At 116, the cinema it became a monotonous industry, most of the time.
Tickets are sold. Images are projected onto a screen, sometimes in 3D. From time to time, cinema networks averse to change are excited about some innovation. The cinema chair cup holder, for example, was patented in 1981.
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But we are not living in normal times for cinemas. Just ask Adam Aron.
A year ago, Aron, who runs AMC Entertainment, the largest multiplex network in the world, was especially excited about his obsolete business. Even with the proliferation of streaming services – and the drop in the number of viewers in the U.S. – cinemas around the world raised a record $ 42.5 billion in 2019. “We will see dramatic growth in audience size in a not-too-distant future in the United States, ”he said emphatically at the end of February 2020.
In mid-March 2020, the coronavirus forced Aron to license 35,000 employees, including himself, and to close all AMC cinemas: 10,700 screens in 15 countries. As the coronavirus peaked, cooled and spread again, AMC reopened most of the cinemas, closed many of them again, and recently opened some addresses again. To keep the indebted network alive, Aron and his chief financial officer, Sean Goodman, who had joined AMC a few months before the crisis, took several financial jumps, narrowly escaping bankruptcy on four occasions in just nine months. AMC raised more than US $ 1 billion in investments and obtained an additional US $ 1 billion in subsequent payment arrangements for renting rooms.
This was one of the largest corporate roller coasters in pandemic, putting pressure on chief executives from all sectors. And the problem is not over yet.
With some studios predicting that the number of viewers will not begin to recover until mid-2021 – resulting in further release delays – Aron said AMC needs an additional $ 750 million to survive. To date, AMC has raised $ 204 million. AMC said during a recent securities deposit that, without more money, a restructuring due to bankruptcy or liquidation would be “probable”. A new possible path involves a financing package linked to Odeon, the European cinema network that belongs to AMC.
“Many people underestimated the stubbornness of our managers when facing this crisis, but we haven’t even started fighting yet!”, Commented Aron during an interview, adding a little of the empathy that has become his trademark.
The pandemic has also put 66-year-old Aron at the forefront of the streaming wars, and for the past six months, he has been treated as a traitor in one minute and a savior in the next.
Aron, practically a newcomer to the multiplex cinema sector, took a different path from other movie networks in July this year and agreed to drastically cut the exclusivity time that AMC receives to show Universal’s films. The studio, home to franchises like “Despicable Me” and “Fast and Furious,” now has the right to show films at viewers’ homes through a premium service on demand after just 17 days on theaters in AMC cinemas – instead of 90 days, which have long been the norm in the industry. In return, Universal agreed for the first time to share a portion of its streaming service revenue with AMC.
Even though he manages to conduct AMC during the pandemic, Aron faces daunting challenges in the future. At best, your company will be deeply indebted. The number of spectators could grow, thanks to the dammed demand. Or the masses, now accustomed to having immediate access to major launches through streaming services and online rental platforms, may be reluctant to return. Nobody knows for sure.
How long will Aron still be able to fight?
Darryl Hartley-Leonard, who led Hyatt Hotel Corp. in the 1980s, when Aron was chief marketing officer, he laughed at the question. “Let me explain Adam in the following way: if he had been the leader of the Titanic band, not only would he have sunk with the boat, but he would have looked to the side, as the dark, icy waters approached, and asked if his colleagues thought that there was time to write another song, ”said Hartley-Leonard.
Direct and quoting Churchill
Adam Maximilian Aron is not well known in Hollywood. He lives in a distant land called Kansas, where AMC is headquartered, and joined the company in January 2016, thanks to his role in the hotel sector.
After a meteoric three-year stint at Harvard University and a master’s degree in Business Administration (also from Harvard, with distinction), he went to work in the marketing department at Pan American World Airways. When he was in his mid-30s, he became director of marketing for Hyatt and later held the same position at United Airlines. He then gained fame as a master of recoveries, serving as chief executive of Norwegian Cruise Line, Vail Resorts and the NBA Philadelphia 76ers basketball team. For a time, he was a senior operations partner with Apollo Global Management, a powerful private equity firm. Prior to AMC, Aron led the Starwood Hotels chain.
He’s incredibly straightforward. “This quarter was a disgrace,” Aron told AMC analysts in 2017. However, it is often lost in monologues and endless lists. “Before answering your question, I would like to talk about eight specific topics,” he said during the most recent AMC conference. He loves bad puns and popular interjections. And he has a tendency to exaggerate, quoting Winston Churchill during the war to talk about the AMC mentality during the pandemic, for example. “We will fight on the beaches, we will fight on the landing grounds, we will fight in the fields and on the streets,” Aron told analysts in November.
Waiting for magic
Challenging the status quo – and disturbing competition in the process – is the guiding thread of Aron’s entire career. “What separates successful leaders from unsuccessful leaders is boldness. I have always tried to be the opposite of timid, with the aim of fundamentally changing a company or an industry for the better ”, he observed.
When he was at the head of Norwegian in the early 1990s, Aron caused quite a stir in the conservative cruise industry with a marketing campaign that addressed sex. (One of the ads said, “There is no law that forbids you from making love at four o’clock on a Tuesday.”) When Aron arrived at Vail Resorts in 1996, he infuriated traditionalists in a stubbornly static industry by expanding the company beyond skiing. He bought other winter resorts and a chain of luxury hotels; opened dozens of restaurants and retail stores; and even ventured into building condominiums. When he left Vail in 2006, competitors were copying his strategy.
“Instead of sitting around complaining, Adam sees what cards are in his hand and thinks about how to play with what he has. Whenever this happens, some people end up getting irritated in the middle, “summarized Harry Frampton, a leading Colorado contractor, adding:” Vail’s business model was tired, and Adam’s approach – beyond skiing – was transformative . He referred to this as the Vail Renaissance. I thought it was a silly marketing thing at the time. But I was wrong. ”
Only time will tell whether the film industry will see Aron the same way. In any case, his tenacity in avoiding bankruptcy was certainly noticed.
“During this crisis, Adam was like Houdini. Every time I start to doubt that he is capable of doing anything, he does another magic trick, ”said Richard Gelfond, chief executive of Imax.
Aron is optimistic about the possibility that AMC – or America Multi-Cinema, founded in 1920 – will receive the necessary help and also experience a renaissance as people get out of the pandemic: “If you want to know how I’m feeling, I’m very excited by the fact that several vaccines are being applied worldwide. This is all we need to be immunized against the crisis. ”
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