Vue from the top: With CineEurope award, Alan McNair moves into the spotlight
“This is ruining my carefully cultivated anonymous profile,” says Alan McNair, albeit “only half-jokingly.” Vue Entertainment’s deputy chief executive officer and chief financial officer did manage to maintain his preferred low profile last year when Film Journal International celebrated the tenth anniversary of Vue, but there’s no getting away this time around, now that he’s been selected as CineEurope 2014’s International Exhibitor of the Year. “It’s a huge honor,” he declares.
“I am delighted that CineEurope has chosen to acknowledge Alan McNair’s outstanding contribution to cinema exhibition across the globe,” noted Phil Clapp, president of Union Internationale des Cinémas. Each year at CineEurope, the award is given to an exhibitor whose accomplishments, new developments, growth and market leadership make them the standard-bearer for the industry. “While not one to seek the limelight,” Clapp concurs, “the cinemas that he has helped establish and develop speak for themselves as achievements of a man of singular vision and commitment. I join colleagues at UNIC and further afield in congratulating Alan on this much-deserved award.”
In turn, McNair acknowledges his colleagues at Vue—chief executive officer Tim Richards and chief operating officer Steve Knibbs—and those across the industry, past and present. “Within our team, Tim and Steve are in the public eye more often than I, and I am perfectly happy with that. As you know, I have been in the business for many years. Being recognized by peers and colleagues in this great industry as being worthy of an award like this is very satisfying. I have enjoyed—and continue to love—working in this fantastic business and am delighted to be receiving this award.”
Looking back over the past 35 years (for more biographical detail, please refer to our sidebar), McNair is equally grateful for the support he has received. “It is a combination of people,” he says about those who inspired him. “I have been lucky to have worked with lots of great people – Millard Ochs, Chuck Wesoky, Joe Peixoto and Pepe Batlle to name a few. Some of these have been similarly honored and have all contributed different elements to the way that we do things today. They have certainly helped define how I feel about the business, how I look at the business; what is important and what is less so.”
Asked about what, in fact, is important to him, McNair shares his personal motto. “Treat people with respect and treat them as you would like to be treated yourself.” Calling upon his Scottish origins, he also believes that hard work will reap its own reward. “I think you need a little bit of luck, with the right time and right place playing critical parts of that. But I do believe that if you work hard on the right things, then you will be successful.”
And working hard in both international video distribution—effectively creating the home-entertainment business abroad—and reviving global exhibition, we assume McNair knows what the right things to do are. Especially when it comes to windows, which have become top of everybody’s mind once again. Film Journal International spoke with McNair right after DreamWorks’ animation master—and newly installed Commander of the Order of Arts and Letters and upcoming CineEurope guest—Jeffrey Katzenberg shared his latest thoughts on the future of filmed entertainment. “Having worked across multiple parts of the industry, you tend to be more aware of the various sides of the argument,” McNair contends. “You understand at least the total process and where people are coming from when they have those discussions. It does not make any of those discussions any easier,” he concedes. And while “windows have not really changed a lot in the recent past, [Katzenberg is now] suggesting that windows are going to change dramatically.” McNair thinks “that will only happen if the pie overall gets bigger for everyone involved.”
“Cinema exhibition has proven to be a real driver of growth worldwide and a key element in the value chain. If anything, it is solidifying its position as being a leading driver and nothing yet has led me to believe that there is going to be a large-scale reduction in windows. But everybody can be proven wrong,” McNair cautions. Still, he asserts that Vue would not “continue to invest heavily in the business…if we believed that there is going to be a dramatic change in windows that would materially and adversely affect our future results.”
McNair also knows the playing field. “We are in a pretty competitive market at the moment with increasing amounts of available entertainment avenues like cable, Netflix, etc. As cinema exhibitors, we have to continually up our game with our customers in order to compete effectively.” He goes on to name “innovation and new product offerings, different ways of doing things” as key drivers. “More choice, more comfortable, high-quality theatres with state-of-the-art sound and projection are all really important factors in getting people out of their homes.” Exhibitors have to make the consumer decision “as easy as we possibly can, offering different ways to buy tickets and book seats, etc. Also, when they get to the cinema, we need to make it hassle-free again, as comfortable as we possibly can, and as much fun and satisfying as we can.”
Pointing to Vue’s investments in Sony 4K and “into better sound systems,” digital and technology play “a big part” in creating an exceptional experience. “Again, this is our response to the increasing levels of sophistication in in-house entertainment. We need to compete and continue to innovate, so that cinema remains the best place to see new movies. Our unique selling point is the outstanding social aspect of seeing a film on a fantastic screen, in a state-of-the-art auditorium, with a whole bundle-load of other people. That’s why people go out, because it is a social occasion.”
McNair adds, “We need to provide fantastic entertainment and value for money; and that does not necessarily mean cheap. It just means that whatever you are selling is appropriately priced. Cinema tickets in the U.K. range from £2 to £20 upwards [US$33.60 or €24.55]. The value for money can be perceived at both of those amounts, depending on the customer, their needs and desires. This is a trend in our business and there will be more attention paid to tailoring experiences to deliver against these consumer needs.”
By way of example, McNair brings up Amazon recommendations. “I tend to read them and occasionally it triggers an action. Sometimes you delete the e-mail but it is enough to keep engagement. That works for me as a consumer and I believe we can do the same thing in the cinema business: ‘If you saw this film, then you should really come to this new one next week. Book now.’”
When he talks about tailoring the experience, does McNair foresee different types of cinemas or different types of auditoriums under the same multiplex roof? “One of the challenges for our business is that cinemas are quite big land users… Given the kind of lease arrangements that we have, the speed with which you can transform is relatively slow. So I do not think you are going to see a very fast transfer to different formats. It will take time for any change like that to come. Meanwhile, we are not afraid to test new experiences or viewing experiences. One such example is ‘Scene’ at Vue Westfield, where we offer a premium experience at a premium price, which has proved successful at that location. The success lies in implementing ideas appropriately for the level of demand that they could have. Some of them are niche markets and others are more popular markets and they should be dealt with accordingly.”
The same goes for another recent trend in exhibition that McNair does not favor. And why should he, if he can have his favorite movie snack of a vanilla milkshake and chocolate raisins at Vue? “In-theatre dining? I am personally not too much of a fan. I think that having people wandering around in an auditorium when you are trying to concentrate on the movie is not something that personally appeals to me. This said, we should allow consumers to make that choice. So if our guests find it appealing and there are sufficient numbers of them, then there is no reason to why we should not provide in-theatre dining. But at the moment we have no plans in that area.”
Plans for event cinema and alternative content, which are another key element to McNair’s view about satisfying the interests of different consumers, have been advancing nicely. “Digital is a fantastic opportunity for us to be offering more choices to our consumers. Alternative content, after a slow start, is gathering pace and is very well-received in the U.K. We’re delighted that we have been at the forefront of driving the success of these screenings in our cinemas.”
Addressing the corporate view now, we wanted to know where Vue is headed with managing over 150 sites across nine different countries. The growth strategy is indeed about getting bigger, he attests, bringing out his CFO side. With Omers Private Equity Inc. and Alberta Investment Management, two Canadian pension-fund managers, on board as shareholders since July of last year, and entering “into the high-yield bond market, which is a first for us,” McNair is setting the path. “That is a very deliberate strategy to enable us to make sure that we have access to capital to continue to do what we have been doing over the last ten years or so. Namely, continuing to grow by building new sites but also, when there are potential acquisitions, to go out and make those acquisitions. Certainly, that strategy remains as true today as it was when we set up the business.”
With the focus on catering to the consumer in all areas and across several countries, could size and reach not be counterproductive to knowing your guests? “I think you need both,” he responds. “You definitely need to be close to your customers. I would find it difficult to run a business in Germany from the U.K., or from different jurisdictions. So, the people that are running the business for you need to be close to their customers. But obviously, scale gets you economic benefits whether it is in buying power for popcorn or cola… There are definitely certain areas where you get economies of scale.”
Another advantage McNair sees is in the transfer of best practices across the network. “We are certainly finding that we can take the best ideas working in any one market and exporting them into other markets in order to enhance, not only the cinema experience but also the financial returns across all our markets… As you get better, you need to focus more attention on making sure that the best-practice transfer is actually happening and that you are getting the good ideas talked about, discussed, and then moved across different countries. Now, they may change to be specifically appropriate to the local circumstances and regulations and such like. But it is important that knowledge transfer is openly talked about and discussed and taken on board by everybody. We are working very hard to make sure that our various businesses are not silos on their own and that they feel part of an overall group, an overall family with one goal, which is to serve our customers well and to serve our stakeholders well.”
In view of the many movie theatres McNair has been involved with over the years, where does he feel served well? “I think we have a fantastic theatre at Vue Westfield. Every time I go there, I so enjoy it. It’s a really, really fantastic theatre." While this London location covers roughly 120,000 square feet (11,150 sq. m.), Vue also has “a very nice cinema” at Newbury which is 19,000 square feet (1,765 sq. m.). “So you can fit six of them into the Westfield location. Both are what is appropriate for the people of their locations and the cinema experience is pretty much the same when you are sitting in any of our auditoria. We do not deal with them any differently, whether they are in a small theatre location or in an exceedingly larger one. The quality of what we are delivering and the consumer experience will be the same.”
What UCI delivered to the city of Leipzig, Germany, “shortly after the Wall came down,” still represents a special memory to him. “It was just a blow-away success and part of that was timing because we were very early into the market. But the response of the East Germans to an offering like that was just very satisfying.” Equally memorable, though for a very different reason, was “a premiere with Princess Anne when UCI opened the Whiteleys Cinema in London,” he says. “The film projector broke down midway through the film. We got the film going, thank goodness, but again it sticks in your mind because you prefer that not to happen.”
Asked for any other parting words, McNair respectfully declines. “I’m kind of a reticent interviewee actually, aren’t I?” While FJI will leave that for our readers to decide, this author did ask him again and had success. “Retail businesses like ours live and die by providing customers with something that they want. I think that is what we have to remember when we are having discussions between exhibition and distribution and you are not agreeing on the price or the way it is being advertised. But the endpoint here is that the film needs to be great, the environment that they see it in needs to be great. If that happens, then the filmmakers, exhibition and distribution will continue to thrive. We all need to look after our customers.”
More About Alan McNair
Alan McNair says The Swiss Family Robinson in Woking, Surrey, was the first film he ever saw, but his most essential movie memory came decades later. “I love the first 20 minutes of Saving Private Ryan. I think that is just the best 20 minutes that I have ever seen. It’s fantastic.” But not so much the rest? “You can’t compete with that opening sequence. The randomness of whether you are standing in the right place or not was just ultra, ultra-powerful.”
During the past 35 years, Vue Entertainment’s deputy chief executive officer and chief financial officer has gained wide experience in many international markets, first in film distribution in 1979, followed by video distribution and, since 1987, international cinema exhibition. Prior to joining Vue, McNair held the position of executive VP and chief financial officer of United Cinemas International (UCI) worldwide. He had joined UCI at its inception in 1989 when the company was only operating a handful of cinemas in the U.K., and as CFO he helped steer them to become one of the largest and most successful cinema operators, with cinemas in the U.K., Ireland, Germany, Austria, Spain, Portugal, Italy, Poland, Japan and Brazil.
In 1999, McNair joined the fledgling venture-capital-backed company SBC International Cinemas, where with Tim Richards he built the business to acquire 36 Warner Village Cinemas and rebranded as Vue Entertainment.
Since 2003, McNair has held the position of CFO and deputy CEO to Richards. During those past 14 years, Vue has become a world-class operator and developer of state-of-the-art multiplex cinemas known for their market-leading innovations and analytical approach to business. Following the acquisitions of CinemaxX in July 2012 and Multikino in August 2013, Vue Entertainment now operates over 151 cinemas with 1,368 screens and over 250,000 seats in the U.K., Germany, Ireland, Denmark, Poland, Portugal, Latvia, Lithuania and Taiwan.
Since inception, Vue cinemas have served:
40 million liters of soft drinks (10.57 million gallons U.S.)
40 million portions of popcorn
22 million scoops of ice cream
In 2013, Vue had admissions of 62 million guests and £571 million in group turnover (US$960.8 mil; €700 mil.).
In Praise of Alan McNair
Andrew Cripps, President, EMEA, Imax Corporation:
“I have known and worked with Alan McNair for almost 25 years and counting, first at UCI and since then at Vue. Alan is a very savvy financial executive and has the ability to look at a transaction or deal in a myriad of ways that the creator of the deal probably never envisaged. He has been instrumental to the success in Europe of both UCI and now Vue and is one of those executives that shuns the limelight but does an immense amount of work in the background. He is thoroughly deserving of this award and I am sure under his stewardship Vue will continue to grow and go on to even bigger and better things. Congratulations, Alan!”
Jose Batlle, Former CEO, ODEON & UCI Cinemas:
“I met Alan in 1991 and had the opportunity to see him in different aspects: as a colleague, as a boss, as a competitor, but above all as a person. He is one of the best men that I have ever met, in every aspect: good companion, good leader, fair competitor and excellent guy. He deserves to be the Exhibitor of the Year and deserved this honor a long time ago. Congratulations, Alan.”
David McIntosh, VP for Europe and the Americas, Sony Digital Cinema 4K Solutions:
“There’s no doubt about it. The cinema exhibition business owes a huge debt to Alan’s single-minded vision and his relentless drive to move the game forward and ensure moviegoers get the best possible cinema experience.
Vue Entertainment has forged a formidable reputation for its commitment to technological innovation, and I’m delighted that Sony 4K has played a key role in supporting its rapid digitalization.
Discussions with Alan are always enjoyable and refreshingly straightforward. We sit down and listen carefully to each other’s viewpoint and his clear analysis and understanding ensures we find the best result.
He’s richly deserving of his recognition as 2014 International Exhibitor of the Year. Congratulations from us all at Sony!”
Joe Peixoto, Strategic Advisor, TimePlay Inc.:
“I have had the pleasure of knowing Alain McNair since 1997. We met when we worked together at UCI. So for 20 years I have watched with great admiration his many achievements. But the measure of Alan is not only from his career but his ability to balance his family, his interests and his business. He has accomplished all of these with integrity, perseverance and wisdom. The industry has benefited from his vision and we have benefited from friendship. Today, I am proud and honored to salute Alan."