India Innovator: Cinépolis India revolutionizes a nation’s moviegoing

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Cinemas Features

One of the most surprising cinema business ventures of the past decade was the creation of Cinépolis India, the India subsidiary of Cinépolis, the number-one theatre circuit in Mexico and the fourth-largest chain in the world. Since its founding in 2009 with a theatre in Amritsar, Cinépolis India has become the fastest-growing multiplex circuit in that country; in six short years, it has blossomed to an astonishing 217 all-digital stadium-seating screens.

For its role in bringing the modern digital-cinema experience to India, the Indian circuit will be honored with the DLP Cinema® Marketing Achievement Award at CineAsia 2015. Javier Sotomayor, managing director of Cinépolis India, will accept the prize.

In an exclusive e-mail exchange with Film Journal International, Sotomayor describes the genesis of Cinépolis India and the risks and rewards involved.

“Cinépolis started expanding its operations to international markets in 2003,” he recalls. “We started with Central America, due to its proximity, and soon became market leaders there, as the overall market was small. As a result, we started looking at other markets which had a bigger potential. Coincidentally, during the same time one of the executives of the company went to Stanford for an MBA and developed a business plan to expand to India along with two of his Indian classmates. It was then that we realized the kind of potential that is there in this country and it made sense financially to invest in India.

“As this market was completely new to us,” Sotomayor continues, “a team of executives was sent to India for six months to validate theinvestment thesis done in the business plan as well as the potential growth pace. This team traveled to all the major cities and met the right people including major developers, distributors, etc. This helped us get a lot of insights about the market, especially the market size and the growth potential.”

Sotomayor says that his company’s biggest challenge at the time was that “Cinépolis had almost no brand recognition in this part of the world. Since we are in a business where we have an interdependency with the malls, it was important for us to develop long-term partnerships with developers in order to create an environment of trust. Since no one knew about the brand at that point of time, it took us a lot of effort to make our mark—and we have been successful in doing that. The other major challenge we faced was understanding the preferences of the Indian audience. Each state in India is like a different country, the tastes and preferences of people are different. It has been a great learning curve and we have evolved as a brand.”

Sotomayor believes that Mexico and India have commonalities along with their differences. “Geographically, India is exactly at the opposite end of the globe compared to Mexico. India is a land of diversity; there are hundreds of languages and dialects that people speak around the country. They follow different religions and have absolutely different food preferences. There is something very unique about India which we have not seen anywhere else. However, both countries have a family-oriented culture where family values and systems form an integral part of the lifestyle of people. Also, spicy food is preferred in both countries. So, yes, there are a lot of differences in the culture between the two countries, but at the same time there are many similarities as well.”

In a short amount of time, Cinépolis India has had a huge impact on the moviegoing experience in India. “We introduced India to the concept of megaplexes by opening our first 15-screen megaplex in Pune. We also introduced India to newer technologies like 4DX [motion seats and sensory stimulation] in our second megaplex in Mumbai—it is the only 4DX screen that operates in the country. Cinépolis also has its in-house coffee shop called Coffee Tree which serves freshly prepared food. We have seen an increasing demand for freshly prepared food in cinemas in India.”

Sotomayor believes that “the expectations of Indian moviegoers have been evolving continuously. Technology is playing a major role in driving this change. Today, moviegoers want ticketless entry, to order food from an app and get it delivered to their seats, cashless payments, etc. You know you are improving on your product and services when your customers start getting more demanding. As a brand, we are tracking these demands continuously and promise to cater to them with a better product and service.”

After growing organically in its first five years, last year Cinépolis expanded dramatically with the acquisition of 83 screens from Fun Cinemas, which retain that brand name. “The Fun Cinemas deal helped us increase our footprint in the Indian market, especially in the northern part,” Sotomayor notes. “We are now considered a serious pan-India player, which has helped us create synergies and economies of scale.”

Sotomayor feels the merger has gone smoothly. “In any M&A [deal], integration of the two companies plays a pivotal role—it is something that can make or break the deal. Integration is important not only at the operational level but also at the cultural level. The team has done a great job to date and has been successful in tackling each challenge that has come their way.”

From the beginning, Cinépolis has sought to bring the same high caliber of its Mexican and Latin American locations to its Indian operations. “One-hundred percent of our locations are new builds,” Sotomayor clarifies. “As a part of the process, we have certain standards defined at a global level which have to be maintained in order to provide our customers with the best possible experience. Having an experience of more than 40 years in this industry, Cinépolis has successfully implemented the best practices in each of the territories it operates in. In Fun Cinemas as well, one-hundred percent of our locations were originally new builds.”

Parent company Cinépolis is a pioneer of the concept of premium and luxury movie theatres via its Cinépolis VIP brand and is the largest operator of luxury cinemas in the world. The Indian subsidiary operates three Cinépolis VIP multiplexes with 10 screens total in Mumbai, Pune and Kochi. In addition, the circuit has one VIPscreen each at Cinépolis Mangalore, Fun Cinemas Bhopal and Fun Cinemas Amritsar. In theatres branded Cinépolis VIP, all the seats are luxury recliners. “Besides that,” Sotomayor adds, “in some of the other locations we have included a couple of rows with recliners to offer a better experience to this segment of the market.”

Cinépolis India also operates one IMAX screen in Viviana Mall in Mumbai, and is now doing pilot testing of Dolby Atmos immersive audio in a number of cinemas. Laser projection is also “under consideration,” Sotomayor says.

Booking films in a market as diverse as India is a challenge, the managing director admits.“In terms of programming, India is one of the most difficult markets. We get to learn from programming insights every day. Since movie preferences vary a lot from region to region, there is no one popular type or genre we could talk about. In the northern region Punjabi movies do well, while in the southern belt Tamil, Telugu and Malayalam movies have a huge fan following. There have been clear indications of better acceptance of regional and contemporary niche movies in the India market.” Sotomayor estimates that his circuit’s programming comprises 60% Bollywood features, 20% regional fare and 20% Hollywood movies.

As for more specialized films, “Cinépolis believes in catering to every segment in the target market,” Sotomayor attests. “Cinépolis has been associated with various film festival organizations like Jagran, Enlighten (world cinemas), Alliance de Francais (Ahmedabad) and Aries Telecasting Private Limited (Kochi Film Festival). The content shown in such festivals attracts a niche crowd to Cinépolis. The most popular offering has been the Jagran Film festival, which we organized in four cities this year: Mumbai, Patna, Lucknow and Ludhiana.”

Bolstering Cinépolis India’s own popularity is its loyalty program, Club Cinépolis, which has around 300,000members in India. “It is the most successful loyalty program in the industry,” Sotomayor declares. “Cinépolis is present on almost all social-networking platforms. We have around 480,000 fans on Facebook alone. Cinépolis as a brand wants to be in touch with its patrons and understand their needs and preferences. We have seen an engagement of 2.5%, which is the highest in the industry.”

Sotomayor has been with the Cinépolis organization for 13 years, and has worked in Mexico, Central America and India. He was part of the initial team of Cinépolis India and has been part of the board of directors since the India venture was conceived in 2007. Sotomayor was in charge of the first international expansion of Cinépolis to Central America in 2003 and has occupied various positions at a global level, including marketing and business development. He created and led Cinépolis’ low-budget cinema concept in Mexico, which accounts for more than 300 screens.

Altogether, Cinépolis operates more than 465 multiplexes with over 4,300 screens in 13 countries and serves more than 200 million patrons annually. Cinépolis India currently has a presence in Delhi, Mumbai, Bengaluru, Hyderabad, Ahmedabad, Pune, Chandigarh, Lucknow, Surat, Jaipur, Bhopal, Patna, Thane, Vijayawada, Vadodara, Amritsar, Ludhiana, Bhatinda, Ambala, Panipat, Ghaziabad, Mangalore, Hubli, Kota, Gwalior, Coimbatore, Khanna, Dibrugarh, Guwahati, Ghaziabad and Ranchi. The company has set a goal of 400 screens in India by 2017.

The Rise of Cinépolis India

2007: Business plan prepared for India. Team is sent to India to validate investment thesis.

2008: Revised business plan presented to board; investment in India is approved.

2009: First Cinépolis multiplex launches at Celebration Mall, Amritsar (four screens).

2011: Cinépolis opens in Ahmedabad and Surat.

2012: Cinépolis closes the year with 53 screens across India.

November 2013: Cinépolis opens India’s biggest multiplex at Season Mall, Pune, with 15 screens. With this launch, Cinépolis also introduces Cinépolis VIP screens in India.

December 2013: By the end of 2013, Cinépolis is operational in 14 cities across India with 84 screens.

November 2014: Cinépolis opens the most technologically advanced multiplex in India, with a 4DX screen, an IMAX screen and Dolby Atmos sound technology, at Viviana Mall, Thane.

November 2014: Cinépolis acquires 83 screens of Fun Cinemas.

June 2015: Cinépolis India reaches a milestone of 200 screens with the launch of an eight-screen multiplex at ETA Namma Mall, Bengaluru.