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Five questions for Cineplex’s CEO Add to ...

Attendance at Cineplex Inc.'s theatres dipped slightly as fewer blockbusters drew consumers out of the comfort of their living rooms, but the company posted strong profits on increased ad sales and a record year at concession booths.

The company posted a $10.9-million profit in the fourth quarter, compared to $4.4-million in the same quarter last year. Attendance was 15.1 million, down from 15.7 million.

Concession sales increased 3.3 per cent to $4.41-million, and media revenues increased 11 per cent to $91.2-million.

Chief executive officer Ellis Jacob spoke to media reporter Steve Ladurantaye after the company's conference call Thursday.

What has the last year been like at Cineplex?

Overall, we're quite pleased. Revenue was flat, but in all honesty EBITDA was up and that's what most people are interested in. There were a lot of good things -we signed digital agreements and our theatres are 66 done. That will be 100 per cent digital by June. We'll be one of the first large distributors to finish.

And you have to remember we are coming off a record year. We didn't have one big movie last year like Avatar.

What about the big jump in advertising revenue?

We certainly ended with a bang. We are very pleased with the fact that automotive and telecom players are back.

What do movie theatres look like five years from now?

You'll continue to see innovation. I think you'll see more VIP services, more higher-level opportunities for the guests.

We need to keep making sure the experience is above what anyone can do at home. In reality, we have 50-foot screens. And most lots in Toronto aren't even than big.

So we do have a better experience.

It was a record year for concessions. Are you just charging more for popcorn?

We like to grow the business through efficiency. So as part of that in the concessions are now based on zoning. That's trying to speed the lineups up by ensuring the attendants don't have to move more than X number of steps to serve.

One of the biggest turnoffs is a big line. People won't wait. So we started zoning two years ago and we're seeing results.

Your Ultraviolet service may be done by the end of the year. It allows people to download relatively new movies and share them among 11 devices. Are you worried about streaming services like Netflix? And Redbox just said they'll start opening DVD kiosks in Canada?

We have some technology issues, but pretty much should be ready by the end of the year. You'll be able to watch while you wait for your plane, at home, wherever. You'll have the product everyone.

As for Redbox, it is only a transitional business. Why would you want to run to the grocery store to rent a movie?

There's a real opportunity [for Ultraviolet], look at how many Blockbuster stores are gone. There's a vacuum in the industry. We have the loyalty programs to make it work.

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