Four years after Curzon Cinemas and Knatchbull Communications acquired the Artificial Eye Film Company, Ross Fitzsimons, a director of Curzon Artificial Eye (CAE), reviews progress to date and discusses the group’s strategy for growth.
"But you are so lucky!” spluttered my fellow panellist at the Europa Cinemas conference in Warsaw last November. “This is not possible for our company!”
He was referring to Artificial Eye (ArtEye) acquiring film distribution rights for the UK and Ireland and then being able to guarantee the exhibition of those films at our Curzon Cinemas sites. Of course there was no luck involved – our CEO Philip Knatchbull knew when he first envisioned our group in 2005 that to acquire distribution rights was of little use if the route to exhibition was not also controlled, at least to the extent that a platform could be given for London screenings of any films acquired.
As a team we were equally clear that direct engagement with customers would be key to our chances of success – the distributor is dependent on cinemas, retailers and broadcasters for communication with customers, so having a direct customer relationship through our cinemas would allow a strong and consistent dialogue with them. Cinema was also changing – digital technology has brought significant improvements in both quality of presentation and flexibility of programming, making it just as likely that people will come to cinemas to see live opera from New York as the latest award-winner or blockbuster.
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History and heritage were also on our side. Curzon Cinemas had started in 1934 with the opening of the Mayfair site in Curzon Street and grown with the development of the equally prestigious Soho 3-screen cinema in 1999. Both sites were considered among the leaders in exhibiting independent and foreign language film in London’s West End. Equally ArtEye had pioneered the distribution of international film in the UK and Ireland since 1976, successfully bring to market the likes of Cyrano de Bergerac and Farewell My Concubine during the company’s illustrious history.
When ArtEye founder Andi Engel was ready to retire in 2005, he contacted Philip to see if he would be interested in acquiring the company. Roger Wingate of Curzon (and now chairman of CAE) had already told Andi he wanted to acquire ArtEye’s two cinemas in Chelsea and Bloomsbury (Renoir), so Philip suggested to Roger that they should combine the two Curzons with Chelsea and Renoir together with Richmond Filmhouse, which Philip had opened in 1990, to create a new five-cinema circuit which would be integrated operationally with the film distribution company.
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The group was formally created in May 2006 with Curzon Cinemas and Knatchbull Communications jointly purchasing ArtEye, and then integrating Richmond into the resulting group. Philip and Roger were keen to retain the existing team within ArtEye, but it became clear over the following year that changes in approach were needed, and it was not until early 2008 that things began to settle down with the appointment of Louisa Dent as ArtEye managing director. Richard Napper, formerly MD of Sony Pictures UK, soon joined as MD of Curzon Cinemas and before the year was out he had assumed the role of Chief Operating Officer for the group, allowing me to support Philip in developing our business strategically from the stable platform Richard and Louisa were beginning to build.
Our first significant programme with an external partner was a groundbreaking move with BSkyB in 2008 to release the film The Edge of Heaven simultaneously through cinemas and for a limited period at a high ticket price on Sky Box Office – the film was available through both public cinema (our own sites and some other quality independent cinemas) and home cinema, where you could watch it on a big screen in HD with 5.1 sound for £9.99 on the same day cinemagoers could see it. While we gave the film a full UK marketing campaign, Sky also marketed the film across all their platforms including Freeview and satellite channels, on their websites and through their magazines and emails. The release was a resounding success, and Sky have since then collaborated with us on two more films, while together we continue to look for other innovative ways to reach our and their customers with quality content.
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That customer engagement has been key to the group’s development – while cinema customers can buy tickets on a show-by-show basis, we have been successful in extending a £50-a-year membership to more than 7,000 customers now, who come to our cinemas on average once a month – a significant success when you consider the UK average cinema attendance is less than three times a year per person. Underpinning this has been consistent investment in our websites and customer communication via email and social networking, with the result that we now have more than 25,000 registered customers with whom we’re in regular communication.
More than a third of these customers work in media, the arts and entertainment, many of them in the film industry itself, so they demand the highest standards of film presentation and customer service. We therefore also ensure they are as comfortable as possible at our sites and serve them wine from Berry Brothers and coffee from Monmouth Coffee Company while they relax before or after a film or avail of our free wi-fi to work on their latest proposal or script.
These customers will be the backbone of our new website, due to be launched shortly, which will deliver film on demand into every home suitable equipped, to a higher technical standard than that offered by any other commercial operator. The site will also carry extensive information, including trailers, on all the films we exhibit and distribute, and offer customers an expertly curated service from which to choose the best films in the cinema, on demand online or via DVD mail order.
That quality has been assured by Louisa Dent and her ArtEye acquisition team – they have picked up the Cannes Palme d’Or winners from 2007 (4 Months, 3 Weeks & 2 Days), 2008 (The Class) and 2009 (The White Ribbon) for UK distribution, building on the company’s record in having secured UK distribution for many of the best international films for more than thirty years.
While the glamour of Cannes may seem attractive from the outside, there was also much work to do in reducing costs of sale and operation, from DVD replication and fulfilment charges to the costs of kiosk goods and cinema business rates. Key to this process has been the addition of Fusion Media Sales, CAE’s own DVD and digital sales company, which also sells to retailers for fifteen other film distributors while ensuring fulfilment through SonyDADC’s warehousing and shipping service. This makes CAE the only vertically integrated film group in the UK. Combined revenues for ArtEye, Curzon and Fusion in 2009 were £12m.
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CAE’s most exciting recent strategic development has been an agreement to build and open cinemas inside the stores of the HMV Group, the UK’s leading entertainment retailer. The first HMV Curzon, also the first cinema of its kind in the world, opened in HMV’s store in Wimbledon in October 2009. Planning permission has also just been granted to build the second cinema in Waterstone’s (also part of the HMV Group) flagship store on Piccadilly, the iconic Simpson’s building which is also Europe’s largest bookstore. This will be the first Curzon at Waterstone’s cinema, and will open later in 2010, with other HMV and Waterstone’s sites now being planned. HMV and CAE recently announced their intention to develop and open up to twenty more of these cinemas with CAE over the next four to five years. The partnership with HMV gives CAE potential access as that rollout continues to almost seven million registered customers.
CAE also reached agreement recently with a property developer to find and build new sites for Curzon, concentrating initially on London and the southeast of England, and a number of locations are already being assessed. Together with the new Curzon Film on Demand platform due to be launched in July 2010, continuing initiatives with Sky, and discussions underway with other potential partners, the future looks bright for CAE.