to improve the overall moviegoing experience and diversify by filling seats any way they can. And convenience is one area where IT can help make improvements. Cineplex is upgrading all its point-of-sale terminals to speed sales at the box office, according to Kent. The company is also "looking at wireless capabilities to bring the box office to patrons," he says. Mobile devices, for example, can sell tickets in parking lots or lobbies and can scan in customers who have printed tickets they bought on the Internet at home. Cineplex is also looking into delivering tickets to cell phones.
At Landmark Theatres, a chain of 290 screens owned by Cuban and Wagner, vice president of IT Paul Duchouquette says that using customer-facing technology to boost convenience is a priority. Landmark, which exhibits art-house films, is installing kiosks throughout theaters so customers can buy tickets and concessions when the theater is crowded. "The kiosks provide a consistent experience and contribute to our loyalty program," Duchouquette says. Landmark's loyalty program aims to establish a sense of community among customers via online newsletters and exclusive screenings.
Cineplex is also launching a loyalty program. By the end of the year, patrons will swipe a loyalty card whenever they make a purchase; the theater will then link that transactional data with general demographic data to get a clearer window into its customer base, says Kent. In return, customers will receive discounts or free screenings.
More Than Movies
Companies aren't betting their business on movies alone or even on the onscreen advertising that increasingly is a part of any movie's preshow. Making facilities available for corporate events, college classes, pay-per-view sports and concerts are strategies most companies are pursuing in order to fill theaters at times they would otherwise be empty; according to McAlpine, many seem to be having some success with these alternate uses.
Through its partnership with Microsoft, Cineplex hosted a weekday event in which people played the Halo 2 video game, which was projected on theater screens. The company also offered a pay-per-view Bon Jovi concert the day before the band released its latest CD. To accommodate such uses, theaters are Web-enabled and equipped with the latest digital cinema technology.
Even as movie attendance flags, many in the industry believe that a segment of the population will continue to choose a trip to the theater over a DVD. There's something about the communal experience that has infinite appeal. "Going to the theater and seeing a movie on a 60-foot screen is way better than seeing it at home," says Kent. "Comedies are funnier and scary movies are scarier when you see them with a crowd."
Megan Santosus, a former senior editor at CIO Decisions, is now a features editor for SearchDataCenter.com. Write to her at email@example.com.
This was first published in June 2006