Lobbying for business

With exhibitors looking to transform cinema lobbies into monetised entertainment and leisure destinations in their own right, Martin Dew investigates this new paradigm and speaks to some of the companies leading the charge

 

The luxury seating and premium large format auditorium revolutions defined the industry lexicon until as recently as last year, and we now face the very real prospect of cinema lobbies becoming the focus of investment for a swathe of exhibitors around the globe. The new lingo being adopted in the tradeshow aisles is suddenly dominated by slogans such as ‘location-based entertainment’ (LBE) and ‘cinema entertainment centre’ (CEC). It’s worth asking whether the old business model for cinema exhibition is being replaced by a newer, more dynamic way of engaging an audience, based on the its buying habits, and even the way it moves around and responds to a retail or entertainment space. Are we, for example, witnessing a blurring of the lines between what we always believed constituted a conventional cinema auditorium, and an experience we might be more likely to stumble upon in a theme park? Or is the tentpole comic book movie itself about to morph into an e-sports VR interactive gaming extravaganza?

Virtuous circles of marketing initiatives from studios and beverage companies could be the key to pulling a punter into an auditorium in one instant, and in the next moment, back into
a lobby or other space to build on the previous experience — with the exhibitor all the while increasing footfall and keeping a captive audience. One of the extraordinary by-products of this new era is the resurgence of gaming arcades, which are now also chief components of several enterprising exhibitors’ offerings.

There are a number of industry service providers and suppliers cottoning onto these trends and channelling their expertise into helping exhibition clients explore new revenue opportunities, and sometimes not in the most obvious places…

 

OuiMarket4U
Heather Blair has run her own California-based consultancy — OuiMarket4U — since 2001 and believes the exhibition industry is undergoing some radical changes. She has worked closely with both MediaMation and Argentinian LUMMA 4D E-Motion — companies formerly rooted in theme park-based attractions — and introduced them to the world of cinema exhibition. As well as inviting 170 cinema companies to join her own related think tank, she hosted a workshop for 10 chains at Studio Movie Grill in Arlington, Texas, in November before marching them all off to the gala event of the Esports Awards for a serious chinwag.

“Amusement-style attractions interest cinemas right now because they are seeing success,” Blair tells CT with confidence. “They’re hiring consultants and they’re all curious about e-sports. They’re looking for a higher ticket program for something that you absolutely unequivocally cannot get in your own home.”

She says that the long-range goal is to get e-sports events into cinemas and that the interest is growing on a daily basis. Several US exhibitors have their eyes trained on what US companies like Cinergy Entertainment Group (true pioneers of the cinema entertainment centre concept) are doing, and they’re even sending out secret shoppers to get the scoop. “(Exhibitors) are saying the movie part of their offering is only 20–30% of the value of their entertainment property,” Blair continued. “Exhibitors don’t have a strategy, so they’re looking to see who’s doing something different and see if they can apply that to their cinema.”

Blair also notes that outside the US, she has a host of clients who are talking about putting facial recognition technology into their cinema lobbies so they can “understand who someone is” when they enter the space. Although such ‘lobby activations’ are not widespread stateside due to market maturity, they are gaining traction in the Middle East and Asia. She’s working with a company in Abu Dhabi which is seeking approval for an AI character to greet customers as they walk through the door. In Malaysia, Blair has a customer who wants visitors to download an app while in the lobby and engage directly with movie posters to view trailers, and book tickets instantaneously.

“Do you remember when AMC came out with the luxury seat — everyone turned their noses up. Now everybody is doing luxury seats.” Blair believes that exhibitors will experience a similar shift in attitudes as they develop lobbies for attractions and interactive entertainment.

 

CinemaNext
With the prospect of virtual reality experiences starting to assert themselves in the lobby space, a few companies have entered the fray with their own offerings. CinemaNext (the exhibition services arm of Ymagis Group) has developed its ILLUCITY Corner concept for arena games and virtual rides. The company believes the system is an attractive proposition for exhibitors with its focus on games and set-pieces for all ages, as well as ease of installation and modular construction.

With proof of concept at the Paris-La Villette VR adventure park opened last year, CinemaNext created a bespoke iteration of ILLUCITY for cinemas, with attractions open at Kinepolis Liège, Belgium, and Tanweer’s Town Cinemas, in Athens. Consumer prices for an experience range from €3 to €10 (at an average of €1 per minute) per player. CinemaNext is convinced options like VR attractions in lobbies will represent a significant stake in defining the future of cinemas as entertainment centres.

Ymagis’s communications manager Alexandra Body told us, “We believe that over the next few years cinemas will feature more and more entertainment activities in their lobbies. Indeed, it is important for cinemas to evolve with the times to meet their guests.” changing needs.”

 

Onirix
Meanwhile, in the South of France, newcomer Onirix has created a 360˚ VR Rotary Chair designed specifically for use in cinemas and museums. But CEO Yohan Bouché came at the industry from a somewhat different perspective, intending to give VR content creators and distributors an outlet for their work, so that the public could get a chance to experience what was out there.

Yohan places emphasis on the comfort of the chair, its lack of physical restriction, ability for a player to look in any direction and for the content to be the highest quality available, certainly in terms of resolution. (The company is already pushing for content creators to lens their work with the new Insta360 TITAN which can, as the name implies, shoot within a 360˚ VR orb, delivering 11K resolution imagery.) Onirix has been screening content incorporating both documentaries and fiction, at up to — but not limited to — a running time of 15 minutes per experience.

Yohan doesn’t underestimate the power of cross-promoting content with the likes of Disney, Paramount, Universal and Marvel, and the imperative to screen “known IP.” Yohan’s plan is to create experiences for the public which they will never forget. “We worked at Cannes this year in partnership with Marche du Film where we announced a new experience called Everest VR,” says Yohan. “People were clinging to the headrests and the armrests. I loved it!”

When considering the ever-looser boundary between a classic auditorium and a lobby-based entertainment space, Yohan is acutely aware of that potential. His company has created a ‘synchronous mode’ where more than one (and perhaps many) viewers or players can enjoy a shared experience: “We figured out that a lot of people were going to venues to enjoy an experience as a group, so we decided to develop a social mode, where users can enjoy an experience together. That means it is synchronised between all the chairs in a room with the same sounds and images playing at every station. People can communicate with each other using their microphone and headset. They can talk and express emotion while the experience is being played.”

Yohan believes that prices shouldn’t top €5 to €10 for a 15-minute VR experience, which he says is “…not much if they remember it for the rest of their lives.” He also sees the business sense in exhibitors exploiting their square footage, acknowledging that operators are “ready to try new solutions to monetise their space.” With screening durations shorter than conventional movies, and with several customers enjoying an experience within an hour, price-per-minute revenues could be higher than those in a regular auditorium.

 

Martek
Although identifying the right equipment or entertainment modules for a lobby or ancillary space are critical to the overall experience, there is also undoubtedly a science applied to the respective architecture and floorplans. UK-based Martek has been providing exquisitely-designed, contemporary lobbies for such high-profile clients as Odeon and Cineworld since the 1990s, and now boasts some 65–70 operators on its roster. Although mainly attending to UK customers, its reach includes projects in Europe and the Middle East.

Marketing director Kirsty Carnell tells CT that the focus of the company’s work is in the planning of the areas “…in which a customer will exchange money with the operator to buy goods.” Although this predominantly means concessions areas, Martek also advises new exhibitor clients to source third party partners for F&B opportunities, such as branded coffee outlets like Costa.

The company’s years of expertise mean that it is savvy to the pitfalls of not engaging fully with customers when they enter the space. “What doesn’t work and what we’ve seen not work,” says Carnell, “is where an operator confuses a customer in what they’re selling by either offering too much in terms of F&B or not having clear messaging.” She continues to emphasize that cinemagoers don’t want to queue for long and do want to make purchasing decisions quickly. A lobby itself should be “a really attractive space” to encourage customers to spend time both before and after a scheduled film showing.

Although Martek has had fewer calls to build specific VR or gaming areas at UK sites, Carnell realises “the lobby is more of an entertainment destination now, and that is felt in the UK through technology and the way lobbies are presented.” She particularly notes a rapid increase in demand for LED screens and eye-catching, moving content as punters approach concessions areas.

 

Pinnacle
New Jersey-based Pinnacle Entertainment Group is a consultancy outfit which also understands the need to hand-hold new clients when building out a cinema lobby environment. CEO George McAuliffe likes to get involved early in a project, in what he calls the “space-claiming” stage, sitting by an owner’s side as the look and feel of an entertainment space is developed.

Having recently celebrated its 25th anniversary, Pinnacle’s core expertise is in the development of family entertainment centres (FECs), a sector that is currently enjoying burgeoning growth again stateside. Formerly of Edison Entertainment, McAuliffe set up his own consultancy and, managing to land Disney as his first account, was charged with lending direction to the build-out of indoor theme parks, DisneyQuest and ESPN Zone. The company now has upwards of 250 clients, with bowling alleys and arcade developments defining much of their output. With a growing number of cinema exhibitor clients joining his portfolio too, McAuliffe sees a clear picture emerging.

The family component of entertainment centres is possibly more applicable today than it’s ever been. McAuliffe is astounded that so many games are being played by three generations at once, with laser tag still one of the leading attractions. He admits that he recently travelled to a venue where “people with white hair like mine” were picking up their infra-red beam shooters and entering into battle. Additionally, bowling is proving consistently strong in the US, while also accelerating in Europe.

McAuliffe believes there’s a phenomenon at play in the world of cinema exhibition, what he calls “the old model versus the new.” In the US, cinemas typically had a few games in the lobby “over there in the corner somewhere” which many considered an afterthought. He feels the purpose was to attract pocket spending from customers on their way in and out of the site, but that this was incidental to the theatre experience itself. “So, that’s kind of the old model which worked well for many and continues to,” McAuliffe tells CT. “But we’re seeing it on a much larger scale now where there’s a new model in play. That’s where they’re plugging in significant arcades that have the power to attract people on their own.”

The cinema business model is challenging, suggests McAuliffe. There is competition for people’s time and their entertainment dollar, and the cost of producing major movies directly affects cinema economics. “If I were in the cinema business, and if what I read is true, I’d be looking for other sources of income,” he says.

US-based Cinergy Entertainment Group’s adoption of combined cinema entertainment centres is the business model that grabs his attention the most. The typical cinema is a “big box” consuming large parking areas which are only being utilised for limited time periods during the week. If other entertainment business units are deployed, an operator can start to leverage its real estate.

Another compelling factor for cinema operators is McAuliffe’s belief that the movie-going audience is already “qualified” (as in the marketing term) for family entertainment experiences. If a message goes out to 10m people, say, only a small percentage of the recipients will be qualified. When entertainment assets are put in front of cinema traffic, many customers will combine a visit and extend their time on the property. That might include customers who show up at 8pm for a 9:30pm showing to eat and play games beforehand, while others will come to the location on separate occasions for birthdays and special occasions. 

While Pinnacle helps clients select the right mix of in-lobby attractions and extends beneficial national pricing deals, the company stops short of pulling in third-party partners for food and beverage provision, such as restaurant chains and coffee houses. “We are firm believers that you can’t be an expert in everything!”

McAuliffe also offers some sound advice to those operators starting out on their journey to develop entertainment centres and expand their horizons: “Of the (companies) which have brought family entertainment attractions to their core business —whether that’s a cinema, a bowling center, or a restaurant — the most successful ones are those that have integrated it into their brand and their experience.” He reiterates the point about the new model and the need to get away from the idea of an attraction being “somewhere over there in the corner.” He stresses that the most successful businesses aren’t just offering arcades but are bringing in multiple attractions. When the concept of a family entertainment centre combines many elements “…the numbers go up.”

 

We may be on the cusp of a small revolution in the exhibition industry, possibly seeing the cinema complex shift into something not instantly recognisable today. Cinemas have rightfully been the purveyors of themed content for years, so perhaps it’s only a matter of time before traditional sites transform into attraction-based venues, offering far more to customers than previously thought imaginable. The cinema lobby is a natural contender for exponentially-growing monetisation opportunities, and it seems clear that the operators who can respond to — and keep up with —the trends will reap the available rewards. 

 

Martin Dew

About Martin Dew

Martin moved to San Francisco in 1995 to join the THX Division of Lucasfilm Ltd., initially overseeing global retail training for consumer products, and subsequently as director of international sales for professional cinema. He then joined the Digital Cinema Division of NEC Corporation in Los Angeles as director of sales for North and South America, selling DCI-compliant 2K projectors to exhibitors as part of the digital cinema rollout. He was later employed by DreamWorks Pictures to assist with shooting schedule mapping for several major feature films for budgetary and planning analysis, including The Revenant (2015) and The BFG (2016). During his last few years stateside, Martin worked on the other side of the camera as an actor, with cast credits in Steven Spielberg’s War Horse (2011), Lincoln (2012) and Bridge of Spies (2015), and Paul Thomas Anderson’s The Master (2012), Inherent Vice (2014) and Phantom Thread (2017). He played Hugh Hibbert in Mad Men, appeared on the Conan O’Brien US network chat show, Conan, and regularly worked with Will Ferrell’s online comedy troupe, Funny or Die. Since returning to the UK in 2016, he has been writing as a freelance journalist for this publication, Essential Install and Home Cinema Choice consumer electronics magazine. He is also news editor of the US website, Home Theater Forum (www.hometheaterforum.com).

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