Global family: Cinepolis' Alejandro Ramirez discusses outreach and opportunity
“The fact that we are a family business has helped us to really be focused on the business long-term,” declares Alejandro Ramírez Magaña, chief executive officer of Cinépolis. “We are not so much concerned with short-term profitability, although it is important as well, but we make our investments and decisions for the future.”
In terms of people and the overall organization, Ramírez gives credit to his family as well. “In reality, our board and our shareholders, which are all family members, have been instrumental in our growth. We all have made a long-range commitment to the exhibition industry. Even when we’ve seen clouds on the horizon, we have always remained committed to our core business. That’s who we are and that’s what we have been, for well over four decades now.”
Like so many success stories, this one began almost “accidentally.” The CEO explains how Enrique Ramírez Miguel entered the exhibition business in 1949. “Becoming a cinema operator was not part of my grandfather’s plan. In essence, people who owed him money paid it back with part ownership in Cine Morelos that they were operating in Morelia.” The cinema business must have appealed to him, however, because Ramírez Miguel set out to build his own, the Cinema Morelia, in 1956.
“Back then, there was a duopoly in Mexico and all the content was divided up. If you were not part of the groups, you would not get any movies. So my grandfather ended up leasing Cinema Morelia so that he would actually have films to show.”
The next phase of company growth was launched in 1963, Alejandro Ramírez continues. “My grandfather and father joined forces with Gabriel Alarcón Sr. and Jr. in a new enterprise which ended up building 23 of those large, widescreen movie houses of the era. They were now competing against the state-owned cinemas after the government had nationalized the former duopoly. So, in fact, the Ramírez and Alarcón families were the first truly independent operators in Mexico until, in 1971, they sold the company to the government. My grandfather and father decided to start all over again without any outside partners, and invited my uncles Marco Antonio, Eduardo Florentino and Jaime to join. Organización Ramírez, which was the foundation for what Cinépolis has become today.” While his grandfather passed in 1996, Alejandro’s father, Enrique Ramírez Villalón, continues to provide his leadership and expertise as chairman of the Cinépolis board, alongside his brother Enrique Ramírez Magaña.
When Alejandro Ramírez joined the company in early 1996, he had already embarked on a successful career in economic development both with the United Nations and Government of Mexico after completing studies at Harvard University, the University of Oxford and Harvard Business School. “My two passions in life are development and cinema,” he explains. (For more details, see our executive profiles.) “My grandfather wrote to me while I was working for the United Nations, trying to convince me to come back into the family business. I had a very interesting offer to work in the UN office of a developing country. For a 25-year-old, that was very appealing. But I decided to turn down the position and started working on the cinema operations side instead.”
The decision must not have been an easy one, even though one of Alejandro’s favorite films, Cinema Paradiso, might indicate otherwise. “I grew up with films,” he contends. “Our home was literally next-door to one of my family’s cinemas and I grew up going to the movies every single week. So when I had the opportunity to come back and work in the family business, I felt a bit of responsibility, yes. After all, my family had always supported me in my goals, education and activities that I took on.”
In the mid 1990s, “our company faced quite a bit of competition,” Ramírez continues. “After decades of overregulation, the government turned cinema exhibition into a free-market enterprise again. All of a sudden we were facing major competitors that were much bigger than us,” namely Cinemark, UA/General Cinema and Hoyts, Cinemex and CinemaStar, “and all were investing heavily into the market.”
The middle of 1994 had marked the launch of Cinépolis as the new company brand, he adds. “With only a handful of Cinépolis multiplexes actually open when I joined, I was able to put many new ideas into action and to see about rebuilding the executive leadership of the company. Not only did I feel a family duty to accept the invitation my grandfather had extended, but professionally speaking, it was also a very interesting challenge and good opportunity for professional growth.”
Alejando Ramírez’s personal growth manifested itself with the subsequent expansion of Cinépolis. “It took us 31 years to reach 1,000 screens,” he says about the milestone year of 2003, “only six to reach another 1,000 and another short three years to get to 3,000 screens, just last year. To have been present to see those important events in our history was very gratifying.”
What is the key strategy behind this amazing accomplishment? “One of the guiding principles for our growth is to reinvest constantly,” he replies. “As your readers know very well, cinema exhibition is a capital-intensive industry. Cinépolis has been reinvesting most of what our company produces. To be precise, 87% over the past couple of years.”
Ramírez also mentions a constant “emphasis on innovation and the development of new concepts” as an equally integral part of the company strategy. He strongly believes that placing “the customer experience at the center of our concerns is part of our success. We are always trying to innovate and enrich the moviegoing experience.” Ramírez goes on to highlight a few examples. “In the 1970s, we introduced the multiplex concept in Mexico, followed by stadium seating in the 1990s. In 1999, we developed and pioneered in the Western hemisphere the luxury cinema concept and have since become the largest VIP operator in the world. In the early 2000s, we introduced the first IMAX screens into commercial multiplexes in Mexico at the same time as we also developed our own large-format screen concept, Cinépolis Macro XE. We were leaders in digital deployment and 3D; and we were the first—and still remain the only one in Latin America—to offer enhanced 4D experiences. Cinépolis also invested an equal amount of time and effort to make it easier for our customers to purchase tickets, including online access and on mobile devices. Recently, reserved seating was expanded throughout all of our cinemas.”
Expanding Cinépolis abroad was another key moment in the development of the company. While the next articles will go into more detail of the move into other markets, Ramírez mentions the “rapid growth” not only of Cinépolis but also by its fellow exhibitors as a motivating factor. “Mexico was going to mature much faster than any other Latin American country. If we wanted to continue the pace of our growth, we needed to expand into other markets that offered new opportunities.”
Increasing saturation is “something that we are monitoring very carefully, particularly in view of the experiences in other countries like the United States and Spain.” Not surprisingly, he says acquisitions might very well become a growth option even though Cinépolis only incorporated Xtreme Cinemas in Mexico five years ago and bought Box Cinemas in Brazil last year. “Our strategy is to continue to grow organically, but we also consider potential acquisitions. Not in Mexico, where we are quite large, but mostly in other countries where we still have a relatively small footprint.”
If “early signs of cannibalization” were looming large in Mexico, what are some of the other “clouds on the horizon for the business” that Ramírez previously referred to? “At least in the markets that we are operating in, one of the biggest challenges is piracy. Street vendor piracy has been a problem for a long time as online piracy now keeps on growing rapidly,” he cautions. “That is something that concerns everyone in the industry. We are doing everything we can to help educate the new generation of filmgoers that downloading a film from the Internet is as bad as getting a pirated film in the streets.”
The proliferation of consumption in the home, be it streaming or video-on-demand, is another challenge. “Even if we keep the current windows in place, that is a threat in any case,” Ramírez believes. “Many people just find it very comfortable and cost-effective to watch movies at home. That’s why we continue to put a lot of emphasis on creating a really different and special, the very best experience of consuming a film on the large screen.” If exhibitors make it worth their while, he opines, “people enjoy leaving their homes and being social at the theatre. They may have a beautiful home theatre, but it could never rival a 20-meter [66-foot] screen with 3D projection and surround sound, and other greatly enhancing technologies like 4DX and Dolby Atmos. Not to mention Cinépolis VIP experiences with a wide variety of food and beverages brought to your reclining seat.”
Not surprisingly, Ramírez takes an affirmative stance towards the future. “Yes, I am completely confident that ten years from now, the cinema exhibition business will still be thriving. We will keep moviegoing alive as we continue to innovate the experience. I don’t know if this can be for forever, but definitely for many, many years to come. As long as there is a need for a good place to go out for a date and for doing something together, movie theatres will be doing well because they are such a great social space to be with other people. Movies as a communal experience are very important, especially in the Latin American countries that we operate in, and in India.”
It is equally important for Alejandro and the Ramírez and Cinépolis families to give back to those communities. Formally established in 2003, the Cinépolis Foundation has two main areas. “Visual health is our core social program, in which we finance cataract surgeries in Mexico’s rural areas.” Over the past five years, he proudly states that Cinépolis has enabled more than 16,000 operations for people that helped them recover their sight. “We wanted to work on something that has some emotional link to our vision as a company. Of the five senses, sight is the most important one in enjoying the movies. Secondly, we had learned that cataract is the number-one cause of blindness in Latin America. Yet it is a very cost-effective intervention. It costs us about $500 to give back the possibility of seeing, so the socioeconomic returns of these interventions are immense.”
In addition to their sight, he says, people are getting back their ability to work as well. “That is something we are extremely proud of and we will continue to focus on.” As part of the 400 operations that Cinépolis sets up at any one time, “we also treat young adults and even some children with congenital cataract. If you don’t help them early enough, many of these children will become blind forever. We are committed to this cause and want to expand the program into our other countries as well.”
The second initiative of the Foundation, “Vamos Todos a Cinépolis,” is about bringing cinema to people that do not have access to cinema, Ramírez continues. “Every year, we offer at least four free screenings for underprivileged children at all of our screens. We do this in a great partnership with our distributors. They have been very, very generous in lending us films in order to share them with children in Latin America. With “Ruta Cinépolis,” we actually bring inflatable screens, projectors, speakers and everything else to small towns where we don’t have any multiplexes.”
Cinépolis has also brought movie entertainment to areas that were hit by natural disasters. “After the earthquake, we were able to go to Haiti for a couple of months and show movies every night to people who had lost everything. That is something small by comparison to the tragedy that they were all facing, but it really helped them to have a little bit of recreation and to forget their troubles for a while.”
By co-producing and then distributing two documentaries throughout its theatre network, Cinépolis has helped making a difference at home too. “Presumed Guilty shows how dysfunctional the judiciary system is in Mexico,” Ramírez explains. “It was nominated for three Emmys and won for Best Investigative Reporting three years ago,” in addition to receiving the 2010 Humanitas Award from the International Documentary Association and the Human Rights Film Network Award in Dubai. In Cinépolis’ hometown of Morelia, Presunto culpable won the documentary prize at the 2009 film festival that Cinépolis has actively supported for many years. “While that is very gratifying already, it also became the most successful documentary in history with 1.75 million admissions in Mexico.” Prior to that, he offers perspective, “Fahrenheit 9/11 held the title with about 120,000 tickets. The success was completely unexpected and it also helped in changing some of our laws.”
While Presumed Guilty “threw much-needed light on reforms that are urgent in our justice system and was able to impact policy-making,” the second documentary that Cinépolis supported deals with what Ramírez refers to as the educational crisis in Mexico. “¡De panzazo! is our version of Waiting for Superman, in that it shows the huge educational challenge that we face. It shows why public education here is of such low quality and the things we need to change as a society to improve education.” Cinépolis counted a very good 1.1 million tickets sold, “with some nine million more who saw the film on open television.” Again, he enthuses, it prompted change. “Just a few weeks ago, the government approved measures for educational reform. We were able to have a very important impact in public debate around the urgency of reforming public education.”
Looking at all of these accomplishments, there is no doubt that Alejandro Ramírez Magaña continues to fulfill the promises that his two great passions—development and cinema—entail. ¡Felicidades!
Alejandro Ramírez Magaña
With a BA in Economics from Harvard University, an MSc in Development Economics from the University of Oxford and an MBA from Harvard Business School, Alejandro Ramírez Magaña worked in many facets of the business and public-policy worlds before becoming CEO of Cinépolis in 2006. He served as Mexico’s deputy permanent representative to the Organization for Economic Cooperation and Development and as chief of staff of the Social Cabinet of the Government of Mexico. He has worked for the World Bank and the United Nations Development Program in the areas of poverty and human development. He co-authored Poverty, Human Development and Indigenous People in Latin America. Ramírez is the chairman of the Morelia International Film Festival, president of the Mexican Chamber of the Film Industry, and vice-chair of Mexicanos Primero, an initiative to raise the quality of public education in Mexico. He serves on the boards of the Mexican Competiveness Institute, FilmAid International, Deworm the World, the Harvard School of Public Health, the David Rockefeller Center for Latin American Studies and Harvard’s Global Advisory Council. He was named a Young Global Leader by the World Economic Forum in 2005 and co-chaired the WEF’s Annual Meeting in 2012. Also in 2012, Mexico’s president Felipe Calderon appointed him as chair of the B20, the G20’s Business Summit.
Favorite Theatres: “Cinépolis VIP Samara in Mexico City sits right above where I have my office. Very convenient and a very beautiful theatre. Cinépolis JK Iguatemi in São Paulo is an amazing all-luxury theatre with 4DX and IMAX.”
Favorite Films: The Shawshank Redemption and Cinema Paradiso
Favorite Movie Snack: “If I want a salty snack, I go for nachos, and if I’m in the mood for something sweeter, I’ll have Nutella crêpes. We offer freshly made crêpes in all of our theatres.”
On Cinépolis: “We are completely committed to the exhibition industry. Cinépolis has been able to grow the way it has mainly because of us trying to be an innovative company that places a lot of emphasis on the customer experience. As a family company, in many ways, we are very traditional and very conservative, but at the same time that has not inhibited us from being a very dynamic, aggressive and innovative enterprise.”
For more about Film Journal International's coverage of Cinépolis, see our accompanying feature, "Celebrating Cinépolis."