The Centrepiece interview: Cineworld CEO Eduardo Acuna on bankruptcy recovery, ticket prices and 2024 slate

Nine months after he joined Cineworld as CEO, Eduardo Acuna is striking an upbeat note about future prospects for the cinema operator. The group currently operates in 10 countries with 751 sites and 9,189 screens — and like other big cinema outfits, it has been through tumultuous times in the Covid period. The affable Acuna took up the reins last July after serving as president of Cinepolis Americas (overseeing operations in 11 countries across North and South America). He is confident that Cineworld Group, which emerged from Chapter 11 bankruptcy protection last summer, is now well placed to prosper. It has “one of the healthiest balance sheets in the industry” and the “debt load was significantly reduced” during Chapter 11 in the US, he says.

Mexico-born Acuna came into the company keen to foster stability when veteran Israeli exhibition executive Mooky Greidinger and his brother Israel stepped down from Cineworld last summer, after almost a decade at the helm. “Some people have left but I wouldn’t say it’s a significant number,” says Acuna. “I didn’t come in here and fire everybody. There were some cases in which changes needed to be made but they were very, very few.”

Acuna arrives as a business leader widely praised for his work at Cine­polis, which started as a Mexican family cinema 50 years ago but has grown rapidly. He has held positions at McKinsey in Mexico and Argentina, Goldman Sachs in New York, the Bank of Mexico and Mexico’s Ministry of Social Development. He took his MBA at Harvard Business School.

Speaking to Screen International from the US headquarters in Knoxville, Tennessee, the new Cineworld CEO states his management style as “being open and accessible and, most importantly, telling the truth”.

What was it like arriving last July, and how was morale?
I think it was very positive. People were obviously very concerned about what the future was going to hold for the company. They’d come out of a very traumatic experience. It was Covid and the company had had to go through bankruptcy Chapter 11 in the US. My first day on the job was the day we emerged from bankruptcy. It was my welcome to the company. My first thing was [to organise] a massive town hall and Zoom call with every theatre manager and support office employee in the US, UK and in the rest of central and eastern Europe and Israel. I told them my vision has always been to put the customer at the centre of anything. I wanted to talk to everybody and make myself accessible. I gave everybody my email. My first day on the job was right after the ‘Barbenheimer’ weekend, and so of course I took the opportunity to take full responsibility for that big success!

Other exhibitors are cautioning that after the Hollywood strikes, the 2024 film slate looks a little thin. Do you agree?
I am optimistic about 2024. Is 2024 going to be the same as 2023? Most likely it is not going to be. But there are things that are surprising us. Dune: Part Two overperformed significantly, and Kung Fu Panda 4 is doing great. We are seeing better numbers than expected. The end of the year looks pretty good. If you think about it, it looks a bit crowded. It’s a pretty problem to have. Between the problem of not having movies or having too many movies piling up on dates, I would rather have the latter.

So could it return to pre-pandemic levels?
One of the things I often don’t appreciate about our industry is that we try to compare ourselves to 2019 and if we don’t get there, then there’s this narrative that we haven’t recovered. To compare yourself to a record-breaking year is probably not the healthiest thing to do. I would say we are on a very healthy path to recovery. We did have a major hiccup with the actors and writers strikes. There is no denying that. But I want to consider it a hiccup and not a narrative that our industry is suffering.

The strikes did have an effect on our industry that probably will make 2024 not as good as 2023 but that doesn’t mean it’s going to be bad or that in our budget we’re going to lose money. By no means. We are actually going to have a good, financially sound year with a very good EBITDA margin and positive cashflow.

Are you concerned about upcoming slate awareness among cinema­goers? Are the studios spending enough to market their films?
I would be afraid to say they’re not providing the level of marketing support that they need to. I would love them to spend more money. But we have also been co-operating with the studios to market their films as much as we can with the resources we have. There is no doubt that the more you market a film, the better it does. But I would say the issue is more the quantity of films.

And what about the theatrical window?
Studios have this data, we have this data — the bigger the theatrical window, the higher the revenue potential for the movie. This is not just talk. You can see it in several studies. More importantly, you can actually see it in studios’ behaviour. You can see there are films that in the past would have been released on streaming earlier, but they have not been released on streaming yet. You’ll see that films that could probably have had a very short window of under 45 days are [now] going more than 45 days.

The Covid pandemic provided the perfect time for all these experiments and the window went to zero as theatres were closed. Then you had experiments with day-and-date, 17 days, 30 days, 45 days — and now you’re seeing the window going up again.

Will you play movies from streamers?
If we get offered a title from whomever day and date with streaming, I don’t think we will play it because I don’t think it does anybody any good. Do we play streamer titles with shorter windows? I don’t know. This is part of the dynamics of our industry. Our industry used to have a long theatrical exclusivity window and then you negotiate terms with the studios. Well, maybe the window should be part of the terms. If someone says, “Well, I’m a streamer, I really want this film to be exclusively in theatres for a very short period of time and then I want to release it on my platform,” that means your film terms will be significantly lower than for a film with a long theatrical window. We always get pinned as enemies, theatres and streamers. I don’t think that is the case. We are complementary.

What is the optimum window from your point of view?
I would tell you the minimum is 45 days but that’s a minimum. That’s not the ideal. I can’t give you an actual number but you see if the theatrical exclusivity window is larger, the movie performs better in theatrical and then it performs better in streaming and the other windows.

What worries you most about current business practices?
It’s whether we made a mistake and educated our customers that if they didn’t go to a theatre to see a movie, the movie would be on TV very soon. It’s impossible to prove this through analysis, but it is a concern of mine. All of this experimenting happened after Covid and the theatrical window was reduced. The more we educate our customers that if you don’t see it in theatres, it’ll take a long time to see it at home, that is going to improve our results and the studios’ results.

What are your feelings about premium-large format? Is Cineworld downsizing some of its bigger sites, reducing screens and putting more emphasis on Imax, 4DX?
We have to do as much as we can to provide the best product for every customer, the best we can. There is no one answer. There are movies that Imax is fantastic for — you saw that with Dune: Part Two. The Imax screens significantly over-performed every other screen. We had amazing results. That is a perfect movie for Imax. There are other movies that over-perform on 4DX. We’ve had great results with 4DX and just opened a few weeks ago the largest 4DX auditorium in the world in Times Square. We’ve also seen great results when you have recliners and very comfortable seats.

Your predecessor Mookie Greidinger wasn’t a fan of reclining seats but is it correct that you’re putting them into more sites?
I am not saying I am putting them everywhere. I am saying we are analysing every single site. The first thing I told you is that we are listening to our customers. Our customers do say they want comfortable seats and our customers vote with their wallets. We see that when we don’t have recliners and our competition does, in some weeks we lose market share. On the other hand, when there are very big films like Dune: Part Two or with Barbenheimer, we have the larger capacity [without recliners] and our market share shoots up. I am not a believer of one size fits all. [But] I will tell you we will more likely than not do many, many more recliners than before because we hear from our customers loud and clear that is what they want. 

Is it easy to convert old buildings for big-screen formats — or indeed for other purposes?
I will tell you what my construction team tells me. Everything can be done. We are definitely analysing this. There are some locations that may have too many screens and we don’t have that many movies any more. We have sites with 26 screens. Do customers really need 26 screens? Sometimes it’s good because we can play a lot of movies for longer but sometimes not.

And so we are analysing the possibility of those very big sites having some of those screens converted to something else. You’ve seen everything in the industry — bowling alleys, video-game arcades, axe-throwing. I think the latest I saw was people installing pickleball courts in a theatre.

So axe-throwing and pickleball are on the Cineworld agenda?
We may [install them]. If we find a concept we believe in that has a good return on investment and is the best place to put our dollars, we will put our dollars in it.

As healthy as our balance sheet is right now, we still have a limited amount of dollars. There is a lot of maintenance — a lot of theatres that are older right now in our portfolio and we need to give them some love. Whether it is converting to recliners, improving our projection, our sound or HVAC [heating, ventilation and air conditioning] units, that is probably investment dollars that will give us a big return.

If we find a site where we think it would be perfect to test a concept of doing something else — axe-throwing or pickleball — we will definitely try it.

There is talk in the market that Cineworld UK is handing back sites to landlords and negotiating exits from leases. Are you downsizing in the UK?
There is always a desire to make not only Cineworld UK but every one of our markets a more profitable market. The UK did not have the benefit of going through a Chapter 11 process and trimming the rents as much as we did in the US, but we do have constant conversations with our landlords to make sure we run a profitable business. In some locations we have high rents that we need to talk to our landlords about and negotiate with them.

I would not say there is a desire to reduce the size of the circuit. There are leases that are naturally running out, of course. With those, if the site is not profitable or the rent is too high and we are not able to get to an agreement with the landlord, yes, the lease runs out, we return the building to the landlord and we move on. There are not very many but a couple of sites where that has happened. 

Are you considering a reduction of ticket prices or embracing a dynamic pricing model? You’ve been quoted as saying that in some markets if you lower prices, you may “gain in attendance”. Which markets are these?
My philosophy toward ticket pricing is that we need to get it right and do more analysis.

For the longest time, theatres have not been sophisticated in pricing strategies. We need to figure out what the elasticity of our price is. Different markets have different price elasticity. When I say markets, this doesn’t mean a country. This means a micro-market of not even a city — it’s a neighbourhood. There are some neighbourhoods where you can charge whatever and people will go. On the other hand, there are neighbourhoods where a family of four probably won’t go to see a family movie unless your price is accessible.

My whole point is that I am neither reducing prices nor increasing prices. I am a believer in analysing prices and having the right prices for every market. We’re going into a big price analysis and a deep dive into our pricing in every single theatre. 

So are some cinemas selling themselves short with prices that are too low?
I do believe that our product is a valuable product and that we should charge enough for the service we are providing. As much as I think in some markets we are expensive, I also think we need to be careful not to jeopardise the health of our business with too low a price or too aggressive promotions that may disrupt our business. We can [risk] miseducating our customers into thinking that cinema is an extremely cheap proposition and once we [try to] go back to regular pricing, we can’t.

Does this extend to subscription schemes like Cineworld Unlimited?
There is value from subscription when a customer goes to see a movie that they would otherwise not have gone to see. There’s always a game of averages, right. If there is one customer who goes weekly, we lose money on that customer…if there’s a customer who goes 25 times a year, we still make money from that customer. That customer goes more than they would go otherwise. But it’s very important to hit the sweet spot when the price is not too low, not too high and that the number of visits is the right amount on the average. We keep exploring it.

Can you say a little about your use of data?
In this company, we are going through what I like to call a digital transformation and it is one of my top priorities. One of the main destinations for our capital is technology. With technology, we are going to do a couple of things. One is to make the experience for our customer as frictionless as possible. If our customer wants to buy a ticket on the app, it should be the best and friendliest app. If they want to buy it on the web, it should be the best and friendliest website. If they want to buy it in the kiosk in the cinema, it should be the best experience. They should be able to buy a ticket anywhere. Technology should help us cut the queues and make the experience as frictionless as possible.

On the other hand, all these customers using our technology should also allow us to look into data to improve their experience and then have them come back. Without violating any privacy laws, if customers want to tell us they like a certain type of film or food offering, we should be able to cater to those customers and revamp our loyalty programmes to give unique experiences to every customer. 

What about Picturehouse in the UK? Are you going to hold onto it?
My plans for Picturehouse are exactly the same as my plans for Regal in the US or Cineworld in the UK or Cinema City in central and eastern Europe or Planet in Israel: to make it the most profitable business we can make it. 

But if you were to be offered a lot of money for Picturehouse, would you sell it?
I would not say it is for sale but if anybody offered us a lot of money for any part of our circuit, we would definitely consider anything — and not only Picturehouse… [but] none of our circuit is for sale. I would like to make a strong emphasis on that.

Let me answer this question differently. Picturehouse has been one of the brightest and shiniest spots on our company in the past few months. Just as the writers and actors’ strikes hit, the company’s distribution arm Picturehouse Entertainment was very nimble and dated Scrapper in August in a date previously occupied by another film and we did fantastic. When Dune: Part Two moved from November last year, that’s when distributor Lionsgate UK and partner Picturehouse dated Anatomy Of A Fall and they did fantastically, grossing £2m ($2.5m). 

In January and February, which have been tough months for the industry, Picturehouse has had two of the best months in history. The challenges for Picturehouse are more on the commercial and food side. With Picturehouse, we have a unique value proposition where we sell all kinds of food and drinks. We need to run it more like a restaurant.

Do you agree audiences have superhero fatigue?
I don’t think that’s the case. If you make a good movie, people will come to see it. Frankly, I think Deadpool & Wolverine could be one of the biggest movies of the year. 

Are local-language films becoming more important for your international cinemas?
Without a doubt. They play a fundamental role. I can tell you that last year our box office in Romania was higher than in 2019 because of local product. In 2024 in Poland, we budgeted growth and that is because of local product. It’s similar to what we are trying to do with alternative content. Alternative content is something we are putting a heavy emphasis on because it is a fact that we have fewer films than we did before.

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