"We're fixing that."
That's the refrain from Gerardo "Gerry" Lopez, who was installed last month as chief executive at AMC Entertainment Inc., about how the second-biggest movie theater chain in the country must adapt to keep pace with shifts in consumer habits.
Lopez has a few opinions -- not all of them kind -- about the movie theater business, which hasn't radically changed the way it does business in decades. He's an outsider: Lopez has spent his career in the food and beverage industry, most recently as a top executive at coffee giant Starbucks Corp.
Lopez was interviewed at ShoWest, the industry's annual trade event, in Las Vegas this week. No popcorn was served.
Are you shocked you can't buy an espresso in most theaters?
Blown away. But we're fixing that.
Would you agree that concession stands haven't kept pace with consumer tastes?
We're going to change that. It's not going to happen in all 302 theaters overnight. Drive down any main street in America today and look at how many options there are for food. The way the American palate has evolved over the last 15 years has been far quicker and much more diverse than the way the concession stand has evolved. Concession to me speaks of popcorn and Coke. You will see us accelerate our efforts in what we call "enhanced food and beverage." There's so much more you can offer.
Are we talking sushi?
Anything from a complete meal all the way down to a concession stand serving hot foods. Starbucks has done a great job selling snacks that go well beyond coffee. We can try to sell a new variety of foods that moviegoers have never experienced before. At the other end, you can take a 300,000-square-foot megaplex and convert a couple of theaters that may not be giving you the capacity you want, and redesign your house so that you provide a complete restaurant experience. That way, the guest, instead of having to go to two locations for dinner and a movie, can go to just one location.
What grade would you give theaters for how well they've marketed the movies they show?
B or B-minus. Theaters have focused, perhaps correctly, much more on operations than on marketing.
So what can theaters begin doing to better market their own movies?
The industry has to start thinking about using Facebook and Twitter.
Screenings of operas in movie theaters have been a hit. Why haven't movie theaters done more to show concerts and sporting events? Isn't that a big missed opportunity?
No doubt we need to do more of those events. I'm not sure why on Jan. 20, on such a historic day [President Obama's inauguration], every theater in America did not have a couple of [screens] for people to congregate and watch history. We have a college basketball game in Detroit on Monday [the NCAA finals] that you might have heard of. Can you imagine if we took a theater in Michigan on Monday night, when a theater would otherwise sit idle, and provided seats for 350 fans? That's not going to be a party? I'm sure there are a hundred different kinds of rights hurdles that would need to be overcome.
The country is in a deep recession and consumers are tapped out. But it now costs $10-plus for movie tickets in many cities. Why not cut ticket prices?
We're offering customers more options than ever before to save money through loyalty programs and discounts for early viewings. The fact of the matter is the moviegoing industry provides the best entertainment value out there, compared to, say, taking the family to a baseball or basketball game.
You've worked at Starbucks, Frito-Lay, Pepsi-Cola and Procter & Gamble. What made you want to go into the most mature, some would say stagnant, business in entertainment?
The industry is at a crossroads, and we have the opportunity to take the experience that the moviegoing public currently enjoys to the next level. I spent the last 24 1/2 years collecting all these experiences in all these different industries, so when this opportunity came along, it was kind of a neat way to apply some of those experiences. You have digital technology that has the potential to be as revolutionary as anything the industry has ever done.
Jeffrey Katzenberg, whose DreamWorks Animation released last weekend's "Monsters vs. Aliens" in 3-D, thinks 3-D is going to transform the movie industry. Is he right?
Yes. It brings a level of engagement to the moviegoing public that we don't have any other way to provide. I agree with him that it's akin to [the advent of] sound and color.
Hollywood has some 40 3-D movies in the pipeline, and AMC just signed a deal to equip up to 1,500 screens with 3-D systems. What's a realistic market for 3-D?
I don't know. We're in the very early stages. How high is high? It's an unknown. What we do know is that if we don't continue to differentiate ourselves from all the alternatives and options that customers have for how they spend their time and their dollars, we are going to be in trouble.
What can a movie theater company learn from Starbucks?
At Starbucks, the key to success was engaging the customers in an unexpected way. The movie industry and exhibitors can look at that model and learn how to engage the customers early and more completely. For example, when does a moviegoing experience begin? When you show up at the theater, or when you decide to place a phone call for show times? Does it end when the movie is over and you go back to the parking lot? I'm not sure the industry has ever endeavored to understand the entire experience from beginning to end in a comprehensive way.