Ellis Jacob (Photo: Nathan Denette/The Canadian Press)


The ever-evolving movie theatre

TV was supposed to kill off movie theatres, then DVD players were going to snuff them out. Now Netflix and streaming are the looming threats. Cineplex CEO Ellis Jacob, BCom’74, explains why he isn’t all that worried about the future of the movie business or his 164 theatres.

Story by John Allemang

March 2019

Movie theatres have been a thing of the past for a very long time. TV was going to kill them off, then VCRs and DVDs would do the deed. Now it’s Netflix and streaming, and in a few years some new wonder will be so immediately gratifying that we will never leave the comforts of home for a dark room that’s crowded with strangers and perfumed by popcorn.

Ellis Jacob’s job as president and CEO of Cineplex Entertainment is to convince you that everything you hear about the grim future of his industry is wrong – and that you really want to be part of the outsized experience his 164 theatres provide to some 77 million patrons annually.

Defying conventional thinking, declining ticket sales and a downward-trending stock price, Jacob, BCom’74, insists on seeing these non-stop challenges as stimulating opportunities.

“You have to be an optimist,” he says. “When I started in this business nearly 32 years ago, everybody said, ‘Are you crazy, this business is going to be dead and done in two years.’ Thirty-two years later, we’re still here and doing really well.”

That optimism surfaces almost immediately in a late-winter interview complicated by a fierce snowstorm that brought Toronto to a standstill. Who thinks about movies when the weather is doing its worst?

“Weather is a factor when it is really rough out there,” he allows. “But sometimes it can also be a great escape. People don’t want to be hibernating in their homes.”

Getting people out of their houses is the essence of his job, and he acknowledges that the competition from new technology is straining his normally optimistic nature. “We’re a little bit paranoid here, so we’re always thinking about the next disruption that’s going to happen,” he says. “We’ve tried to deal with that by moving more from being just a cinema company to being an entertainment destination.”

His own favourite movie is The Shawshank Redemption, and when asked why, he responds, “It’s a great story, it talks about the underdog.” Cineplex is an unlikely underdog with its 1,676 screens across Canada, but its dominance starts from an engrained attitude that the company must never stop adapting.

Beyond the standard Hollywood fare, Cineplex theatres have expanded the company’s demographic range in recent years by showing live operas from the Met, NFL games and the latest Bollywood movies – Mr. Jacob was born in Kolkata, and has a soft spot for Indian films, but his programming choices are grounded in the rich data of purchase habits accumulated through Cineplex’s 10-million-strong loyalty program.

The company added Xscape entertainment centres that feature party rooms, loot bags and 80 interactive games including virtual bowling. The Rec Room, catering to an older crowd, offers axe-throwing, karaoke, board-game nights, virtual-reality experiences and Pinot Noir by the glass.

Cineplex theatres host lucrative eSports competitions, filling venues that would otherwise be empty during the day. Jacob, by chatting with patrons as he likes to do, was astonished to discover this new entertainment offering was attracting professional scouts looking to sign up the best players. The company introduced its own restaurant chain called Outtakes, a popcorn-themed restaurant named Poptopia and a yogurt café. Topgolf driving-range sports bars are in the works, yet another version of what the future of an evolving movie-theatre chain might look like.

“It’s all about differentiation from your home,” says Jacob.

The one failure he’ll cheerfully admit to is an in-theatre child-minding service, which Canadian parents resisted en masse. “What’s good about our business, you try it in one place and if it doesn’t work, you move on,” he says.

Movie-goers remain the core audience, and he boasts that people who used to be restricted to 2D and IMAX can now see films in eight different formats, encompassing 3D visual and audio components, wall-to-wall screens and individual motion effects, as well as creature comforts such as reclining leather seats with table service.

For potential customers who still prefer to stay home, Cineplex has a video-on-demand business with 9,000 movies. A partnership with UberEats provides home delivery of movie-house popcorn, candy and drinks to replicate what Jacob calls “the genuine experience” of the theatre – a low-tech version of virtual reality.

He happily admits that he foresaw none of this when he came to Montreal in 1967, aged 15, to attend his sister’s wedding – and decided to stay. Somehow he talked his way into Dawson College, despite a transcript the registrar found indecipherable, then moved on to McGill to study commerce before becoming a chartered accountant.

Finance was his preoccupation at McGill, and he found great pleasure in running the student investment club. “I tried a few things from a sports perspective,” he adds when pressed about non-business interests. “I was bad at skiing, coming from India. I remember going with a group to Mont-Sainte-Anne, saying, this looks like an easy sport. I put on the skis at the top of the hill, tried going down, and the first thing I knew I was sitting in the middle of the tree. So I walked to the chalet and said, ‘See you guys later.’”

He didn’t shift into the movie business until 1987, as a calming presence during a previous, more chaotic, iteration of Cineplex. But after 32 years of defying his industry’s doubters, he’s confident movie theatres can fend off streaming and whatever else the future brings. “It’s no different from saying, why do people go to hockey or baseball games? Because you want to be part of the experience. Sitting at home, you’re not a part of it. To me, the social aspect is absolutely critical.”

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