M+E Connections

It’s still early, but movie theater chain Cinemark is seeing positive initial results from the recent introduction of its Movie Club monthly subscription service, according to Cinemark CEO Mark Zoradi.

With Movie Club, consumers who pay $8.99 a month get credit to see one 2D movie ticket at a Cinemark theater and whatever credit isn’t used gets rolled over to the following month. Unlike the rival MoviePass program that offers consumers unlimited 2D movie tickets at $9.95 a month (less for those who pay for a full year in advance), Movie Club isn’t targeted at consumers who see multiple movies each month theatrically.

Movie Club “aims to drive brand loyalty and guest satisfaction while growing attendance and securing market share,” Zoradi said Feb. 23 on an earnings call for Cinemark’s fourth quarter and year (ended Dec. 31). “In less than 12 weeks – 80 days to be exact – we have signed up over 120,00 members, far exceeding our initial launch goal,” he told analysts.

That “equates to an average of over 350 members per Cinemark theater location,” he noted, adding: “Already, Cinemark’s Movie Club members represent nearly 2 percent of our domestic ticket sales. Notably, nearly one-third of Movie Club members were not previously a part of our Connections program, which suggests we’re signing up and getting to know an even broader moviegoing audience.” Connections is Cinemark’s customer loyalty program.

Movie Club members so far are “highly engaged, with 58 percent of the accumulated movie credits already used and the remaining credits rolling over to the next month – a standout feature that consumers love,” Zoradi said, adding: “The consumer response to Movie Club has been overwhelmingly positive, particularly regarding the benefits and features of our program such as no online fees (a benefit that’s especially appealing to the millennial audience), 20 percent discount on concessions … and the ability to reserve seats in advance, upgrade to a premium format and bring a companion for the same Movie Club price. We’ve also received incredible guest feedback that our program is not a ‘use it or lose it’ proposition and that it’s directly associated with an established brand that they know and trust.”

Movie Club’s ease of use has also been also getting good marks from members, he pointed out.

“We’re most pleased with these early launch results, our guest response and the ability for detailed data accumulation and the significant growth opportunities for Movie Club. We’re excited about the many consumer benefits and marketing opportunities in front of us as we continue to grow and develop our program for the long-term in a financially prudent and sustainable way,” he said.

But he said it was still “a little early” to provide data on how much Movie Club has increased attendance or “throw out any projections” in general.

Meanwhile, after much talk a while back about more Hollywood movie studios moving to premium video on demand (PVOD) for more of their theatrical releases, he said: “In all of our discussions with our studio partners, there is not a big emphasis or talk going on relative to PVOD” of late. With the planned AT&T/Time Warner and Disney/Fox acquisitions, along with a recent “improvement in the box office” and also “all the alternatives that consumers have at home already, I think there’s less enthusiasm among studios right now to push a PVOD agenda,” he said.

Cinemark is also readying the launch of its first major virtual reality (VR) initiative, he said, pointing to the deal his company recently signed with VR company The Void. The theater chain plans to open its first VR experience with The Void at Cinemark’s flagship West Plano, Texas, theater this summer, he said, noting it “will be only the fourth commercial U.S. installation of The Void experience to date, following” Times Square in New York City, Downtown Disney in Anaheim, California, and Disney Springs in Orlando, Florida.

“We’re excited about our partnership with The Void and are eager to offer our guests” the most recent Void VR “hyper-reality experience,” which is “Star Wars: Secrets of the Empire” that he noted was created in collaboration with Industrial Light & Magic’s xLAB (ILMxLAB).

Cinemark also continues to expand its premium large format (PLF) theatrical initiative whose rivals include IMAX. Cinemark is “already the number one private label, premium large format in the world with our 242 XD-branded screens and we’re working diligently to further expand our PLF market share,” Zoradi said. As a result of the “circuit-wide XD marketing campaigns and promotions that we executed throughout 2017 and coupled with the benefit of luxury lounger seats that we’ve been adding to these auditoriums, we achieved an all-time [best] XD result… generating 8.6 percent of our worldwide box office on just 4.1 percent of our screens,” he said, adding: “During 2018, we’ll continue to update, enhance and extend the promotion of our XD brand as we seek to continue building on this success.”

Overall, Cinemark added 92 screens globally in 2017 and “expanded our footprint to just under 6,000 screens spanning 16 countries throughout the Americas,” he said. The company expects “heightened opportunities” in 2018 in the U.S. of about 1-2% more screens — “incremental screen growth” — and another 5-6% in South and Central America, he said.

Cinemark shares were up more than 6% at $42.20 in afternoon trading Feb. 23, after the company reported Q4 revenue grew to $750 million from $700.9 million in the same quarter a year earlier, while profit grew to $95.1 million (82 cents a share) from $77 million (66 cents a share).