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October 2008 - Strategy Magazine
Special report - Brands of the year

It's a Cineplex world

by Mary Dickie
page 42

It's the top dog, the dominant player, a towering presence in its field. But Cineplex Entertainment is hardly resting on its laurels. The Toronto corporation - which announced Q2 revenues up 4.7% - began showing films in 1979, although its roots go back to the '20s. It is the largest film exhibitor in Canada, operating 1,317 screens in 129 theatres and hosting 61 million visitors a year.

But showing movies is far from enough for Cineplex. Over the past few years, it has embarked on a number of initiatives to help it compete not just with home entertainment systems, but with virtually all other rivals for consumers' leisure-time dollars. It reached out to different demographic groups and brought big-city attractions to small towns by hosting sold-out filmed musical concerts, Metropolitan Operas, NHL games, National Ballet performances and World Wrestling Federation events. A new concert series showcases indie-rock bands, and theatres are also available for larger-than-life videogame play.

Cineplex also enhanced the movie-going experience by including side attractions like bowling and babysitting services and installing IMAX and 3-D projection capabilities. Eventually, it plans to sell DVDs and even downloadable movies through its website, cineplex.com. That might seem like competing with itself, but Susan Mandryk, Cineplex's SVP customer strategies, says it's all part of the master plan.

"It enables us to deepen the relationship with our movie-going customers so that they'll also buy videos from us," Mandryk explains. "It also allows us to bundle value-added offers, like ticket purchase with an online or concession purchase. We see a lot of synergies between the two businesses."

"The Internet, pay TV and DVDs should have created a perfect storm for movie theatres," says Ken Wong, professor of marketing at Queen's School of Business. "But Cineplex recognized that consumers were looking for more than just seeing a movie, and that not everyone going to the movies is a teenager. They responded with product innovations and enhancements for different segments, and built a mutually beneficial partnership with Scotiabank. They took some bold steps, and for that courage, if nothing else, I give them full credit."

The inspired partnership with Scotiabank - which began when the bank bought the naming rights to a number of theatres - resulted in the creation of the Scene loyalty program in May 2007.  The plan, which enables members to redeem points for music and movies, has exceeded all expectations, and turned out to be a valuable resource.

"We've amassed over a million members, and have been able to track a lot of information about their movie-going behaviour," says Mandryk, who works with a team of 20 - half on interactive and the other half on in-theatre marketing. "We're now putting together about eight different segments to develop marketing programs around. If we know there's a value-conscious segment that goes out on special price Tuesdays, we can target concession offerings to them. And the more we know about our target audience, the more we're able to create these value propositions."

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