Aiming for the best: Kinepolis' Eddy Duquenne earns global exhibition honor
“Oysters and champagne”—more appropriate chatter for upscale restaurants—seem unlikely words to emerge in a profile of one of Europe’s top exhibition executives and the major state-of-the-art chain he runs. Nor is it likely that such words might relate to a philosophy and growing trend that drives some important exhibition decisions.
But when the conversation is with Kinepolis Group CEO Eddy Duquenne, the CinemaCon 2014 Global Achievement in Exhibition Award winner to be honored on the convention’s International Day, his evocative culinary reference—a metaphor for quality, exquisite experience and forward thinking—is one way of conveying a business vision.
Based in Ghent, Belgium, incorporated in 1997 and listed in 1998 on Euronext, Kinepolis from the outset has been known for being one of the most innovative chains on the planet. The trendsetting circuit boasts lavish lobbies, VIP areas and spacious auditoriums, deemed among the most gorgeous any chains provide. Acting from its launch to provide “the ultimate movie experience,” Kinepolis built Europe’s first big megaplex in 1989 in Brussels and, a few years later, had the biggest megaplex for its time in Madrid.
Kinepolis now operates 23 multiplexes and 317 screens throughout Belgium and France, where it has its majority of screens, and in Spain (three theatres), and single megaplexes in Switzerland and Poland. The Group serves over 21 million moviegoers annually and close to 1,900 employees in its various operations. And it’s no surprise that the innovation-driven chain early on embraced digital and 3D, mobile ticketing, and alternative programming.
Kinepolis has five operating entities. Beyond cinema operations, it is also active in film distribution (Kinepolis Film Distribution, or KFD), event organization, screen advertising (now more aggressively through its recent acquisition of Brightfish), real estate (for property management as the chain owns the vast majority of its multiplex properties) and tech support (with its Digital Cinema Services operation).
Kinepolis takes special care throughout its businesses to be socially and environmentally responsible. Acknowledging so full a plate, Duquenne boils it down: “Our aim is to be the best cinema operator, best marketeer, best real estate manager.”
And who could be more fitting for these chores than Duquenne himself, an executive who came to Kinepolis in 2008 after years in finance (15 years in banking), tourism (five years), and additional tour duty served in real estate.
Duquenne oversees executive management with his CEO counterpart Joost Bert, who serves as shareholder representative for the Kinepolis shareholders group. Duquenne’s eyes are on the Group’s multi-faceted operations.
Asked what prior professional experience proved most valuable once he was immersed at Kinepolis, Duquenne replies that maybe the best lessons came from what he learned about people: “When you come to a self-learning organization like this [Kinepolis], you understand how much you can trust people with responsibilities and empower them.” From tourism, of course, came insights into people and their needs to escape from the day-to-day and an overriding focus on giving customers what they want. Self-evident is what the CEO imported from his financial and real estate backgrounds.
Working to assure that Kinepolis achieves all its “Bests in,” Duquenne focuses on continuous improvement across operations, with attention to more targeted marketing to filmgoers; more diversification and turnover in its food, beverage and retail sales; optimization of the real estate holdings; expansion of B2B activities; increased film distribution; and more effective big-screen advertising.
No details are spared. Asked about theatre seating, Duquenne describes seats as large, with many including crisp, white, freshly laundered slipcovers on their high backs. Seats have double armrests and enough legroom to make a World Cup star happy.
On the concessions front, Duquenne says, “Patrons can serve themselves and bring food into the auditoriums. There’s a broad range—soft drinks to alcohol, popcorn to salads and noodles.” He jokingly adds: “Even oysters and champagne!” Well, not quite, but is such a notion so far-fetched for an ever more restless, distracted and elusive filmgoing crowd?
As with most chains, Kinepolis faces pressure from so much (mostly) in-home competition, but weathers this with a strategic model powered by three drivers to be “best.” Duquenne elaborates: “We’re intent on being the best marketeers and use a lot of direct marketing techniques to increase visitor frequency. For us to be the best cinema operators, we ask for increased accountability from the people we hire and also encourage them with a platform so that they will share their ideas. And we aim to be the best real estate manager in cinema. Since we’re not in shopping malls and own our properties, we can offer long-term leases to third parties like restaurants and shops near our theatres. The result is that all these businesses feed one another.”
Like the banker he was, Duquenne is ever on the lookout for business and profit opportunities. A few years ago, Kinepolis got into the distribution business with the not yet Oscar-nominated Belgian indie Bullhead, which Drafthouse Films later scooped up for U.S. distribution. The surprise hit featured startling newcomer Matthias Schoenaerts, who went on to star in Sony Pictures Classics’ Rust and Bone and can be seen in Lionsgate/Roadhouse Attractions’ Blood Ties.
Another example of Duquenne’s eye for opportunity was the Kinepolis Group’s purchase of the Brightfish ad agency, which fortifies its screen-advertising efforts. “We bought them a few years ago when they had some financial difficulties. They allow us to go digital much faster with our pre-shows. We also get the spots to more appropriate audiences and in front of appropriate features. We’re in a much faster world today, so Brightfish really helps us to better target. Brightfish is essentially an ad sales entity; their job is mainly to sell the space on the screen. More often it’s third parties who create the spots. Brightfish also enables us to test interactive publicity spots that allow audiences to vote. This assures we’re capturing more audience attention.”
Duquenne says the chain’s transition to digital went well, although there were the few expected speed bumps early on. “We call these [problems] ‘children’s illnesses’ that any new product might have in its youth. But by the second year all was resolved and our belief from the first moment that digital would be the best was confirmed. We are lucky to have Barco [also Belgium-based] as our neighbors and know that reliability is much better than ever before.”
As to what Duquenne believes has most contributed to Kinepolis’ success, he answers, “Our attention to the customer experience. That’s a passion for us. But at the same time we’re just as focused on paying great respect to our employees and on our profitability because, after all, we are a business.”
As for his ideas of how to get consumers off their sofas and into theatres, Duquenne notes, “Going to the movies is a night out and continues to be something special.” But he pinpoints some challenges. “Right now in Europe, on the continent, we have a population that is growing grayer and favoring more cultural content, so we need to offer more of that.” Also not helping matters is that “too many movies are being sold today.”
Better marketing, he believes, provides an edge. “We are trying to get the maximum through social media and our successful website really helps.”
He underscores the importance of word of mouth in attracting audiences: “As soon as a movie is in theatres, we ask every customer we have and can reach if they would recommend such and such a movie to friends. More than 20% of those we reach fill in our survey. We started this outreach the moment we had Bullhead on the screen and the feedback was so good, we gave the film a big push. We believe the measurement of word of mouth is critical because people leaving the theatre and recommending a film to their friends is what makes movies successful.”
Because audience response is so valuable in a world where no one needs another survey to answer, the chain offers incentives for completing them. Based on responses, Kinepolis plays the recommendation game like Netflix and so many others by offering film fans suggestions for future viewing based on their tastes.
On the mobile ticketing front, Kineapolis has also been in the forefront. Says Duquenne, “We were the first to use the iPhone app Passbook so that the iPhone can work as a ticket like the barcode recognition we’ve also had for a while. We always make things easier for patrons.”
And what, these days, might make things easier on the exhibition end? The question of how a world premiere in the U.S. impacts the subsequent European premiere has become largely moot, Duquenne reminds, as many major releases go out simultaneously worldwide. “What does help us now,” he explains, “are premieres at our theatres where cast members participate, because the stars showing up brings us more customers. This happened with films like Fast 5 and the second Twilight Saga [Breaking Dawn] when we premiered these. It’s amazing in cases where stars attend our premieres; the movies do more.”
In the chain’s constant drive to increase traffic, innovate and focus on what customers want, Duquenne also turns enthusiastically to the off-screen potential of better and more varied lobby diversions. And endowing these with more appeal to an aging filmgoing population. “We’re more and more creating improvements in our huge foyers and giving our customers what they want. The self-service is just one example.”
Concessions are important on this menu: “The idea is to bring people 50 years and older to what they want, especially as they are consumers of less popcorn and soda. They lean more towards those [metaphorical] oysters and champagne!”
Underscoring his and the chain’s focus on customers and increasing traffic, Duquenne also points to the growing appeal of local content. “It’s important in Europe and certainly in Belgium, where about 20% [of tickets sold] are for local content and this remains stable. It’s even higher in France, where local content goes up to 40% of attendance.”
But Spain is a different story. Duquenne continues: “In Spain, both local content and the cinema market generally have dipped due to the country’s financial situation, the crisis.” (Several European countries refer to the recession, with its high unemployment and economic paralysis, etc., as “the crisis.”)
Duquenne notes that while Kinepolis theatres in Spain are digital, a lot of the country’s other screens are not. “And Spain’s VAT [taxes] on cinema tickets went way up. So it has been hard getting local content financed.” Additionally, he observes, the Spanish industry, unlike those of some neighbors, suffers from a relative lack of (mostly government-funded) film subsidies. “Don’t forget to what degree local content in Belgium and France benefits from this kind of support.”
And what about the studio films? How are they faring on Kinepolis screens? Much from Hollywood continues to perform well, but “American sequels in Europe are having less success.” Duquenne believes that “this also has to do with the older population, a population that is becoming grayer. As a result, alternative programming is working much better.”
To better pair Kinepolis audiences with what they want to see on screens, Duquenne says, “We are thinking in terms of ‘active programming,’ meaning not waiting for what comes our way but by providing audiences with content based on what we know about them. For instance, we have in Belgium a lot of Turks, so we follow what the blockbusters are in Turkey and we’ll ask for the rights [through Kinepolis Distribution] or book these films on screens.”
The chain has expanded its businesses in other ways. Duquenne reports, “We are the number-one independent distributor in Belgium and our strategy is to distribute local content [as initiated with Bullhead], but we also work with [Netherlands-based] Dutch Film Works [DFW] and have distribution rights for The Wolf of Wall Street in Belgium. Duquenne does not hide the fact that he’s a huge fan of the film and calls Leonardo DiCaprio’s performance “his best ever.” The partnership with DFW also gives Kinepolis distribution rights for Luxembourg.
And in spite of increasing globalization, connectivity and mobility between cultures, different countries still have their peculiarities when it comes to the films they make and see. As Duquenne observes, “The French favor comedy and local productions. Look at The Intouchables [The Weinstein Company’s French comedy about a super-rich quadriplegic and the boisterous manservant he hires from the Paris projects]. When it comes to making comedies and wines, the French are unique.” (Notable is that The Intouchables is another of KFD’s films.)
Kinepolis theatre attendance in France suggests it’s the country with the highest percentage of filmgoers who are elderly, says Duquenne. This older crowd prefers local content because they are a demographic that, like the local productions, are closer to the culture.
As for the genres Kinepolis audiences favor, Duquenne names comedy as king, using the Jennifer Aniston starrer We’re the Millers as one example. “[Comedy] is number one in demand because people want to escape from reality and problems like the crisis. With comedy they can get away and have two hours of fun in a theatre.”
He also trumpets animation as strong, naming Ice Age, Despicable Me and Frozen as winners. “Our theatres work best with blockbusters, which families and the young prefer. Like the elderly, families also like the locally produced movies. And again, the appeal has to do with the fact that these films are close to their culture.”
But there are clouds on the blockbuster horizon because, observes Duquenne, “audiences are getting bored” with so much action and special effects. Asking “how many times can the world end?” he calls for more films with strong storylines that surprise and are innovative. Sequels don’t involve much risk, but more risks are what producers need to take, he says with only a hint of urgency.
Acknowledging that 2013 was a relatively good year for movies, Duquenne calls for “more upscale films” approaching the cinematic equivalent to those “oysters and champagne.” In a populist vein, he adds, “We need more of the Forrest Gump kind of originality and surprise we used to have and only now find occasionally.”
As an exhibitor, Kinepolis does what it can to upgrade content for filmgoers, so Duquenne also looks to alternative programming. The chain presents shows in the familiar categories (opera, ballet, sports, musicals, concerts) and they all attract audiences, but it’s the pop concerts, whether live or pre-recorded, that currently have the most appeal. “Our surveys and ticket sales show that our customers are four times as enthusiastic for pop concerts than they are for opera.”
But alternative continues to have that one drawback: “All of our alternative sales together don’t return to us what one big blockbuster can bring in.” Nevertheless, Duquenne remains optimistic about alternative: “I saw Elton John in live performance in Vegas and in concert in our theatre and I have to say that the latter was a more exciting experience. We had the advantage of all those close-ups, which is much better than looking at a small guy on a podium.”
Duquenne contemplates new alternative possibilities: “We’re thinking about delivering fashion shows and maybe in 3D. There are many possibilities for cinemas now because of digital. Cinemas aren’t only about movies.”
Amidst much change and disruption, Duquenne is ever vigilant and focused. And ever optimistic about the Kinepolis Group’s future. “We really have a unique concept and we’re passionate about what we’re doing.”
And really, is it so far-fetched to imagine an in-theatre experience of live 3D fashion shows beamed to graying, upscale audiences enjoying oysters and champagne at their seats?