Connected cities: Cinepolis operations chief Miguel Mier believes in information and infrastructure
“Alejandro and I were classmates during our first year of university before he went on to Harvard.” With the story of how he became part of Cinépolis, chief operating officer Miguel Mier continues the family tale of Organización Ramírez, as outlined by CinemaCon 2013 honoree, Alejandro Ramírez Magaña.
In 1994, “Alejandro’s father requested him to do a study on expanding to other territories what was a small, at least by comparison to today, exhibition company of about 300 screens,” Mier recalls. “That’s when I joined the company in order to consult about economic conditions in other countries. But that same year, the devaluation of the peso came into play. All of our international plans of expanding were frozen and I focused my activities on two other areas instead—namely, growing the company internally and information technologies.”
For Mier, both of these go together. “I am looking at our business as one that is heavily supported by technology. Our global infrastructure is probably one of the main elements that have differentiated us from other players in the industry.” When Mier started building the department, “Cinépolis didn’t have any computers whatsoever, not in any of the theatres, nor on the corporate level. We started with telefax machines, then computers and e-mail,” he recalls. “Today, everything is connected to our backbone in Morelia, Michoacán. Not only in terms of information that comes from and goes out to our cinemas, but our digital networks are also connected to the operations center here. From the Morelia NOC, we can see the performance of all the projectors and even sell tickets via our own telemarketing infrastructure.”
With more than 14,000 shows daily and 571,583 seats available around the globe (per Jan. 31, 2013), Mier says there is still more to do. With Internet, mobile and social-media offerings, “Cinépolis is providing our customers with the platforms, services and environments in which they are leading their lives,” he assures. “We have been trying to remain at the forefront of technology. I believe that we have moved from a brick-and-mortar company to operating a network. That’s how we see our evolution now in the digital world.”
Nonetheless, expanding the theatre circuit is still very much about building brick-and-mortar structures in the real world. In 1999, Cinépolis set out to look abroad again, Mier concurs. “First of all, we kept in mind that Mexico was a big market that required most of our attention as well as the majority of our investment. But we also realized that the market here would eventually get saturated and that we really needed to become a multi-national company. We started with countries that were easier for us to enter, in terms of language barrier and even distance,” he explains. “It is, in fact, closer to fly from Mexico City to Guatemala or Costa Rica than it is to Tijuana even. Going south made absolute sense because these markets required modernization of their exhibition infrastructure.”
The Central American expansion—beginning in Guatemala and Costa Rica, followed by Panama and San Salvador, then second sites in the first three countries, and finally Honduras—were often supported with investments from local partners. “This is atypical to what we do in Mexico,” Mier notes. “Since we were sort of in test mode, we decided to have local partners and some of them have been bought out over time.”
South America was next on the agenda with the cities of Bogotá and Calí in Colombia, and Lima, Peru. “We were growing from smaller markets to countries that were a little bit more complex and bigger. Columbia and Peru are larger than the entire Central American region together.” Brazil followed in 2009 and today Cinépolis operates 16 cinemas with 118 screens there and another six and 56 screens under the Box Cinemas brand.
Following “our Mexican strategy in that we want to be part of the best commercial options in the market,” Cinépolis chose to work with real-estate developers. “While we continued on our strategic path, we also learned that we needed to customize how we are operating and to localize many of the offerings.” Although those countries and Mexico “are quite similar in many ways,” Mier says that Central America also taught Cinépolis “the importance of having a sound exhibition offer with regional adjustments and to add local flavors to be more appealing to our customers.”
One such adjustment is food, “definitely,” he concurs. “In Mexico we like our food a lot spicier. We have a lot of sweets and candy with chili. That doesn’t actually work anywhere else. Programming is different as well and we had to adjust our booking policies to the markets. Everything has its nuances and, as similar as these countries are, we needed to develop the sensibility to go further in our differentiation.” (More about that on the following pages.)
One item is certainly the same. “The essence of our business is projection and sound,” Mier affirms, rejecting any suggestion that theatres should be built according to the state of development within the market. “That goes for architecture and design as well. The geometry of the rooms affects projection and sound. And we never compromise on projection and sound. Our specs are respected in every country.” While construction materials are sourced locally, seats arrive mostly from Mexico, with projection equipment either sourced from the U.S. or Europe, he says.
Moving on to Asia, Mier mentions the main factors for entering a very different market in 2009. “India is underserved and consumes a lot of movies.” Again, opportunity and connection became an integral part of the success. When Mier was working on his management degree at Stanford University, he met fellow students from India. “We started playing with the idea of launching an exhibition company in India,” he recalls. “I invited Alejandro to Stanford as a visiting CEO and, after his presentation, we all began to talk about this seriously. He liked exploring the possibility from an academic perspective, so I wrote a case study with a number of my Stanford professors. Upon my return to Morelia, I presented the results to the Cinépolis board. The directors of the company all liked the idea and decided to invest some seed money into validating the hypothesis. That’s how it started. While economic opportunity was certainly there,” Mier agrees, “it was also the conjunctural event that I was actually in a place where I had the time to research in-depth how that idea could come to life.”
Subsequently his fellow students became involved with management. “When I presented the plan, it already came with two potential leaders. It was a good match. They were Indian executives who had already spent a year with me studying the pros and cons, researching everything about this idea. They also had the willingness to start this new company, which is 100% owned and funded by Cinépolis Mexico. It played out that all the elements were there to be courageous—and the board was that indeed—and to be executing this move into such a distant part of the world. The good thing was,” he laughs, “that, after investing in India, everything else looked closer and easier to crack.”
The first cinema opening in December 2009 in Amritsar, a “very exotic place” near the border between India and Pakistan, was “the most amazing moment in my career,” Mier readily attests. “I had started working on this project three years earlier in a classroom. To see this come to life in a country located on the opposite side of the globe…was something very memorable.” Although his Stanford professors did not make it to the opening, “we received many e-mails from other students who traveled there speaking very highly about how the idea was originated and how it has since evolved.”
Moving on to less positive events, Mier admits to some difficult moments during his time with Cinépolis. “It was definitely during the Mexican swine flu crisis in 2009 when all of our theatres were shut down for 15 days, some even longer. More than 2,000 screens were shut down, which was very stressful, not just because I had the operational responsibility. Bringing everything back to normality was difficult already, but convincing the public that it was safe to go back to the movies was another challenge.”
Speaking further of challenges, why take on the United States, when Cinépolis has fared so well with developing markets? “Although the U.S. is over-screened and saturated,” he contests that the luxury segment is underserved. “We were already operating more than 70 VIP locations at that time. So it was simply puzzling to us why in the U.S., with such high income levels, there was really no decent VIP offering. That’s the niche market we were addressing from the start and we are not moving away from that. Instead of entering the highly competitive markets, we are trying to position ourselves in a segment that we see as having a greater opportunity for business… Consumption in the U.S. is very high compared to other territories, especially when you have a nice proposition of amenities to offer. American audiences will pay for quality.” (For more about seizing “market opportunities to bring ‘casual’ luxury to U.S. cinemas,” please see our November 2012 profile).
Having launched Cinépolis VIP in Mexico in 1999 and expanded the concept to every single market since, are there ideas that have come out of other countries and back to Mexico? “There are many things,” Mier responds, naming assigned seating as one broadly reaching example. “Last year we went back to all of our theatres in Mexico and readied them for a full rollout of reserved seating. This is no longer a premium feature now, like in many other cinemas and places. Our guests can get a specific seat in any one of our theatres, any time, from the web and on their mobile devices. That idea came from Colombia and India, where reserved seating is standard practice.”
As Cinépolis had offered the option before exclusively as part of its VIP brand, extensive testing was in order first. “Customers were happy about it,” Mier confirms. “Certain paradigms have been out there for so many years—like not having reserved seats—that they are no longer questioned. But if you go ahead and challenge those paradigms, you’ll find out that customers are willing to try new things. In the process, they become loyal to those brands that are offering new products and services to them and to those that bring them new and better experiences.”
In doing so, he believes the business will continue to thrive. “Going to the movies creates this very magical and entertaining experience that will never go away. But exhibition has to be as technology-oriented and as forward-looking as film producers and the studios are.” Mier uses The Hobbit: An Unexpected Journey as an example. “The film came in 14 different formats across our region—2D, 3D, 4DX, high frame rate, digital, 35mm, dubbed, with different subtitles and sound encoding—and Cinépolis was the only exhibitor that showed them all. Here you have a studio investing huge amounts of money into developing a great story. Exhibition has to match that in technology deployment so that these stories can be presented, year after year, in the best possible way. That’s how we see the future. That’s how we feel about technology and how we see our industry’s evolution over the coming years.”
Remaining successful requires other factors as well. “Customer service, food offerings and additional amenities…should be on the same level as the story and always develop right alongside with what the customers want, their changing tastes and habits,” Miguel Mier believes. “Cinépolis wants to be a forward-looking offering to moviegoers even though cinema has become the somewhat ‘old-fashioned’ way for family entertainment.”
Since 2003, Miguel Mier is the chief operating officer of Cinépolis, responsible for operations, film booking, marketing, information technologies, human resources, sales and international operations. From 1994-99, he worked as the IT manager, developing and implementing the first software for operating theatres. From 1999-2003, he was regional operations director. During his tenure as COO, Cinépolis has evolved from a company running 530 screens in Mexico to a company with over 3,000 screens in 11 countries. He launched the international corporate offices in Costa Rica, India, Brazil and the USA. Mier has a BS in Economics, ITESM; MS in Management, Stanford GSB; and Double Degree MS in Information Technology, Heinz College at Carnegie Mellon University/ITESM.
Favorite Theatre: “Cinépolis JK Iguatemi in São Paulo, Brazil, has all the greatest offerings under one roof. I also go to my local Plaza Morelia Cinépolis hundreds of times with my nine-year old daughter and five-year old son. It’s great that we all love that environment so much and get to see new movies constantly.”
Favorite Film: Of recent movies, he enjoyed watching Life of Pi with his children; The Godfather and Amores Perros.
Favorite Movie Snack: Chili popcorn and Coke Zero
First Theatre/Memory: Seeing Star Wars at Multicinemas Universidad in Mexico City. “What impacted me most was the vivid and exciting travel to a mythic new world.”
On Cinépolis: “We are a company that has a calling for growth, that embraces social responsibility strongly, that is oriented towards technology and totally focused on providing the best customer service.”