-By Andreas Fuchs

“Location and renewal are the most important reasons for our performance,” says Lauge Nielsen, managing director of Pathé Theatres B.V. (www.pathe.nl), the recipient of the 2010 “International Exhibitor of the Year” Award at Cinema Expo International.

While this performance accounted for 35% of all admissions in The Netherlands last year, from a mere 14% of screens, it also registered sales of 1.8 million liters of soft drinks (475,500 gallons) and 329 tons of corn (725,321 pounds).

Location “is always critical,” Nielsen elaborates, “and we are lucky enough to have theatres in the larger cities and in good locations.” He feels “renewal is maybe not so surprising,” unless you look at the overall market.

“The Netherlands have been slow to develop the multiplex culture, and consequently admissions are still at the low end of the European scale. Slowly this is changing and, with new theatres in the planning stages, it will look different in a few years. The biggest hurdle still is the time required to obtain the necessary permits. Local regulations and procedures also make this both time-consuming and expensive. Financing is also problematic and many projects are never realized because the financing cannot be found.”

While Nielsen believes “increases in admissions and a better profile in the market,” should improve on that situation, Pathé has already managed such challenges. “We have invested in new cinemas in almost all of the cities where we are present and this has brought us to where we are today.”

Nielsen gives credit to several of his collaborators and fellow exhibitors for their help along the way. “I am deeply honored by this award. I see this as a recognition of our entire team because our business is a team business. I learned a lot from the team at Warner Bros. International Theatres and Millard Ochs and Steve Wiener in particular. We have carefully watched the creation and growth of Vue and CineWorld in the U.K. and learned from this too. Joost Bert at Kinepolis has always been at the forefront with multiplex/megaplex development and we have followed him closely too. Also, Nordisk Film in Denmark has been an inspiration because they have more or less the same market position as we do.” Admitting that Pathé has “gotten some good ideas” from all of them, “we do not copy what somebody else is doing,” he assures. “We take inspiration…and then carefully check which elements would work in our market and how.”

Nielsen’s “most exciting moment” during his time at Pathé came “when we signed the deal to acquire the theatres of MGM back in 1995,” he recalls. “Going from a single multiplex to being the market leader in one step was awesome.” Equally “extraordinary” are his memories of going to see The Sound of Music for the fifth time. At the other end of the spectrum, his biggest nightmare came during the renovation of his favorite movie theatre, the Tuschinski in the heart of Amsterdam (http://bit.ly/FJIpathe1). “I went to check on the work after a few weeks of demolition, thinking that this meant removing the existing seats. When I entered, the place looked as if a bomb had been dropped. Not only seats, but floors and structures had been removed, and I thought that this will never be restored to the original glory. As you can see if you visit the theatre today, my concerns were unwarranted, but it was quite a scare.”

Already equipped with the latest and the best technology, Pathé expects to take 2K digital projectors beyond the Tuschinski to 60 to 70% of its screens by year’s end and to every single location by the close of 2011. “This will be the way to further develop the business model and to make even better use of our facilities and staff,” Nielsen believes. “All digital screens installed so far are also capable of showing 3D films, but we will determine for each theatre how many screens need this feature.”

“Only a few players have taken the step to digital” in The Netherlands, Nielsen notes. “Many are waiting for the local exhibitor association NVB to finalize a deal with the authorities whereby a certain subsidy is obtained.” Nielsen feels, however, that “this is slowing down the process and there is still no guarantee that it will actually be achieved. While it is in the interest of both distributors and exhibitors to make this transition quickly, the process is made more difficult than it needs to be. Both parties are concerned that the other party could benefit more from the deal. Consequently, the deals are structured in such a complicated way that specially designed administration modules [are necessary.] That makes it even more costly. As always, the solution is: Keep it simple!”

Keeping it simple across the continent isn’t always easy either. “Europe is not one market,” Nielsen has indeed observed. “Each country has its own history and profile. Some countries with a significant local production have a different grip on the market than countries with only limited production. There is also a difference between larger and smaller countries and whether films are dubbed or shown in their original language. This is nothing new and I believe that the players in each country have a good understanding of their own markets.” However, from a U.S. point of view, he understands how “it may be difficult to understand that there is a difference between The Netherlands and Belgium, for instance. After all, it is all called Benelux—but nevertheless, these differences exist.”

Facing different challenges over the years is something everybody has in common. “And although steps have been taken to limit the problems,” Nielsen admits, “we still have ‘hot’ issues on the agenda like phone usage during shows and piracy. Release windows are also an issue for any exhibitor. We all want to provide our customers with a unique experience and an important factor is primary exclusivity for theatres. We shall have discussions about the length of the window as we have had in the past. Distributors also know that the showing of their film in a theatre is a quality stamp for the film, which improves its value in all other media.”

In a “small market” like The Netherlands, “the personal relations between exhibitors and distributors are generally good,” Nielsen observes. But in certain other markets, he has the feeling that “the situation is one of love-and-hate and deep-rooted mistrust. I would wish for the industry to spend more time and effort on growing the market instead of fighting each other... Wishful thinking, maybe?”

When it comes to the relationship with moviegoers, Pathé is listening to their every wish. “We think it is important to cater to different target audiences, because sometimes people want to see a film with a like-minded audience and in a more event-like situation.” Nielsen calls this “creating moments of interest in the theatres” by offering “a social event that people want to repeat,” in addition to regular showings of films. “Ladies Night,” for instance (http://bit.ly/FJIpathe2), features “a film that they could see at any other time, but the event—with drinks and goody bags—makes it different. This can be done with any special interest group when you have the right kind of film. It is more work to arrange such events, and financially it may not be interesting in of itself. But, again, this makes it interesting to go to the movies and visitors will come back for other films too.” (See our sidebar below for more examples.)

Another example of operating differently is doing away with the time-honored Dutch tradition of intermissions during any and all films. “When we opened our first multiplex [http://bit.ly/FJIpathe3] in Scheveningen,” Nielsen recalls, “we opted for no intermissions, which was extraordinary since all cinemas in the country had intermissions.” The reason was twofold, he explains. “It would be difficult to administer and control the flow of people during intermissions in a complex with many screens. Secondly, we felt that the customer would prefer not to have any interruption of the film.” Since then, Pathé has continued this policy in all of its new theatres. “We have one older and smaller theatre in Utrecht [http://bit.ly/FJIpathe4] which still has intermissions, because all other commercial cinemas have them, but I am sure this will change when a new multiplex is built in Utrecht.”

What about the boost that these breaks must have certainly had on snack and beverage consumption? Nielsen doesn’t feel the new policy has a negative impact on concession sales. “And even if the concession sales were slightly lower,” he rationalizes, “it would still be the right choice if the customers come more frequently because of the positive experience.”

What else can be done to increase frequency of moviegoing? “The Internet is becoming an important communication tool,” Nielsen responds. “It can be used creatively to ‘sell’ the product and facilitate the theatre visit by providing tickets, parking and even an ‘all-inclusive’ ticket with concession goods included—just pick up everything at the door.”

Looking ahead, he believes that “the introduction of digital projection will be the beginning of a new era in film scheduling and will make it even more interesting to see films in the theatres.” For Nielsen, the key is “knowing what the customer wants and when he wants it. Traditionally you schedule important releases to show all day in order to get maybe four shows into one day. It may be better to have four evening shows and no matinees of certain titles, but with traditional film prints this was not possible.”

We asked Nielsen how advances at home will impact the theatrical business. Despite further developments in home entertainment, he believes “no matter how good your home equipment is, it will become part of your daily routine. People will still want to go out to enjoy a different experience together with other people. It is just another challenge to the theatres because we need to be ahead in this game, both technically and in our service offerings.”

Ten years from now, Nielsen is certain “we will still go to the movies. We will have more choices, comfort and flexibility than today. Coke and popcorn will not disappear, but other healthy choices will be added. Many visits will be event-driven and part of a social experience. [As long as] you listen to and care for your customers, the future is bright with many new opportunities. You need to change with the times and provide what the customer wants today and be open for new concepts for tomorrow.”


Pathé Fast Facts
On April 1, Pathé added nine theatres and 48 screens to the Minerva circuit for a total of 21 locations with 150 screens and 34,273 seats across The Netherlands. Later in 2010, Pathé will reopen the legendary 1935 City Theater in Amsterdam  and a new multiplex in Haarlem, adding 15 more screens and an additional 1,941 seats.

In 2009, Pathé Theatres and Minerva counted 9.4 million and 1.9 million admissions resulting in market shares of 35% and 7%, respectively. The highest-attended location was Pathé de Kuip in Rotterdam with 1.5 million admissions. The largest multiplex in terms of capacity is Pathé Arena in Amsterdam with 3,250 seats (http://bit.ly/FJIpathe7). The largest single auditorium is the main screen at the Tuschinski Theatre in Amsterdam (http://bit.ly/FJIpathe8). Also in 2009, Pathé introduced digital IMAX at Pathé Arena and, in Rotterdam, at Pathé Schouwburgplein. Earlier this year, a digital IMAX was also added at Pathé Eindhoven (http://bit.ly/FJIpathe9).

Pathé Promotions
“By creating specific concepts for each target group, we can diversify more, attract more audiences and create customer loyalty.” Lauge Nielsen sets the agenda (www.pathe.nl/specials): “Most concepts are offered once a month and some of them on a weekly basis. In order to remain innovative, we will introduce a few new concepts each year, which keeps the brand attractive and Pathé in the general awareness of moviegoers. Via our website, e-newsletter, Facebook, Twitter and in-theatre communication, we inform our visitors about all our promotional activities.”

Popular and self-explanatory concepts are Ladies Night, Girls Only, 50+ Bios, Opera, Classics, Pathé Kids Club, Pathé Unlimited Card, Bollywood and films in the Turkish language.

Nielsen describes additional programs: “The ‘Family Ticket’ is very popular. Providing four tickets for €25 makes it affordable for families to go to the movies. We sell more than 375,000 Family Tickets per year and it keeps growing.

“‘Nick Jr.’ starts at the end of May, so we cannot say much yet. It is a concept created for the very young (children between three and six) and offers a chance to watch the most popular series of the children’s channel like Diego and Dora on our big screens. For most of the kids, it will be their first cinema experience.

“‘Meimaand Filmmaand’ (May Movie Month) is organized with Veronica magazine, the largest television publication in The Netherlands. This successful joint promotion offers moviegoers a special premiere (with the majority of films shown two days prior to release) with concessions and entertainment included. Most films are sold out within two weeks. In addition to extra box office, it also provides Pathé and the distributor with exposure for a full month in a magazine that has one million readers. The entire release period of the selected films will benefit from this.

“‘PAC’ is our quality label that promotes films which moviegoers may not expect to see at Pathé. It provides remarkable films that normally would not get as much attention as the major blockbusters. Films that have been promoted within PAC this year are A Single Man, Un Prophète, An Education and Nine, to mention but a few.”

On the horizon is “a new concept for the 30+ audience.” In combination with a “quality restaurant,” Pathé plans to make arrangements “so that the customer can order his meal and tickets at the same time, pay for it in one transaction and be sure to be ready for the start of the film.”

Preferred Vendors & Service Providers
Cinemeccanica film projectors, platters and lamp houses
Sony 4K projectors, NEC 2K projectors
Doremi servers, TMS network
RealD and XpanD 3D systems
Isco and Schneider lenses
Alcons, SA, QSC and KCS amplifiers
Alcons, SA, JBL and KCS speakers
Dolby SRD and DTS sound formats
THX certification
Harkness screens
Huizenga chairs and carpeting
Deutsch Theatre Bouw curtains, drapes and masking
Ticket International ticketing and concession software
Pre-show advertising by Jean Mineur Mediavision B.V.