-By Kevin Lally

AMC Entertainment Inc. is celebrating its 90th anniversary this year—and experiencing a growth spurt.

On Jan. 19, the Kansas City, MO-based circuit announced that it had entered an agreement with 101-year-old Kerasotes ShowPlace Theatres to acquire most of that Chicago chain’s assets. Once the deal is finalized, AMC will take over all but three of Kerasotes’ 96 locations, which are located primarily in the Midwest.

The Kerasotes transaction is yet another important chapter in the story of one of the nation’s most innovative and durable movie theatre companies. It all began in 1920 when Edward Durwood founded Durwood Theatres, the forerunner of AMC, in Kansas City. Edward’s son Stanley took the company to the next level, opening the very first multiplex, the Parkway Twin in Kansas City, in 1963. Stan Durwood became one of the most esteemed exhibitors of the 20th century, pioneering innovations like the cupholder armrest, guest-loyalty programs, and the first North American megaplex, the Grand 24 in Dallas, Texas.

With Durwood’s passing in 1999, Peter Brown took over as CEO and oversaw the company’s headline-making acquisition of the legendary Loews circuit in 2006. Brown was succeeded in March 2009 by Gerry Lopez, the former president of Starbucks Global Consumer Products, Coffee and Foodservice Divisions.

Film Journal International spoke with the affable Lopez about his first year at the helm of this fabled circuit, what the future holds, and how it feels to lead a company with roots in the silent-movie era.

“It’s humbling,” Lopez says of the AMC legacy. “I’ve been involved in younger companies and older companies. What it does for me when I come to work in the morning is remind me of the heritage that has been built. It brings to the forefront the respect that one needs to have for what has been built here, and the great work of those who came before. When Stan Durwood started the company and accelerated its growth and started building megaplexes with stadium seating, he revolutionized the industry. To try to follow on that heritage is something that is sobering, and not to be taken lightly. With everything we do, there is always that lingering question among the senior team: Is this something that is respectful of who we are and takes us to a level that our guests expect us to go? Or conversely, are we regressing to a place where we would be destroying the heritage and reputation of the company?

“Sure, we do all the financial and marketing analysis and we have Excel spreadsheets in every laptop in the company,” Lopez continues, “but to not at some point in the deliberations take the time out and put it in the context of the 90 years and what the company has become would be an incomplete analysis… I want somebody to be here 90 years from now and say, ‘Hey, those guys who came before me did all right!’ Because I’m sure respectful and appreciative of the work of those who came before us.”
Looking back on his own first year steering the company, Lopez declares, “I’m having a ball. I’ve spent most of the year trying to learn and trying to listen, and trying to keep my mouth shut, which is difficult. It’s been a lot of fun, and I’m looking forward to keeping it going for many years to come.”

What sorts of changes has he implemented? “One of the tricks about coming to a company like AMC with such a rich history,” Lopez responds, “is being very careful and delicate and deliberate about the changes we do put in place. We have brought a renewed focus on the guest and are experimenting with a variety of initiatives, from reserved seating to healthier options and a broader variety of products at the concession stand. We put in place a new organizational structure; we have empowered the general managers to start making more and more decisions. Although Kansas City retains a certain amount of control over what happens in the individual buildings, the general managers at the local level have a much greater voice. We also created a new marketing structure and have changed the marketing mix. We are doing less in traditional media like newspapers and doing much more over the Internet and in social media than we’ve ever done before.”

A major initiative, of course, was the Kerasotes deal. “The Kerasotes acquisition is complementary to our footprint,” Lopez elaborates. “They have strength in cities where we don’t. We think the two circuits fit together very nicely. Like us, they’ve been in the business a long, long time, are family-owned originally, and managed by people who care quite a bit about the industry and their people. It’s a great match.”

Another key development at AMC is the ongoing transition to digital projection. In late January, Lopez estimated that the circuit had around 400 digital 3D screens, and he expected to have another 100 installed in time for the March 5 opening of Disney’s 3D Alice in Wonderland. “And we are crossing our fingers for DCIP [Digital Cinema Implementation Partners] financing to come through. That will enable our systems, along with Regal’s and Cinemark’s, to significantly expand their 3D capability. It’s not hard to imagine that a year from now the 3D capacity in North America will look dramatically different than it does today because of DCIP.”

Lopez calls the industry’s renewed interest in 3D “a measured gamble. We knew instinctively if not quantitatively that the technology would deliver. It was reasonable to expect that the technology would continue to evolve where it would progress from animation into live action, and the creativity of the filmmakers has delivered on that front.”

He then offers a personal anecdote. “I went to see Avatar for the third time at one of our auditoriums in Michigan at a Sunday morning show. When the first 3D trailer came on, there was an audible gasp from the audience, just from the way the words in the trailer projected. What that tells me is…that Avatar is opening up the 3D experience to novices, people who never had a reason to experience 3D before. I turned to my wife and said, ‘Now that’s why we’re in the movie business.’”

Digital technology is not only opening up a new world of 3D, but alternative options too. “We think alternative programming is a significant piece of our future growth,” Lopez declares. “And the reason is fairly straightforward. Our theatres, busy as they are on a Friday, Saturday or Sunday, are not that busy on Monday, Tuesday, Wednesday, Thursday. There are plenty of football games, basketball games and other events that could be put on a big screen to the advantage of the content owner and the public. We’d be more than happy to host showings of major sporting events. And it depends on your definition of ‘major sporting events.’ If you live in Kansas City like we do, KU basketball is a major sporting event. Every region of the country has a team or two at the college or professional level where we think that our size screens and the atmosphere of a theatre would be appropriate. Alternative content is an added benefit of the digital rollout, and a significant one.”

Music events also show tremendous promise. “If you had given me the numbers that we continually post for the opera, I would have never believed it,” Lopez admits. “It is not unusual for our theatres on Saturday mornings to be 80, 90, 100 percent sold out at $15, $18, $20 a ticket for the opera. Before coming to AMC, I would have considered that an ambitious dream. Yet it’s happening eight to twelve times a year. That tells us there’s an appetite for it out there. It makes sense. Music and sports are the two natural classes of content that make sense for this kind of thing. I don’t know if you’ve been to a stadium-sized rock show lately, but if you’re at the far end of the stadium, all you’re doing is looking at the monitors anyway. And you pay as much as $80 for that privilege. That’s great, but I’m going to have a bigger screen than that monitor and you’re going to be a heck of a lot closer to it. Live is live, let’s be clear, but given the quality of sight and sound in our facilities, it will be a very pleasant experience for the guests to come watch their favorite artist put on a live replay of a concert that may be happening across town or across the country.”

With cinemas turning more and more into entertainment centers, AMC in 2008 introduced Fork & Screen®, an in-theatre dining concept, at two locations in Olathe, Kansas, and Atlanta, Georgia. “We’re thinking about others,” Lopez says. “It’s a tricky business to obtain an appropriate return on investment and to provide a guest experience that is relevant. It’s not that easy with theatre people. Running a restaurant is a different business, and the marriage of theatre people and restaurant people is something that we’re figuring our way around. There are many who have tried it, and there are some who are succeeding. But many is a greater number than some.

“The opportunity in upscale dining is clearly there, but it goes beyond that,” Lopez emphasizes. “The breadth of offering in our concession stands can also stand some updating. We’re working on that. We’ve introduced some new items, we’re testing a whole bunch more—some have worked, some have not. It is reasonable for all of us in the industry to continue to experiment with improving the experience of guests in the food and beverage area.

“The staples, popcorn and Coke, are not going to go away,” Lopez continues. “We have endured a lot of commentary, but there is a reason why they are the staples—they are expected by our guests, and our guests talk with a loud voice. They expect to have their popcorn and they expect to have their Coke or Diet Coke. But as the demographic profile of our audience changes, we need to be prepared to provide greater variety, whether it is candy or healthier [snacks]. Healthy is an immediate opportunity—it’s a trend that is not restricted to theatres, it’s a trend in food in America, period. It is not heavy mental lifting to figure out that as America tries to eat healthier, we should play in that arena with them. It’s not the teenagers, because they are of course indestructible. But when you have a product like Up in the Air or It’s Complicated, that demographic is going to have dietary requirements that exceed what we have traditionally provided in our concession stands. To not pay attention to that is a mistake.”

Lopez and his team have also been paying attention to the new forms of social media taking over the lives of their customers. “Last October we did the first revamp of our website in 18 years. We now have a much more interactive website where guests can blog, watch trailers, and provide feedback on the movies, the theatres and the website itself. We’ve also launched a mobile app that allows you on a BlackBerry to quickly and easily find the theatres near you and the movie times. We just launched our first page in Facebook. We’re engaging in social media much more directly. It’s so easy these days to engage with the customers directly. They welcome it. They tell you straight up what you’re doing right and what you’re doing wrong. They want you to know, and we want to know too.

“Movies elicit responses in people,” Lopez reflects, “and we’re trying to provide a forum for that. We’re one of many, we’re going to have to earn their trust so that we become one of their preferred sites. But I think we have a shot at doing that.”

Inside the theatre, Lopez says, “It’s all about focusing on the content and the guest experience. That’s not new. I did not learn that lesson in exhibition—I learned that throughout my career, and I’ve been fortunate to work for companies that teach you that in many different ways.”

Lopez is especially pleased to have arrived at AMC in a year of growing attendance. “The box office is one indicator, but lost in the shuffle sometimes is the attendance, the number of human beings coming out. That’s, in all candor, sometimes more gratifying, because it means that we’re reaching and touching more people—or at least we’re touching the same people more frequently. I’ll take both! The sign of a growing retail business is not necessarily the dollars at the top, but it’s the number of people and transactions that you can conduct in the course of that business.”

At 90 and going strong, AMC under Gerry Lopez looks like it’s in very good hands indeed.