Last July, Eduardo Acuña took the helm of Cineworld as it emerged from bankruptcy. Talk to Screen about its future.
Nine months after joining Cineworld as CEO, Eduardo Acuña is optimistic about the long-term prospects of the cinema operator. The organization currently operates in 10 countries with 751 locations and 9,189 screens and, like other major film companies, has navigated a tumultuous era in which it was Covid. The affable Acuña took the reins last July after serving as president of Cinepolis Americas (overseeing operations in 11 countries in North and South America). He’s confident that Cineworld Group, which emerged from Chapter 11 bankruptcy coverage last summer, is now well-positioned to thrive. The country has “one of the healthiest balance sheets in the industry” and “the point of indebtedness was particularly reduced” under Chapter 11 in the United States, he said.
A Mexican-born Acuña joined the company with the goal of fostering stability when veteran Israeli exhibition director Mooky Greidinger and his brother Israel resigned from Cineworld last summer after nearly a decade at the helm of the company. “I wouldn’t say it’s a significant number,” Acuña says. “I didn’t come here to fire everybody. There were cases where adjustments had to be made, but they were very, very few.
Acuña arrives as a business leader widely praised for his work at Cinépolis, which began as a Mexican family-owned cinema 50 years ago but has grown rapidly. He has held positions at McKinsey in Mexico and Argentina, Goldman Sachs in New York, the Bank of Mexico and the Ministry of Social Development of Mexico. He earned his MBA from Harvard Business School.
Speaking to Screen International from the U. S. headquarters in Knoxville, Tennessee, Cineworld’s new CEO says his taste for control is “open and accessible and, above all, tells the truth. “
What was it like arriving last July and what was the atmosphere like?I think it was very positive. It was clear that people were very concerned about what the long term would hold for the company. They were coming out of a very traumatic experience. It was Covid and the company had to file for Chapter 11 in the United States. My first day on the project was the day we came out of bankruptcy. It was my welcome to the company. The first thing I did was [organize] a big town hall assembly and a Zoom call with all the theater administrators and painters from aid workplaces in the U. S. The U. S. , the U. K. , and the rest of Central and Eastern Europe and Israel. I told them that my vision was to put the visitor at the center of everything. I sought to communicate with everyone and make myself accessible. I gave my email to everyone. My first day of painting was right after the “Barbenheimer” weekend, so of course I took the opportunity to take full responsibility for this wonderful success.
Other exhibitors warn that in the wake of the Hollywood strikes, the 2024-film roster is a bit sparse. Do you agree? I’m sure of 202four. Will 202four be the same as 2023?This is probably not the case. But there are things that surprise us. Dune: Part 2 has performed particularly well and Kung Fu Panda 4 is doing very well. We’re seeing better-than-expected numbers. The end of the year is shaping up pretty well. If you think about it, it looks like there’s a bit of a crowd. It’s a big challenge. Between the challenge of not having videos or having too many videos piling up on dates, I’d prefer the latter.
So, could we get back to pre-pandemic levels?One of the things I don’t appreciate about our industry is that we’re looking to compare ourselves to 2019 and if we don’t get there, then there’s this narrative that we didn’t get there. Comparing yourself to a record year is probably not the healthiest. I would say we’re on a very healthy road to recovery. We had a big challenge with the actors’ and writers’ strikes. There’s no denying it. But I must look at this as a setback and not a narrative that our industry is suffering.
The measures have had an effect on our industry that will likely make 2024 worse than 2023, but that doesn’t mean it’s going to be bad or that we’re going to lose coins in our budget. No way. In fact, we’re going to have a smart, financially healthy year, with a very smart EBITDA margin and a positive coin flow.
Are you worried about the next knowledge of the list among moviegoers?Do studios spend enough to market their films?I’d be afraid to say they don’t offer the help they need in the market. I’d like them to spend more money. But we’ve also cooperated with the studios to market their films as much as possible with the resources we have. There’s no doubt that the more you market a film, the better the performance. But I would say that the challenge is greater the quantity. of movies.
And what about the film showcase? The studios have this data, we have this data: the larger the exhibition of the cinema, the greater the earning potential of the film. It’s not just words. You can see this in several studies. More importantly, it shows in the custom of studies. You can see that there are videos that in the future would have been aired before, but haven’t been aired yet. You will see that videos that may have had a very short period of less than forty-five days [now] last longer than forty-five days.
The Covid pandemic provided the best time for all this experimentation and the window dropped to 0 with the closure of venues. Then you experienced the day and the date, 17 days, 30 days, forty-five days, and now you see the window. overlook.
Will you bet on streamer movies? If we are presented with a name from any day and date with streaming, I don’t think we’re going to reproduce it because I don’t think it will do anyone any good. Are we playing for streamer names with shorter windows?I don’t know. It’s part of the dynamics of our industry. Our industry used to have a long window of theatrical exclusivity and then the terms were negotiated with the studios. Well, maybe the window deserves to be part of the terms. If someone says, “Well, I’m a streamer, I really want this movie to be exclusively in theaters for a very short period of time and then I want to release it on my platform,” that means the conditions of their movie will change significantly. of a movie with a long movie window. We are categorized as enemies, movie theaters and transmitters. I don’t think that’s the case. We complement each other.
What is the optimal window from your point of view?I would say the minimum is forty-five days, but it’s a minimum. This is not ideal. I can’t give you an actual number, but you see if the theatrical exclusivity window is bigger, the movie works better in theaters, and then it works better in streaming and the other windows.
What worries you most about current business practices?It’s if we made a mistake and taught our consumers that if they didn’t go to the theater to see a movie, the movie would be on TV very soon. It’s very unlikely that they’ll see it through analysis, however, it’s one of my concerns. All those experiments were positioned after Covid and the theatrical window was narrowed. The more we teach our customers that if you don’t see it in theaters, it will take you a long time to see it. At home, it will be our butts and those of the studios.
Is Cineworld cutting the length of some of its biggest theaters, cutting screens, and putting more emphasis on Imax and 4DX?We have to do our best to supply the most productive product to each and every customer, to the best of our ability. There is no one-size-fits-all answer. There are movies that Imax is for – you saw it with Dune: Part Two. Imax presentations have far surpassed all other presentations. We’ve had amazing effects. It’s a top-productivity film for Imax. There are other movies that outperform 4DX. We’ve had wonderful effects with 4DX and a few weeks ago we opened the world’s largest 4DX auditorium in Times Square. We’ve also noticed wonderful effects when you have recliners and very comfortable seats.
His predecessor, Mookie Greidinger, wasn’t a fan of reclining seats, but is it true that he’s installing them in more places?I’m not saying I’m installing them everywhere. I say let’s analyze each site. The first thing I told them is that we pay attention to our consumers. Our consumers say they need comfortable seats, and our consumers vote with their wallets. We find it when we don’t have recliners and our competition If we do, we lose market share in a matter of weeks. On the other hand, when there are big movies like Dune: Part Two or with Barbenheimer, we have the most capacity [without recliners] and our market share skyrockets. I am not in favour of a one-size-fits-all solution. [But] I will tell you that we’re probably going to make a lot more recliners than we used to, because our consumers tell us out loud and transparent that this is what they need.
Is it easy to convert old buildings to the big screen format, or even for other purposes?I’m going to tell you what my structures team told me. Anything can be done. In fact, we’re in the process of looking at that. There are sites that can have too many screens and we don’t have a lot of videos anymore. We have sites with 26 screens. Do consumers really want 26 screens? Sometimes it’s smart because you can play a lot of videos for longer, but it’s not.
So we’re looking at the option for those gigantic sites to turn some of those screens into something else. You’ll have noticed everything in the industry: bowling alleys, arcades, punch throwing. I think the last time I saw him other people setting up pickleball courts in a theater.
So, are punch tossing and pickleball the order of the day at Cineworld?We can [install them]. If we find a concept that we are in, that offers a smart return on investment and is the best position to invest our money, we can invest our money in it.
As healthy as our balance sheet is right now, we still have a limited amount of cash at our disposal. There’s a lot of maintenance: a lot of cinemas that are older in our portfolio lately and we want to give them a little TLC. is switching to recliners, our projection, sound, or HVAC [heating, ventilation, and air conditioning] units, those are probably investments that will pay off big.
If we locate a site where we think it would be better to check out the concept of doing anything else (throwing punches or pickleball), we will definitely check it out.
There are rumours in the market that Cineworld UK would return the sites to the owners and negotiate the termination of the leases. Are they downsizing in the UK?There is a preference for not only Cineworld UK, but also each of our markets. , a more successful market. The UK has not had the advantages of going through Chapter 11 and reducing rents as much as we have in the US. We are based in the U. S. , but we have constant conversations with our owners to make sure our business is successful. In some areas, we have high rents that we want to communicate with our landlords about and negotiate with them.
I wouldn’t say there’s a preference for reducing the length of the circuit. There are, of course, rentals that naturally sell out. With them, if the land is unsuccessful or if the rent is too high and we can’t get an agreement with the landlord, yes, the lease expires, we return the construction to the landlord and move on. There are many places, but few places where this has happened.
Are you making plans to price costs or adopt a dynamic pricing model?He has been quoted as saying that in some markets, if costs are reduced, you may simply “get more footfall. “Which markets are involved? My philosophy when it comes to pricing is that we want to get it right and do more analysis.
For a long time, cinemas haven’t been complicated in terms of pricing strategies. We want to determine what the elasticity of our value is. Different markets have other elasticities of value. When I talk about markets, I don’t mean countries. This means a micro-market that doesn’t even correspond to a city, but to a neighborhood. There are certain neighborhoods where you can rate anything and other people will pass by. Instead, there are neighborhoods where a circle of 4 relatives probably wouldn’t pass for watching a movie with relatives unless its price is affordable.
What I mean is that I don’t lower or increase values. I think it’s vital to look at the values and have the right values for the market. We conduct in-depth value research and in-depth research into our rates at the cinema.
Do some cinemas promote shorts with costs that are too low? I believe that our product is a valuable product and that we deserve to rate it enough for the service we provide. While I think in some markets we’re expensive, I also think we’re careful not to jeopardize the suitability of our business with too low costs or overly competitive promotions that may simply disrupt our business. We can [take a risk] to convince our consumers that cinema is an incredibly reasonable proposition and once we [don’t]] go back to the same old costs, we can’t anymore.
Does this benefit subscription systems like Cineworld Unlimited?The subscription comes at a cost when a visitor goes to see a movie they otherwise wouldn’t have gone to see. There is a set of averages, which are rarely very high. If there’s a visitor who goes there every week, we lose cash. That visitor. . . If there’s a visitor who goes there 25 times a year, we still make money from that visitor. This visitor goes there more than they otherwise would. But it is very vital to succeed in the satisfied medium when the value is neither too low nor too high and the number of visits is, on average, correct. We continue to explore it.
Can you tell us a little bit about your data usage? In this company, we are going through what I like to call a virtual transformation, and it is one of my top sensible priorities. One of the most sensible destinations in our capital is technology. With technology, we’re going to do a number of things. The first is to make our visitors’ experience as seamless as possible. If our visitor needs to buy a price ticket on the app, make it as productive and user-friendly as possible. If you need to buy it from the web, it has to be the most productive and user-friendly website. If you want to buy it at the movie kiosk, this will be the most productive experience. You will be able to buy a ticket at a good price anywhere. Technology helps us reduce queues and make the experience as seamless as possible.
On the other hand, all consumers who employ our generation also deserve to allow us to see the information they like and then keep them coming back. Without violating any privacy laws, if consumers want to tell us they like a certain type of movie or food, we deserve to be able to serve those consumers and revamp our loyalty systems to offer exclusive experiences for each customer.
What about Picturehouse in the UK?My projects for Picturehouse are exactly the same as my projects for Regal in the US. Cineworld in the U. K. or Cinema City in Central and Eastern Europe or Planet in Israel – to make it the most successful business we can do. I can do it.
But if you were offered a lot of cash for Picturehouse, would you sell it?I wouldn’t say it’s for sale, but if someone offered us a lot of cash for any component of our circuit, we’d definitely accept anything, not just Picturehouse. . . . [Yet] none of our tours are for sale. I would like to emphasize this strongly.
Let me answer this query in another way. Picturehouse has been one of the brightest options in our business over the past few months. Just as the writers’ and actors’ moves arrived, the company’s distribution arm, Picturehouse Entertainment, was very nimble and came out with Scrapper in August on a date in the afterlife busy with another film and we did a job. When Dune: Part Two moved from November last year, that’s when distributor Lionsgate UK and his spouse Picturehouse released Anatomy Of A Fall and they did. one work, raising £2 million ($2. 5 million).
In January and February, which were difficult months for the industry, Picturehouse had two of the months in its history. The demanding situations for Picturehouse are more on the advertising and food side. With Picturehouse, we have an exclusive price proposition where we all sell all kinds of food and beverage products. We want to run it more like a restaurant.
Do you agree that audiences are tired of superheroes?I don’t think so. If you make a smart movie, other people will come to see it. Frankly, I think Deadpool
Are local-language films becoming increasingly important for your foreign cinemas?No doubt. They play a basic role. I can tell you that last year our box office in Romania was higher than in 2019 thanks to the local product. In Poland, in 2024, we have budgeted for an expansion and this is due to the local product. It’s similar to what we’re looking for. to do with content of choice. Alternative content is anything that we give a lot of importance to because it’s true that we have fewer videos than before.
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