Everyone is waiting for the movie screen to light up. The previews have finally come to an end. People silence their cell phones and unwrap their candy while a few stragglers find their seats. As the lights overhead dim, the crowd quiets down, and the film begins. This is a typical night at the movies. And on one of these nights, Gerardo “Gerry” Lopez, CEO and president of AMC Entertainment Inc., might be one of the many movie watchers.
As the head of the second largest movie-theater chain in the United States, Lopez has to know more than what’s flashing on the marquee or the stars in the latest blockbuster. He must understand what drives people to the cinema before they even step inside. “For years, the movie exhibition business has been a fairly straightforward operation,” Lopez says. “Lately though, as the opportunities for leisure time and the opportunities for entertainment have multiplied, the notion of ‘building a [movie] theater and they will come’ falls short.”
Lopez admits, however, there hasn’t been much innovation among movie exhibition until recently. So, in addition to the newest movie release, what else can the cinema offer? Entertainment marketers and movie houses alike must answer why consumers should buy what they’re selling. In order to compete, Lopez is looking to build a much richer customer experience to outpace the Hulus and Redboxes of the world. “You have to start thinking … what is going to the movies really about?” he says.
An Industry In Flux
As a middle-school kid, Lopez was already a dedicated movie lover. He fondly recalls asking his mother, on numerous occasions, for money so he could catch the latest movie at The Regency in San Juan, Puerto Rico. Lopez was only 11 or 12 at the time but the actual experience of going to the theater is what he remembers most—purchasing his ticket, walking through the theater’s lobby, the large silver screen, and the smell of popcorn in the air. For Lopez, there was an inherent thrill in it all, one that he believes still exists.
March 2012 marks Lopez’s three-year anniversary serving as AMC’s chief executive. Since that time, a number of things have changed in the industry such as the introduction of 3-D films. The digitization of films, which enables 3-D and other advancements in projections, has accelerated in the past two years—a strategic move spearheaded by Lopez. “Now it is not unusual for a movie to do 50 percent of its business in 3-D in a given weekend,” he says. “And in some cases, studios have raked in 90-95 percent of its ticket sales from 3-D movies.”
Among the changes in the industry, Lopez has launched several strategies to keep moviegoers satisfied. Part of his approach is enhancing “the big sound and the big screen” quality of AMC cinemas by installing a proprietary large-format screen concept, called ETX, and adding more IMAX venues than AMC’s top two competitors. Secondly, AMC is adding dining venues within its cinemas. Guests who want to enjoy “a dinner and a movie” can do so in one location and add more convenience to their leisure time. “Moviegoing is woven into the social fabric of this country,” Lopez says. “There is something special about going to the movies with other people, about watching something on a big screen in a dark auditorium with a room full of strangers who can have a collective, communal experience. That social element is misunderstood and underestimated.” Redefining the special, social element, and delivering it to moviegoers, is a part of Lopez’s mission.
But now the social fabric of America is more like a megabyte in a supercomputer than threads in a quilt. For some, meeting up at a physical hangout spot is as old-fashioned as a jukebox. Instead, any cell phone-equipped person can link up on Twitter, Foursquare, or Facebook without seeing the other face-to-face. However, Lopez believes that social media is not a threat. “If anything, social media will enhance the role that movies play. We are using them as a tool to drive the relevance of the moviegoing experience,” he says.
One foreseeable hurdle for AMC is building a bridge between the social aspect of moviegoing and social media. To create that bridge, Lopez knew integrating social-media platforms into AMC Stubs, the company’s new rewards program, was essential. “One of the key components of AMC Stubs is its integration with Facebook because that is the way people share experiences,” Lopez says. AMC Stubs is a big step for the company and one of the first of its kind for movie theaters, offering members a $10 reward for every $100 they spend at the theater, free upgrades on concession items, fees waived on online ticket purchases, and access to a personal online ticket-stub collection. Once AMC Stubs members finish watching a movie, they can post a Facebook status about their experiences.
Sharing these experiences online pushes AMC into a new direction, one that is totally different from what Lopez first experienced years ago as a young moviegoer. However, connecting with consumers in multiple ways, both in person and virtually, will drive AMC to the next level. “At AMC, we are enabling people to share their experiences easily and quickly,” he says. “We think this will be a part of the moviegoing experience of the future.”