The company also employs a “zoning” program that limits the number of steps an employee needs to take in order to get food and drinks into someone’s hands.
Such strategies are working magic. On top of $467-million of box-office revenue, Cineplex pulled in $243-million from concessions in the first nine months of the year, about 9 per cent more than the year-before period. Per-patron concession revenue was a record $4.68 in the third quarter, continuing a steady rise over several years.
Increasingly, Cineplex’s food offerings go beyond traditional theatre fare. Customers can choose calamari over popcorn and will soon be sipping wine instead of soda in some of the company’s VIP theatres.
The soft-spoken Mr. Jacob has a level of understanding that may escape many in his industry. He spent countless hours in disguise – even shaving his trademark mustache – as a front-line employee of his own chain for the television series Undercover Boss Canada. At one point, he was tossed off the popcorn station by a frustrated manager about three decades his junior (he thanked her by sending her to Paris once his identity was revealed and offering her a job in the company’s head office).
“Loyalty,” he says, “is important in any business.”
Concessions aren’t the only sideline. Cineplex (which operates theatres under the Cineplex Odeon, SilverCity, Galaxy Cinemas, Colossus, Coliseum, Scotiabank Theatre, Cineplex VIP Cinemas, Famous Players and Cinema City brands) is also one of the largest digital signage companies in Canada, with its interactive displays providing news and information to hundreds of thousands of people riding up and down in elevators each day or stopping for a sandwich at rest stops along Canada’s biggest highway.
Then there’s the gaming division that is one of the largest providers of arcade games in North America.
If the Ultraviolet rollout is to be a success, it will be on the back of the 4-million-person strong Scene loyalty program that the company has spent the past several years building, with its 50-per-cent partner Scotiabank, but has yet to fully exploit. The loyalty program keeps track of who watches what and rewards participants with discounts.
“When you think about what this company is, it’s nothing short of astounding,” said Jordan Banks, the president of Facebook Canada (and long-time movie aficionado). “It’s a world leader in the consumption of everything that isn’t a ticket – I’m not sure anyone does it better. And their loyalty program is massive – you could almost call them a data company.”
Investors are feeling pretty good, too – with the company’s stock up 25 per cent in 2012 on the strength of a string of strong quarters.
Still, seven of the 13 analysts listed by Bloomberg advise investors to “hold” the shares (six advise “buy”), with some concern that the shares have peaked until the company taps new sources of revenue.
Mr. Jacob thinks he knows where to find that new money.
While Cineplex has been amassing data for several years, it’s only now it feels it is ready to analyze and act on that information in a profitable way.
Ultraviolet is basically an online locker, says vice-president Patricia Marshall, where users can rent or buy movies directly from Cineplex. But when you add in the loyalty program, she says, it becomes a far more powerful business proposition.
“Think of a James Bond movie,” she says. “Wouldn’t it be great to see the movie that came right before the new one? So if you go to our website to buy a ticket, we’ll let you buy any of the other Bond movies at the same time. And give you bonus points, and discounts at the concessions. And when you walk out, we can sell you a copy of that movie that will show up in your digital locker when it’s done showing in theatres. We get you before everyone else.”
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