The XD Factor: Mark Zoradi takes helm at global exhibition giant Cinemark
“Cinemark is very committed to the customer experience and we are in the theatrical exhibition business for the long haul,” affirms Mark Zoradi, chief executive officer of Cinemark Holdings, Inc. “We believe that it is a really good business, as evidenced by our continued profitability. We do not have the most theatres or the most screens, but we have the highest attendance of any other major chain out there and that is because we are doing business in both North and South America. We are committed to this business on a worldwide basis.”
At the end of August 2015, Cinemark named Zoradi, who had been serving on the company board as a director, to succeed Tim Warner as chief executive officer. After a nearly 20-year career at Cinemark and more than a 50 years in the movie theatre business, Warner was elected Cinemark’s executive vice-chairman, providing consulting services and helping with the transition. (See also our conversation about the Digital Cinema Distribution Coalition.) “Tim Warner is one of the great leaders of our industry,” chairman of the board Lee Roy Mitchell noted at that time. “We are grateful for his dedication to our company, as well as his significant contributions to both Cinemark and the global exhibition industry.”
Mark Zoradi is equally grateful and applauds Warner and Mitchell for their accomplishments. As a board member, “I knew they are great exhibitors and that Cinemark is a great company, doing well. I chose to move from Los Angeles to Texas and take this position [where] I have the opportunity to fine-tune things and continue to operate at a high level and to grow the company.”
Film Journal International caught up with Zoradi–two days before magazine deadline–upon returning from his trip to “get updated on the business” at Cinemark’s impressive holdings across Latin America. “We do operate in 14 countries and have fantastic teams there. Our largest markets are Brazil and Argentina, Colombia,” he reminds us. “A little over 25% of our business comes from Latin America, which clearly continues to represent growth opportunity even in the midst of the economic headwinds that you have down there. People are still going to movies because it is an affordable way for people to get out of the house. So it is a good business, and we will continue to grow and expand our theatre and screen count throughout Latin America.”
What about here in North America? Is there room for more theatres—outside the great state of Texas, of course? “Well,” Zoradi chuckles at our gibe at the Lone Star State, “we continue to grow our circuit, that’s for sure.” Cinemark is looking for “tuck-in acquisitions here and there. While there are not that many coming up in the marketplace, we are certainly open to acquisitions of regional circuits as well in the U.S.” Zoradi mentions the purchase of Rave Cinemas while he was on the board there as one example. Then and now, “we are still looking for opportunities for new theatres in Texas, in Utah, in Colorado and in California. This is all about finding the right location with the right developer and building a theatre that is going to be able to return an acceptable profit.”
As of Sept. 20, 2015, Cinemark’s holdings encompassed 507 theatres and 5,746 screens. In the U.S., Cinemark is the third-largest circuit with 334 theatres and 4,489 screens in 41 states and ranked either number one or number two by box-office revenue in 23 of the top 30 U.S. markets at the end of 2014.As “the most geographically diverse circuit in Latin America,” its 173 theatres and 1,257 screens are represented in 12 of the top 15 metropolitan areas in South America.
“Internationally, we will continue to look throughout Latin America. We are not done there,” Zoradi says, confirming additional screens for markets that Cinemark is already operating in. “And we’ll continue in other parts of the world too, as opportunities present themselves. Cinemark is a global exhibition company. As opportunities present themselves in the U.S., in Latin America, and other parts of the world, we are going to look at them very, very carefully. There is really not a hands-off place–other than a few places in the world that are difficult to do business in. We probably would not be looking there, but generally we are a worldwide exhibitor.”
Has his experience as an international distributor at Disney and DreamWorks come in handy? “It already has, because I know a lot of the players,” Zoradi confirms. “I am familiar with the territories and with the unique ways the business works. In the U.S. it is conducted one way, and it’s a great way. But business is modified–and done equally well–in the 100-plus territories around the world. It’s just a little bit different, but the basic concepts are the same. From that, I think I have an appreciation for doing international business and that represents an advantage for Cinemark.”
While he spearheaded a massive expansion of film distribution around the globe, theatres opened at a rapid pace as well. Which side can take credit for the resulting boost to box-office returns? “Honestly, that was hand-in-glove,” he responds, positing that exhibition and distribution have equal share in the success. “We were putting together our Latin America offices at Disney at the same time that Cinemark and others, local players and international players, were starting to build theatres. And you can’t grow the business without both.”
Another aspect of the hand-in-glove fit was what exhibitors were actually building, he adds. “You’d go into the malls and into the theatres and you could have been anywhere in the U.S. They are equal quality…modern theatres with great screens, great sound, great concessions, really clean operations.”
Thankfully, our industry has reached that point where guests can expect all this–and more–when they go to the movies, and no matter where. How does Cinemark differentiate itself from the competition? “Well, I hesitate to say this sets us apart,” Zoradi advises. “But let me just say that a tremendous focus of ours is on creating loyal customers. Once we have a theatre up and running, we look and pay extreme attention to the customer experience, and that begins when guests first walk in the door, with somebody smiling at you and greeting you. Is the place really clean and are the lines short? Is the popcorn fresh?”
Once they walk inside, Zoradi wants moviegoers to enjoy floor-to-ceiling and wall-to-wall screens, with great sound and a lot of brightness on the screen. “Our number-one goal is to provide an outstanding customer experience, because if we do…then all the other things tend to take care of themselves. It’s relatively easy to say,” he cautions. “There is a lot that goes into it: everything from food offerings to projection and sound, to cleanliness and to how you treat theatre staff and how they take care of the customers.”
On that front line, Zoradi admits to learning something that he did not know before, either in distribution or as a board member of Rave and Cinemark. “The one thing that I gained an appreciation for that I didn’t fully have before are the thousands and thousands of details it takes to run an exhibition chain efficiently and with real high quality. As a distributor, I did not have as much exposure to those aspects. So, again, I have truly gained an appreciation for our operations team and all they do to make the customer experience great.”
How does it feel to be moving from “The Dark Side” of distribution to seeing the light of exhibition? “I think both like to make that same gag about each other,” Zoradi responds. “It just depends on what side of that fence you are on. But one of the key things that has happened is that the distributor/studio relationship with the exhibitor has become less contentious on a day-to-day basis.” Moving towards the adoption of “commercial terms that are generally on some form of a scale” he feels has allowed “the discussions to move more towards how do we jointly market to get more people into the cinema to see this movie. With less day-to-day commercial tension on the terms of the deal, our goals are properly aligned now.”
When it comes to release-window experiments and new revenue opportunities, Zoradi and Cinemark have their priorities lined up as well. “We take each one when it comes down the road and we evaluate.” He believes “loyalty programs are fantastic and we certainly are looking at rolling one out in the not-distant future. We think the idea of SuperTickets has value, as we look at the commercial aspect of how exactly those are going to work…and what the financials are.” Based on Cinemark’s international acumen, Zoradi has seen how “the future holds some real merit for some subscription models in the theatrical environment as well. There has been success in France for a number of years, in the U.K., and some success in Canada. Subscription models have been working extremely well on the cable side and it works very well…with the Netflixes of the world. I think there will be some very good models that will end up working well for the theatrical experience.”
Again, he adds, Cinemark is in an advantageous position for remaining open to new business ideas and being willing to experiment. Operating across 41 of the United States, “you can test things in different markets. You can find out what works and what does not. And then you can adapt and make changes before you roll it out nationally.”
Before any new opportunity, theatrical exhibition continues to have its challenges. For Mark Zoradi, one of them is “to continue to provide an experience that motivates consumers to leave their home. To have them go out and pay somewhere between $8 and $13, depending on where they live, to experience a motion picture in the theatre. We are certainly trying to meet those challenges with everything from luxury recliner chairs to additional dine-in opportunities, to VIP theatres, to improved sound.” He also mentions the Cinemark XD initiative as providing an “extraordinary visual and sound experience. It is our challenge to continually improve the exhibition experience, so that moviegoers will leave their home and see a film. And you know what? They have done so over the last 100-plus years. Television comes in, people still go; video and discs come in, they still go; cable, streaming…they still go. Why? Because going to a movie is a shared experience. We just need to continue to make it as high-quality as possible.”
And the best way to do that? “I think the most important thing is that we listen to our customer. We talk to them about what are the things that they value the most.”
About Mark Zoradi
Mark Zoradi most recently served as the chief operating officer of DreamWorks Animation SKG, Inc. Prior to that post, he served as president and chief operating officer of Dick Cook Studios, a new-media and entertainment start-up company. During his 30-year career at The Walt Disney Company, he served in a variety of executive positions including Home Entertainment, Disney Channel, Television, Worldwide Theatrical Distribution/Marketing, and as president of the Motion Picture Group.
What is your favorite movie?
“This goes back to my Disney days and it is not one film but the entire Toy Story trilogy. I loved the original, because it was so unique at the time. It was the first real entrée into CG animation. I loved the second one because it was hysterical. And the third Toy Story because it was so emotional. My favorite movie growing up was, clearly, The Wizard of Oz, but I probably didn’t see in the theatre for the first time.”
Favorite movie snack and drink?
“Milk Duds. For a drink, sometimes Coke, sometimes water, a cup of coffee.”
Favorite movie theatres?
“Well, that’s easy. My favorite Cinemark movie theatre is, without a doubt, Playa Vista. It is spectacular. Outside of Cinemark is the El Capitan because it holds such great memories for me from the years at Disney.” Another favorite from the past is what has come to be known as Cinemark North Hollywood after a complete overhaul including luxury recliner seats. “It absolutely revitalized the theatre. So this theatre that I had known for a long time and had been rundown has come back to a very, very vibrant neighborhood theatre.”
Do you remember where you saw your first film?
“I am trying to remember the title… I might have been four years old and my parents took me to a movie… But I do remember that it was an old single screen in Sacramento, California, called the Village Theatre.”