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Podcast: Cinemark CEO Mark Zoradi On VR, Esports and the Future of Movie Theaters

With the possible exception of music, perhaps no corner of the entertainment business has faced more intractable challenges from tech-driven changes in our culture, lifestyle and consumption habits than the theatrical exhibition business, that thing most people call going to the movies.

Simply put, even during good years such as 2018, recent growth in domestic box office grosses has been driven largely by higher ticket prices. Yes, the industry had a very good 2018, bringing in a record $11.85 billion in 2018, according to the National Association of Theater Owners. And yes, ticket sales were up 5.3 percent, after a crummy 2017, but they generally have been largely flat in recent years. A 1.5-percent hike in average ticket prices once again helped boost overall box office.

Also unknown, what percentage of theater goers went to see Netflix projects such as triple-Oscar winner Roma by Best Director winner Alfonso Cuaron. The streaming giant made modest accommodations for Cuaron and other big-name directors this awards season with brief theatrical-only runs (and spent mammoth sums – Variety estimated as much as $25 million – to push its candidacy)

Though Netflix reported no box office returns, estimates for Roma ran as high as $3.5 million in the United States and Canada. Still a small number, but not bad for a black-and-white, foreign-language film starring a first-time lead actress playing a maid in 1970s Mexico City.

And as almost always happens with Netflix, outsiders probably will never know for sure how many people stayed home to watch those big movies instead of going to theaters. Another of the Netflix projects to get a theater-only run was Susanne Bier’s horror film Bird Box, starring Sandra Bullock. The company did release viewership data on that movie, saying an eye-popping 80 million subscriber homes watched the film in its first four weeks of release.

Cinemark Theatres CEO virtual reality esports large format XD

Cinemark Theatres CEO Mark Zoradi

All of which is to say traditional theaters are having to adapt, a lot, to the new world. They’re experimenting with a wide range of improvements and new kinds of entertainment ventures to entice people to come their facilities and spend money on more than just movies.

That brings us to Mark Zoradi, a Los Angeles native and long-time Disney hand who four years ago became CEO of Cinemark Theatres. The Texas-based chain is third-largest in the United States, with about 4,500 screens, and the biggest in South and Central America, with another 1,500 screens in 15 countries.

Zoradi joined me on this Oscar Week podcast for Bloom in Tech, talking about the future of the exhibition business, and how Cinemark is trying to expand in a number of directions with new kinds of experiences and ways to make money, all while continuing to edge up its dividends and manage its holdings prudently in a tempestuous market.

podcast logo Bloom in TechUnder Zoradi, the company invested in Super League Gaming and has been offering esports experiences for tweens (with Minecraft) and teens (with League of Legends and other titles).

Late last year, Cinemark opened its first virtual-reality experience, carving out space in the lobby of one of its Dallas theaters for The Void, which counts Disney as its biggest shareholder and provider of intellectual property, including VR experiences built on the Star Wars and Ralph Wrecks the Internet franchises. And earlier this month, the company opened another VR experience, based on the Terminator franchise from SPACES, whose backers include Comcast.

The company has also invested heavily in makeovers of most of its theaters, beefed up its food and beverage offerings, championed its own large-format IMAX competitor, XD, and begun selling movie-related merchandise. We had a fascinating discussion about Zoradi’s efforts to help his company adapt a century-old business model for the opportunities and challenges of now.

You can listen to this Bloom in Tech episode on Anchor, where it’s hosted and syndicated, as well as on pretty much all the big audio outlets and several smaller ones, including iTunes,  Spotify (which just bought Anchor, but don’t ask me how that’s going to work), Google PodcastsBreakerRadioPublicOvercastCastboxPocket Casts, and Podbean. Please share, rate and review if you like what we’re doing. It really helps with that algorithm thingy.