Cinemark CMO explains how theaters are luring in cash-strapped audiences

Things are now looking up for the Texas-based company and the film industry as a whole. For the first half of the year, the company reported about $1.5 billion in total revenue, a 13% year-over-year increase, according to financial filings. The company has 304 theaters in the U.S. and 193 in Latin America. It reported about 95 million guests in 14 countries in the first half of the year, up 5%.

Cinemark’s paid membership program, the Cinemark Movie Club, hit 1.45 million members in the second quarter, up 12% from the same quarter last year and more than 50% from 2019. Those members represented 30% of its North American box office in the quarter. Loyalty program members as a whole — including free members as well as paid — represented more than 55% of its second-quarter box office.

Fearing spoke with Modern Retail about how consumer demand looks in the industry now and what other retailers can learn from the company’s loyalty and membership programs. This conversation has been edited for length and clarity.

How does consumer demand look at theaters this year compared to previous years?

“I think consumer demand is coming back. Since Covid, we’re getting the flow of content back. We had a lull for a couple of years in content flow from the studios because of Covid. … And then we had the writer’s strike and then the actors strike in ‘23. … We’re not quite back to total content. We’re projecting we’ll be back at the same quantity of film in 2026.

But, the amazing thing is that consumers are dying to get out of their houses and come to our great immersive experience. On some of these big weekends, with some of these big blockbusters, we’ve broken records that were even pre-Covid. The ‘Minecraft’ movie in April was huge. It was our biggest three-day opening of all time for a family film, so we felt really amazed about that. Plus, “Lilo and Stitch” and ‘Mission Impossible’ — that was the biggest Memorial Day weekend box office of all time. We see a lot of great indicators to us, and it’s across genres.”

Considering that customers are often holding back on discretionary purchases, why are they still willing to come to the theater?

“During the down cycles, everyone still comes to the movies. We are the most affordable out-of-home experience there is: to go to the movies with your family. I liken it to when I was at Neiman Marcus. We always knew in recessions that everyone would buy up lipstick, because the lipstick was an affordable way to have a pick-me-up.

We’re an affordable way to have a pick-me-up and get out of the home. We’re less expensive than the concert, we’re less expensive than a ball game. You can come and have a great evening out with us. So, we don’t usually see a dip in business in these kinds of times.”

How do you see that in your data?

“They’re coming out of the home because we’re an affordable experience. But at the same time, while they’re doing that, they’re upgrading to all of our premium experiences, too. They’re adding on our XD — our huge, expensive screens — and our D-BOX [seats that move and vibrate]. We’ve seen the most growth in those areas. So it’s like a premiumization trend. Even though they’re going out and we’re affordable, they’re paying that $2, $3, $4 upcharge. … Our loyalty program for Movie Club has continued to grow.

Even though the economy is as it is, you would think that we would see churn on those members, and some wouldn’t want to pay their $10.99 or $11.99 price point [depending on state]. Churn is at an all time low, plus growth is at an all-time high. … All of those things together are indicators to us that our customers still value a great night out, especially in economic downturns.”

How is your membership program going, and how are you investing in it?

“Movie Fan [free loyalty program] and Movie Club [paid membership] are at 55% of our penetration of sales now. When I started, they were at, like, 16%. … We’ve really been able to grow and expand because we listen to our customers. … We launch new innovation every year. We just launched badges for our members with fun [messages], like, ‘I saw seven movies in seven days,’ when you go into the mobile app.

Since the beginning of the year, [members] have checked their badge status and how many badges they’ve earned 450,000 times, which is kind of phenomenal. We had a sweepstakes for, like, a family-of-four trip to Hawaii, partnering with ‘Lilo and Stitch’ and Disney, and we had 120,000 entries. We gave a date-night-for-a-year sweepstakes, and we had 141,000 entries. So we do fun things to keep those members really engaged. … We’re just always looking at it and trying to innovate and keep them engaged.”

What would you tell other retailers, as far as how to achieve that level of penetration from your loyalty program?

“Know your customer, take care of your customer, know their needs, and create programs that answer the questions of their needs. … If you take care of the customer, the dollars follow. Customers come first.”

What kind of investments have you made in your theatres to boost demand?

“Renovating theatres, adding D-BOX, … and we’re rolling out ScreenX, which is this 270-degree panoramic-wrap screen. … We’re rolling out digital and laser projections. … We’re the most highly reclined fleet, because we believe that if you’re going to leave your house, you want a seat that’s as comfortable as your seat at home. … I think now 70% of our fleet is reclined, heated seats.

And then, we brought in food and beverage. People want the whole experience, so we have hot foods. …. I think 60% of our fleet now serves alcohol. Over the last five years, we’ve just been upping the ante on all of those experiential things. And then, simultaneously, we invested in that frictionless experience for the customer.

From the time someone thinks about going to the movie to the time they get home, we like all of those friction points to be taken away. So, we’ve invested a lot in our mobile app and web. … We’re doing so many things in that web and app to personalize it to recommend movies to you. We’re giving you push messages about your concession ordering. … We’re letting you order your concessions up front through the mobile app when you order your tickets. …

We’re doing third-party delivery so you can deliver popcorn to your home if you want to watch the football game. … We’re thinking about, ‘How do we touch our customers in and out of home?’ … All of the merchandise that we’ve added over the last couple of years makes a big difference.”

What are the biggest challenges for you as a marketer this year?

“Everyone’s on every device and every platform, and your dollars have to spread and [you have to] figure out how to target and find your customer base and talk to them. … We’re working on a whole creator campaign and hiring influencers at scale to tell the stories about the immersive [experience] and the love of moviegoing.

[We’re] using AI to figure out our algorithms and marketing and how to be more productive, and we’re getting it to change the scale and the pace of our media spending in real time when something starts taking off.”