‘E’ for Ellis: ShowEast salutes Cineplex CEO Jacob
“The exhibition business is strong, there has been a lot of consolidation, and I think there are many changes happening for the better,” declares Ellis Jacob, president and chief executive officer of Cineplex Inc. and this year’s Show ‘E’ Award recipient.
Among the positive developments he sees, “Pretty much all of North America is now digitized and several circuits—including Cineplex with our UltraAVX and VIP Cinemas—have built large-screen and luxury environments. In Canada we offer some of the nicest theatres in the world for prices that are very, very reasonable overall.” From a box-office perspective, “things have been very good as well during the first half of the year and this summer has been the best ever. Business has been quite favorable overall.” And to think that “when I started 26 years ago, everybody thought the business would last a year or two,” he laughs. “They thought I was crazy getting into this business.”
Jacob is receiving our industry’s accolades not just for his engaging optimism but also for having “devoted himself to cinema exhibition as well as serving on the boards of various industry associations,” according to ShowEast managing director and FJI publisher Robert Sunshine. “His dedication to exhibition is tireless and unmatched.”
From the beginning at Cineplex Odeon Corp. in 1987, Jacob has become the leading figure in theatrical exhibition in Canada, growing Galaxy Entertainment, which he co-founded in 1999, into the publicly traded and diversified entertainment holding of today. Operating under nine distinct brands, Cineplex Entertainment’s 136 theatres and 1,454 screens alone welcome some 71 million guests annually.
Empire Theatres is one name, however, that will not be retained for the 26 newest theatre members under the Cineplex umbrella, once the deal is reviewed by the Competition Bureau. While all of their 218 screens will rebrand as Cineplex, Empire continues to operate its other locations independently. The most recent in a line of strategic acquisitions that included Cineplex Odeon (2003), Famous Players (2005) and Cinema City (2007), as well as four AMC theatres (2012) over the years, Jacob says, “was more about giving us a presence in Eastern Canada where we had no theatres.”
Growth opportunities are far from over. Even though Canada is “much more mature than markets in Asia and Eastern Europe,” he contends. “You could not build another 2,000 screens in Canada. While that would be absurd, there is certainly room to build two or three new theatres on an annual basis. And there is always opportunity if you have new ideas.”
Jacob names the first all-VIP cinema under construction at the Shops at Don Mills in the Greater Toronto area, where all screens will offer luxury amenities as opposed to a select number having been established in existing theatres. “We continue to improve the offerings in all of our existing markets and will expand in those markets where the population is increasing. But we have to be very focused on where we build and how we build to give our guests the best possible experience.”
What about going abroad? “We look at all opportunities.” He calls expansion “a function of what is best for our company, our employees and our shareholders. If an opportunity comes up, whether this is in India, the United Kingdom or Australia, we’ll take a look. But it has to be beneficial and accretive to our company. I always say, ‘Bigger is not always better, better is better.’ There are still plenty of things that we can do in Canada. Cineplex can improve upon the things that we already do, because on some of them, we have just barely scratched the surface.”
He offers the example of alternative programming, which Cineplex began ten years ago. “When we started with the Metropolitan Opera, we sold one million dollars worth of tickets for the whole year. This season, we sold one million and over in a day.” For Jacob, “it is a matter of developing those concepts and building them out further,” even as the Front Row Centre event series is among the most varied line-ups anywhere.
Another expansion involves both the company’s theatrical and online movie sales/rental businesses and has caught the attention of exhibitors worldwide. The July launch of Cineplex SuperTicket offered admissions to Pacific Rim (Warner Bros.) bundled with digital ownership of additional content and the same film upon its availability for the home. “Once it is deposited to your locker in the cloud, you have the ability to watch the movie on five different devices,” Jacob explains, drawing a comparison to music and iTunes. “I think this changes the way people watch movies. I was very pleased with the results for a first-time opportunity. You have to remember this is the first time that any circuit in the world has done something like this in partnership with the distributors. [Additional titles Smurfs 2 (Sony) and Kick Ass 2 (Universal) included immediate viewing of Scott Pilgrim vs. the World.] It’s all driven by how well the movie does. There are some interesting titles coming up in the balance of the year that will really prove if this a home run or not.”
Already operating the necessary backbone through its Cineplex Store and with obvious expertise on the theatrical side, Jacob agrees that SuperTicket was the next logical step. But there is more. “We have now close to five million Canadians that are signed up for our SCENE loyalty program,” he says about cross-promotion and awarding bonus points. “That is the equivalent of someone in the U.S. having close to 50 million members in a program. It is quite significant. We know what movies our guests have watched, and so we have a very good understanding of what else they might be interested in.”
Jacob’s personal top choice is The Shawshank Redemption and having popcorn, even at the office. “Every day at two o’clock, we pop it fresh at the Cineplex Diner at our headquarters.” His favorite theatre is Scotiabank in Vancouver “but I also have a lot of other favorite theatres at Cineplex including Galaxy Cinemas in Peterborough, which was one of the first theatres that we built.” He watched his very first film at the Globe Cinema in Kolkata, India. “It was a whole different way of watching movies in those grand, big auditoriums. You paid by what seat you sat in. The closer you were to the screen, the less you paid,” he chuckles. “It was a different but fantastic experience.”
Judging from his words of appreciation, receiving Show ‘E’ honors is similarly fantastic. “It is a real honor and privilege to be recognized by your peers in the industry. I feel really pleased, as it is a reflection of the great management team that we have at Cineplex. Most of the individuals at the senior level have worked with me for a significant amount of time.” Spending no less than 25 years with Dan McGrath (chief operating officer), Gord Nelson (chief financial officer), Jeff Kent (chief technology officer). Michael “Mac” McCartney (executive VP, film programming) and Michael Kennedy (executive VP, filmed entertainment) has “been a long and fruitful partnership.” While it is important to thank the Cineplex team, Jacob immediately adds “my three women” to his list. “My wife and our two daughters have been the backbone of getting me to where I am.”
Professionally, Ellis Jacob has taken inspiration from Lee Roy Mitchell, chairman of Cinemark Holdings. “Very much like me, Lee Roy started small and grew the business. He is among the great innovators in the industry who went overseas and into South America. He has done a great job in building the company.” For Jacob, “at the end of the day, it is all about taking risks and being creative, innovative and always believing in your team.” Becoming a Member of the Order of Canada in December 2010 and receiving the highest civilian honor available “for his contributions to the theatrical entertainment industry as a business leader” was his proudest moment. Not so pleasant was owing “a ton of money” at the financially troubled predecessor company 24 years ago and, as then-CFO, having to deal with “20-odd banks from all over the world, from Japan to Australia to India. It was a real nightmare,” Jacob attests.
Thankfully, at Cineplex today, he can take care of more pleasant things. “For me personally, it is very important to be giving back to the community and helping those in need.” Jacob says he came to Canada “as an immigrant at a very young age and Canada has given me a lot of opportunities. It is important to give back, helping people and changing their lives for the better.” Whether hosting an annual Community Day that last year alone raised $425,000 for Starlight Children’s Foundation, or by responding to immediate needs like the Lac-Mégantic railway tragedy and flooding in the province of Alberta, Cineplex offers much needed support.
Jacob recounts a visit to the grocery store that happened just two days before our conversation. “A woman came up to thank me, ‘You did the best thing.’ When I asked her what she was referencing, she said it was for the Jacob Family Theatre that we opened at Baycrest Health Sciences so that residents, families and caregivers there can experience the magic that movies provide.” Dedicated in mid-March and wheelchair-accessible throughout, the auditorium offers 275 seats equipped to communicate with staff members if needed. “I know how much it meant to my mother to go out to the movies while she was hospitalized,” he said at the time. “Many of her fellow residents always wished they could join her. Now they can watch a movie right at the hospital.”
Looking ahead, will people still be joining in that sense of community at the cinema in the future? “We will definitely still be going to the movies,” Jacob insists, “but we will be watching them differently, as we are continuously changing the experience. Also evolving is what we will be showing in addition to the movies,” he predicts. After the evolution of stadium seating and digital cinema, “we are now going to see the evolution of how movies are watched.” He mentions VIP concepts, UltraAVX-type large formats, Dolby Atmos sound and D-Box moving seats as “the different features that we put in place to make the experience even more unique. There are so many improvements that have taken place that I think the bar is continuing to be raised all the time."