By Charlie Wilton

Last week, I read that Cineplex will offer home delivery popcorn in Vancouver, Edmonton, Calgary, Ottawa, and Montreal. I have long admired Cineplex and this latest move, even though it’s a small one, reinforced that they are truly one of Canada’s great innovative brands. They offer business lessons for successful innovation we can all learn from.

Why do I admire them?

Like many businesses, Cineplex has faced many headwinds and a multitude of trends that have disrupted and put pressure on their core theatre business. They’re weathering through an aging population, people choosing to stay home more frequently, the growth of online content, competitive movie streaming, and new streaming entertainment options such as Netflix that have exploded onto the market and captured consumer attention (as you see in the Google Trends chart). And to top it off, they are a hostage of the production studios whose movies, great or awful, they show. Good years are never guaranteed. 

cineplex vs netflix chart

However, rather than complain about the nature of their business, the impact of changing demographics, or the increasingly competitive landscape, the leaders at Cineplex are doing what great leaders should do. They’re taking action. They’re controlling the controllables. They’re being innovative, creative, and leveraging their core assets to maximize shareholder returns and build brand value.

  • When faced with declining attendance, they maximized average revenue per guest by premiumizing the concession offerings. They offered larger sizes and better products.
  • They invested in their infrastructure by developing a VIP service for those who are willing to pay for special services.
  • They’ve embraced new content opportunities to maximize their unmatched viewing experience. In addition to showing operas and ballets live on screen, they’re bringing NFL Sunday night games and the Superbowl to theatres.
  • They added arcades and games for families and other people who want to spend a bit of time and money while waiting for the show to start. Or to simply capture the attention of those who happen by.
  • They are showcasing current virtual reality technologies by trialing an IMAX VR centre, the first of its kind in Canada, letting customers enjoy an immersive VR experience when they might not otherwise have the opportunity. They plan to add at least five immersive VR centres over the next several years, theatres designed with sensory effects like touch and smell for movies franchises like Star Wars and Ghostbusters.
  • They creatively introduced in-theatre media advertising, a new revenue stream.

Doing everything to reverse the challenges of the core is a daunting task, but great leaders choose to look beyond their own walls. Cineplex has also embraced a parallel strategy of diversification.

  • They leveraged their knowledge of media and created a new division which focuses on content for restaurants and other consumer venues outside of their venues. Tim Hortons menu boards are a great example of this.
  • They launched the Rec Room, a fun family oriented concept that combines dining and gaming to broaden their offer beyond the core.

Whether you think home delivered theatre popcorn is a good idea or not, hats off to Cineplex for showing us what great leaders do. They take action, innovate, test and learn, leverage their assets, and build new capabilities. These leaders are in a tough business but I admire their tenacity and resolve to focus on what they can control to maximize shareholder returns and build enduring brand value.