Rooms with a Vue

Bullish Richards trains focus on development and demos

July 2005
BYLINE: ADAM DAWTREY

LONDON Vue Entertainment, the rebranded chain that was once Warner Village, might be only the third-biggest loop in Blighty, but according to evangelical Canadian CEO Tim Richards, it's No. 1 by every measure he cares about.

His confidence was reinforced by trawling through the books of all the rival circuits that went up for sale last year.

"As a consequence of the consolidation phase we have just been through, I know we are the market leader in terms of revenue per screen, profit per customer and the quality of our assets," he asserts with characteristic bullishness.

Odeon and UCI both ended up in the hands of Terra Firma, UGC and Cineworld were picked up by the Blackstone Group, while Vue acquired Ster Century.

The Odeon-UCI axis accounts for 35% of the U.K. market, with Cineworld-UGC taking 25% and Vue, with the addition of the seven Ster Century sites, near 20%.

Richards admits to bidding for Odeon, but only "half-heartedly." He liked the look of its multiplexes, but a significant portion of the circuit is made up of old-fashioned venues light years from the stadium seating and contemporary design of Vue sites.

Ster Century, on the other hand, was a seamless fit, Richards says. "They have 100% stadium seating, and conceptually they were building cinemas similar to the new ones we are planning. They spent a huge amount of money developing them - arguably they overspent," he laughs.

Vue has 49 sites and 496 screens, but plans to build at least 20 new venues over the next two to three years. Since Richards' six-theater SBC loop took over the 36-site Warner Village circuit two years ago, Richards has added 13 screens within existing multiplexes, but hasn't yet built a new one.

This, he explains, is because the time-consuming process of completing the takeover, then refurbishing the entire chain, meant he had to abandon SBC's pipeline of new construction projects.

"To be honest, we lost credibility in the marketplace as a result of that, and it has taken us 12 to 18 months to really build up the pipeline again," he admits. "But right now, we are probably the most active developers in the country."

Vue's new multiplexes will either be built in new markets , or in towns served only by more primitive plexes. "I philosophically will not build against another stadium-seating cinema, but all other cinemas are fair game," Richards says.

"I do not want to start any of the heated build-up that's happened in the United States. I don't think we will see any of the kind of ego building that you saw in the U.S., because all the chains are now owned by venture capitalists, and I know the kind of financial discipline that imposes."

Vue is owned by Boston Ventures, Clarity Partners and Legal & General Ventures. Boston backed Richards' launch of SBC in 1998, and the other two investors came aboard to finance the Warner Village takeover. Richards previously worked as senior VP of business development at Warner Bros Intl. Theaters. Before that he was an inhouse lawyer at UCI.

Richards is clearly a highly competitive character - he represented Canada at two skiing World Cups before he started his legal career . At Vue, his motto is "making the best better." The old, garish cartoonish branding of Warner Village has been replaced with a more stylish and muted design calculated to woo a broader demographic.

Upgraded ice-cream and coffee bars are being tested with great success at key sites, and Richards has instituted what he calls the "Vue-niversity" - a comprehensive training program for all staff.

"Concessions are where we really excel. We do not believe in self-service, and we are constantly trying to give the customer a better product," he says.

Vue also embarked on "mosaic profiles" of the customer base for every one of its cinemas, combining in-depth market research of the existing clientele with a study of the population living in the surrounding neighborhood.

"This was a very intense microanalysis at each of our catchments, and we finished it about five months ago. We are now learning how to use and adapt that information," Richards says. "We are working with the studios on which movies are most appropriate for which cinemas, and how we should market them."

For example, the research uncovered a strong Turkish community near Vue's plex in Islington, north London. As a result, Vue booked the Turkish hit "Vizontele Tuba" into the theater for a couple of weeks.

In Birmingham, Vue discovered a much larger Indian audience presence than it expected, and now has a screen dedicated exclusively to Bollywood fare.

Richards claims that he has seen market share upticks in response to these kind of upgrades, though he doesn't offer figures.

But in the end, he says, "we will never be the biggest. We are more focused on the qualitative not the quantitative side. That means we've got a circuit that is more highly defensible in the longer term."

Copyright 2005 Reed Elsevier Inc.

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