"We are about to enter into the next golden age of cinema," says the CEO of the world's leading independent theater chain, arguing that streaming "is having zero impact on theater attendance."
Anyone predicting the end of cinema better not sit down next to Tim Richards.
Despite Netflix, despite Disney+, despite HBO Max, the CEO of leading independent theater chain VUE International, which operates 228 theaters and nearly 2,000 screens across 10 countries, believes "we are about to enter into the next golden age of cinema."
This year's Oscars seemed to prove him right. Netflix was all but shut out, with 2 minor category wins (supporting actress and best documentary) from 24 nominations, while the night's major winners — Parasite, 1917 and Joker — were all made for, and have proven hugely successful on, the big screen. Richards points to double-digit growth in territories like Italy, the Netherlands and Germany as clear evidence that "streaming is having zero impact on theater attendance."
Richards has been putting his money where his mouth is, aggressively buying up theaters, including, in 2018, acquiring Germany's number 1 multiplex chain CineStar to merge with the number 2, VUE-owned CinemaxX. It was only at the last minute that Cineworld Group outbid VUE its $2.1 billion deal to buy Canadian chain Cineplex and its 165 theaters.
Richards plans to keep up the mergers and acquisitions in 2020. "M&A is in our DNA," quips the 61-year-old Canadian native.
Fresh off the plane from the Oscars, Richards spoke to The Hollywood Reporter's European Bureau Chief Scott Roxborough about the company's global strategy, why VUE won't be going back to Saudi Arabia and how he ended up in a very public beef with British artist-turned-director Rapman.
What's your reaction to the historic win for Parasite at the Oscars?
It's fantastic. Absolutely a watershed moment for foreign-language films. We operate around the world and in every territory, every single year, two or three of the higher-grossing titles are local films. Historically, a lot of them have been remade for a local audience elsewhere. Not the door is opening, finally, for the whole world of foreign films. It's a turning point for the industry in a very positive way.
But I think the broader message of the Oscars was about the power of the big screen. You heard it with so many of the winners talk about it on stage. No young aspiring director, actor or actress dreams of making a movie for the small screen. And you saw that while big streaming services might be able to get a lot of nominations, that doesn't translate into many awards. I think as an industry, we haven't been great about getting out the message of how successful the box office has been. We had another record year last year, with 8 movies crossing the $1 billion mark. Records are being broken everywhere.
Has BAFTA got that message? Last year, when Netflix's Roma won the BAFTA for best picture, you wrote an open letter calling out the BAFTAs for honoring a "made-for-TV" movie. This year, there were no Netflix winners.
First, I'm a huge fan of the BAFTAs and a long-term member. After last year, we sat down as an industry and had a discussion about eligibility. What the last year has really shown us is it's not about how much money you throw at things, it's about the quality of the films that are being produced. I'm a big fan of some of the streaming services, though I haven't been as impressed with the films as with some of their other content. But I think there is something about the unholy alliance between creatives and the suits, that you see at the [film] studios that produces success. You can't just thrown money at a director and expect to make a hit movie.
Do you see an end to the streaming/theater divide?
Subscription services are not our enemy. They have a different business model. There have always been fantastic made-for-TV movies and fantastic TV shows. The wars that are being fought right now are within in-home entertainment, between streamers and terrestrial TV, pay-TV and cable. I think the success of the theatrical market has been a wake up call, both internationally and domestically, in the last few years. I think the streamers are beginning to see how theatrical is accretive and a huge driver for audiences, that it doesn't effect your subscriber base.
I think we're going to see the streamers begin to release their films theatrically and to respect the theatrical window. Just look at the facts: 2018 was the biggest year in 15 years in the U.K.. The Netherlands last year had the biggest year since 1963. Italy is up 14 percent year-on-year. It goes on and on. It's not just about inflation-based box office. We're talking about actually bodies. More people are going to the cinema now than they have in 40-50 years.
What about the potential of the Saudi Arabian market? VUE pulled out of Saudi Arabia after the killing of [government critic] Jamal Khashoggi.
We were the first operation in Saudi Arabia, I was on the development board. We looked at it very closely. I think it wasn't and isn't the gold mine that a lot of people thought it was going to be. We decided that the time wasn't right and we pulled out.
That's downplaying the moral stance you took by choosing to pull out after the Khashoggi killing.
Well, this is our company. We started it and we built it up. We have to make decisions that reflect our values.
You were criticized late last year when, after violent incidents at some screenings, you pulled the urban gang drama Blue Story from all your theaters in the U.K. Looking back, how would you assess your reaction?
Hindsight is a wonderful thing but I'm not sure we would have done anything very differently. The safety of our customers was and is our upmost concern. What happened when Blue Story was released was unprecedented, with people bringing machetes to the theater. We never banned the film, we pulled it off the screens to catch our breath. And we reinstated it as fast as we could. I will say, I found it difficult, and very disappointing, that we didn't get any support from anyone during this. I've spent 20 years of my life supporting British film, indie film and diversity in film. But no one came out to support us.
Did you try to speak to [Blue Story director] Rapman? He publicly accused VUE of a possible “hidden agenda” in pulling an urban film off British screens.
I desperately tried to speak to him. I spoke to his producers, to common friends. But he didn't want to talk to me. I guess everyone wants their 15 minutes and they got it at our expense.
Vue has been ahead of the curve when it comes to implementing technology, particularly AI.
Our film booking model is completely run by AI. What cinemas book what films at what times. It's very sophisticated. It lets us play more movies to more markets. And it's shown us that there is a market out there for every movie.
How does your system work in practice?
We gave a company in San Francisco, who had been working on models for New York hedge funds, 10 years of extremely granular information from our theaters. For a data cruncher, that's Christmas. They came up with 52 different models before we found one we realized would work. It uses everything. Some things are obvious, like in the U.K., a family in Northern England might want to have dinner earlier, because it gets dark earlier, and go to an earlier screening. Our system adjusts for that. It adjusts for neighborhood, for demographics, for genre, for local habits. And, factually, by any metric you want to look at, we have the youngest audience demographic of any cinemas in Europe.
How flexible are you on pricing?
Pricing is an element we are constantly testing. But we are not discounters. We have a premium product and we are not afraid to price it accordingly.
What is your your position on subscription programs?
We don't believe in subscription services for theaters. It's a blunt instrument that ties up consumers, and us, for 12 months. We're rather stay flexible.
What's been the impact on the theatrical business of Disney's acquisition of large parts of Fox?
If you've been in the industry as long as I have, you know that every studio gets its moment in the sun. Disney has been going through an extraordinary period. It's one of our best partners. In terms of production, marketing and promoting films, they've been absolutely incredible. From our side, the merger has been seamless and a net positive. But I think what's really exciting are developments at the other studios. Paramount and Universal have incredibly slates of movies coming up and both have had some huge wins recently. I think we're returning to a time when the top spot goes back and forth between the big studios.
On top of that, I think we are seeing the streamers, Amazon and Apple in particular, really making a big screen commitment. I can't remember a time when there has been such a commitment to feature films as there is now. It's a great time to be in the movie business.
A version of this story first appeared in The Hollywood Reporter's Feb. 20 daily issue at the Berlin Film Festival.
