Cineplex rises from the pandemic ashes

The entertainment brand bounces back as consumers return to cinematic and live experiences.

With COVID restrictions easing, studios are releasing films again in theatres. This summer, highly-anticipated titles such as Minions: The Rise of Gru and Top Gun: Maverick finally made it to the big screen. Both were originally set to be released well over a year ago.

While the pandemic saw Cineplex shares drop by 75%, recent reports show that the entertainment brand is bouncing back. Playback sister publication Media in Canada spoke with CMO Sara Moore to get a more detailed look at how things are developing on the road to recovery.

Media in Canada: In the report from the first fiscal back in March 2022, Cineplex saw revenue numbers surge by 452% to $228 million over the prior period that was under pandemic closures. Theatre attendance also increased significantly in the most recent quarter to 6.6 million patrons. In the prior quarter, Cineplex only welcomed 415,000 patrons. How is the current quarter trending in terms of attendance and revenue growth?

Sara Moore: We’ve reported the full quarter now and we are thrilled with the full second quarter results. It was our highest EBITDA all quarter since the pandemic began – a great turn on profitability, which is huge. And when we look at our attendance, because of the volatility right now, we’re benchmarking to 2019. It was the last time we were open everywhere.

In April, we had about 56% of the 2019 audience and that went up to 72% in May and 89% in June. So that’s about 20% of our audience every month coming back for the first time. And that continued into July, when we had about 85% of the 2019 audience. That’s leading to record-breaking concession numbers. People are really indulging themselves in the experience of returning to the cinema.

There is growth in premium formats as well, with about 42% of our audience coming to VIP or AVX or Screen X. We’re thrilled to see Canadians return to the movies.

What are your biggest growth opportunities?

I think there are still people that we can identify and bring back through the Scene+ program. We have an opportunity to target those people who haven’t been back, find out what movies they want to see and what format they love to see them in. We can talk one-to-one with them and invite them back. We will continue to do that through innovative programs like CineClub, where we have the opportunity to really drive the number of visits per person. And we are seeing better-than-forecast results in terms of people who are joining, number of visits and size of spend.

There are many more streaming services than there were two years ago. How is this affecting your recovery and how are you responding to the threat?

We have a great digital cinematic product of our own called the Cineplex Store. With that, we offered great at-home viewing before and throughout the pandemic. As the biggest entertainment provider in Canada, we want to be able to provide multiple ways for people to enjoy our titles, whether at home or in one of our theatres.

Does that mean that any title that you have in the theatre, customers can access at home?

Not at the same time, but yes. For instance, you can go to the Cineplex Store now and see Top Gun: Maverick. But we also have a catalog of 10,000 titles. We have a great on-demand service. If there’s that one movie that you can’t find anywhere, you can very likely find it in the Cineplex Store.

How about your amusement solutions and location-based entertainment: what are you seeing there?

Our second quarter results show that they also had a record-setting quarter for EBITDA. Delivering on that vision of a strong and diversified business is of incredible importance to us. We’ve always had great gaming and great food and great content in our movie theatres. We have found a new and unique way of delivering in these fantastic new formats.

Rec Room takes it up a notch to live entertainment. It’s this fantastic adult playground. Coming out of the pandemic, people want to experience things together. They want to make the most of that time out and live entertainment is such a spectacular way of doing that. From karaoke to drag brunch, to K-pop bands, to trivia leagues and bowling leagues, we are booking hundreds and hundreds of live events in our Rec Room every year. It’s a full-service restaurant, a great patio, a massive bar, hundreds of games and an entertainment hall that offers live entertainment almost every night live for hundreds of people. We’ve got 10 Rec Rooms across the country, from Vancouver to St John’s.

What about your media business? What does that consist of?

It’s a significant business. We deliver 20 billion impressions a year in different categories. First is our cinemas. That includes management of all of our on-screen lobby shows and digital screens. We are in 68 different shopping centres across Canada. We announced a few months ago that we have 14 downtown concourses, places like The Path (downtown Toronto’s underground concourse) and CIBC Square. And then there’s all of the media inventory within our entertainment locations.

From a marketing perspective, how are you going to drive attendance and increase frequency?

A lot of it is underpinned by the great data that we have. Having started the Scene program with Scotiabank many years ago, and seeing it turbocharged over the last year with Scotia Rewards coming into it, the wealth of data and the wealth of movie lovers within that is an exceptional marketing tool for us. We leverage new digital channels to get to customers at the right time and understand what they want. We’re going to continue to do that.

We have a phenomenal film team that not only knows what our guests want, but understands what’s available globally. For instance, we’ve been able to introduce international titles, a lot of Bollywood, and from China. With some of those titles, we are capturing almost 70% of the North American box office. It’s about understanding content, understanding what’s available, understanding our audience, then bringing it in, marketing it to the right people and putting it in the right theatres.

What about marketing communications?

We have been with Zulu Alpha Kilo for many years. Last year we launched a new brand campaign with them, and we are continuing to work with them on that brand platform. It does a beautiful job of reminding Canadians why the experience within the movie theatre will never be matched anywhere else.

Any product innovations aside from the things you’ve mentioned already?

CineClub would be the latest. We also just launched an annual way of buying that we think is going be an amazing way for people to be able to gift. We will also continue to focus on experience and indulgence. We want to make sure that we match every movie-goer with the best possible experience, whether that’s IMAX, AVX or VIP. And we’re talking to people about what that means so they can they can fully maximize their movie-going experience.

Story by Will Novosedlik

This story originally appeared in Media in Canada