In early 2020, I sat down with Tim Richards, the founder and CEO of Vue International, to plan a dinner for hospitality and leisure CEOs on the topic of “Responses to Disruption”. We scheduled the event for May 2020 – little did we know how much disruption was about to be unleashed on the world!
Last week, just before the BFI London Film Festival commenced, it was a real privilege to host the rescheduled dinner. More than twenty industry leaders – from across hospitality, leisure and the adjacent consumer sectors – joined us to hear Tim’s insights into the cinema sector, resilience, taking advantage of new technologies, and why businesses need to continually self-disrupt in order to meet ever-changing customer requirements.
From a family of entrepreneurs, Tim started his career as a Wall Street lawyer before entering the entertainment industry with Warner Bros Studios. In 1999, he gave up the security of his executive role to launch a start-up cinema exhibition company, which became Vue Entertainment in 2003 after its purchase of Warner Village Cinemas’ 36 UK sites. Reflecting on those early years of Vue, Tim outlined the importance of creating the right team: “Most of all, it was a lesson in people… I had to convince my team to leave some pretty serious jobs to join me at a startup operating out of a garage. Many of the people who took that risk are still with me today.”
Fast-forward to today, subsequent acquisitions have included the UK’s Apollo Cinemas, CinemaxX in Germany, Multikino in Poland, The Space in Italy, JT Bioscopen in the Netherlands and Ireland’s Showtime Cinema. Now with more than 227 sites, 1,990 screens, 8,500 staff, and attracting over 97 million customers a year, Vue is one of the world’s leading cinema companies.
Much of the business’s success can be put down to Tim’s relentless focus on innovation and reinvention.
“I always wanted to change how people felt about going to the cinema,” he told us. “I wanted people to think of our cinemas not just as cinemas, but as entertainment centres, in amazing, strategic, locations. Becoming true entertainment centres really forced us to think about our proposition – and how we continue to delight audiences.”
“I wanted people to think of our cinemas not just as cinemas, but as entertainment centres, in amazing, strategic, locations. Becoming true entertainment centres really forced us to think about our proposition – and how we continue to delight audiences.”
To do this, the business has harnessed technology, bringing in sector-leading AI to predict regional popularity of films. Vue can now maximise scheduling opportunities, showing more diverse content and for longer, and now uses variable pricing to drive sales.
Most of all, Tim has never been afraid to try out new ideas. “For every new concept that the consumer sees, there are a dozen that haven’t worked out,” said Tim. “We’ve tried beanbags, love seats, in-seat dining options – but at scale, none of them really worked for our audiences. Then we came up with our recliner seats, and they’ve been a game changer.” Indeed, pre-pandemic, Vue was midway through rolling out recliner seats as a premium customer proposition across its estate.
Perhaps most excitingly, Vue has taken serious risks to push the boundaries of cinema away from just traditional movies into music, sports, and entertainment. It first pioneered this with nascent technology back in 2007, when Vue streamed the ‘final’ Genesis concert, taking place in Germany, live to UK cinemas.
“No-one had ever done anything like this globally before,” Tim explained. “We were getting the sound and visuals mixed separately from Germany, and then sending them by satellite to 44 UK locations. Our Leicester Square site was packed with the band’s family, friends, music editors, industry leaders. To say I was nervous was an understatement.”
Despite investing in the best available satellite technology, an ill-timed electrical storm resulted in the cinemas losing signal for a few seconds. “It was mid-way through Phil Collins’ drum solo,” recalled Tim, “and obviously I wanted to slide under my chair and for the ground to swallow me up. But the response from fans the next day was completely positive… it proved it was live!”
Clearly, Vue’s risk paid off, and from there the business moved into live opera, theatre, ballet, tennis and football – reimagining what’s possible for cinema businesses. I asked Tim what’s next. “Gaming,” he said, without missing a beat. “We haven’t quite nailed it yet but the prospect of giving a gamer a 70-foot screen is hugely exciting.”
It was, of course, impossible not to discuss the pandemic. As an industry built on tightly-packed enclosed spaces, Covid’s impact on cinema was perhaps even greater than on other adjacent leisure and hospitality sectors – especially considering that films were not being released, or even made during the period. Without new content, reopening cinemas has been slow and painful. This is particularly true of Vue, which has the added complexity of a vast geographic reach. Tim tells us that the company was navigating local restrictions in some places until just a few months ago.
“2018 was the best year for cinema in over 50 years with worldwide box office sales nearly reaching $50bn – and we were rolling out brilliant initiatives and breaking records including our biggest trading period in company history. And then suddenly we’d closed every cinema across nine countries. Every morning, it felt like we were waking up, putting on body armour, and going to battle.”
“It was particularly frustrating because 2019 and early 2020 had been so strong for us,” Tim said. “2018 was the best year for cinema in over 50 years with worldwide box office sales nearly reaching $50bn – and we were rolling out brilliant initiatives and breaking records including our biggest trading period in company history. And then suddenly we’d closed every cinema across nine countries. Every morning, it felt like we were waking up, putting on body armour, and going to battle.”
Tim tells us that his first priority was staff. “I wanted to save every one of our employees, or at least give them the option to stay with us. And then it was about dealing with suppliers, landlords and shareholders. It was incredibly intense.”
Vue used the period of closures to invest in its estate, ensuring that customers felt the difference after two years of watching films at home. The business added recliner seats to several existing cinemas, developed new sites in the UK, Netherlands and Poland, as well as implementing new technologies to improve the customer journey.
Tim is unwaveringly positive about the future of cinema. After two years of unprecedented challenge through the pandemic, with a limited pipeline of new movies, and the perceived competition from at-home streaming services, Tim is certain that the resurgence of the cinema sector will continue: “When you sit at the back of a packed auditorium, and feel the audience’s reaction to a film on the big screen, it’s clear that this is something special. A huge screen with incredible sound wins hands down.”
Indeed, audiences are already returning to the cinema in droves. In the past twelve months we’ve seen two of the top four biggest films in UK history: No Time to Die and Spiderman: No Way Home. Top Gun: Maverick brought in nearly $1.5bn at the box office, becoming the highest-grossing film of 2022. And Kenneth Brannagh’s Belfast, documenting his childhood and The Troubles, surpassed Shindler’s List to become the most successful black-and-white film of the modern era.
“Post-pandemic recovery at Vue has been strong,” said Tim. “At the end of July, we saw a post-Covid high at the box office, with audiences returning across all demographics. Older audiences had been slower to return, but Top Gun: Maverick and Elvis brought them back.”
Tim hints at an extremely strong slate of films for the next few years, with highlights including a groundbreaking new Avatar movie, which has been over 10 years in the making, and the first cinematic releases scheduled from the likes of Netflix, Amazon and Apple – who had previously only released direct to streaming.
“There is just immense power in the big screen. Success at the box office will lead to commercial success overall for a film. I am very excited about working more closely with the streaming companies in the future.”
With such a strong pipeline of films planned for release in 2023, and continued innovation in areas like gaming, live events and the proposition, the future of cinema looks bright!