“We are optimistic about the future” – an interview with Grzegorz Komorowski, the Vice-President of Helios S.A.

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They have put the most difficult year in history behind them, and just opened their 52nd cinema. We had a talk with Grzegorz Komorowski, Vice-President of Helios S.A., the largest cinema chain in Poland, about the challenges faced by the cinema industry and his company’s history of cooperation with LSI Software.

Cinemas re-opened at the end of May after having been closed more than seven months. What steps have you taken to deal with the re-opening and to make it profitable (if it could even be profitable under the restrictions imposed)?

The entire period they were closed was a time of immense anticipation of when and how we would be able to open our cinemas. Undoubtedly, we all waited for it – we at Helios as well as our viewers. We opened our cinemas on May 21, when consumption in cinemas was forbidden, which for us in practice meant a ban on sales at concessions stands and restricted sales limited to 50% of the number of seats available in each cinema. From the beginning, we were aware that these restrictions would not allow us to become profitable right after relaunching our chain. However, we had no doubt that we would be opening our cinemas, returning to work and inviting viewers who have also waited many months to return to the cinema. An extremely important and significant element at the time we opened the cinemas was the opportunity to offer viewers many new films that had been awaiting their cinematic premiere a long time. There remain many such new and attractive titles, so we are counting on the growing interest of viewers.

On June 13, the government loosened restrictions on consumption in cinemas, and thanks to this it became possible to sell popcorn and other snacks. And as of June 26, the maximum room occupancy limit was increased to 75%. The effects of this change have been noticeable – there are many, many more viewers, and the concessions stands are experiencing a renaissance in terms of sales revenue. Thus, the number of seats available for sale today is sufficient for us to function as we did back before the pandemic.

So you can now cautiously talk about returning to the stage before the pandemic?

We are definitely very satisfied after the first month the cinemas have been operating and we are optimistic about the future. Since the opening on May 21, viewers have been very eager to return to the cinema – attendance is even slightly higher than in June 2019, despite the fact that Euro 2020 [football matches] were still being played, which kept many people at home. We are very pleased with these results, though we are also waiting with some caution and observing whether this was an effect of the first month of the return to normalcy. We believe, however, that the pace of viewers’ return to the cinema will continue. Undoubtedly, the large number of new, good films in our repertoire has helped – every week, several strong titles are arriving on our screens.

Speaking of viewers, what is a "post-pandemic" viewer? Has the past year changed us and our habits?

Over the past year, people have generally switched to buying all manner of products, not just cinema, online. We have clearly seen a large increase in ticket sales via our website – in some weeks it can exceed even 50% of all tickets sold, where previously it was around 20-25%. This redirection to the online form is clear-cut and in our opinion it will only grow more pronounced, especially considering that our new mobile app will be released in the near future.

Moving to online versions isn't just about purchasing [tickets]. What do you think about the attempts to release movies on streaming platforms before or at the same time as their premiere in cinemas? And how do you foresee the results of the clash between cinemas and these websites?

We now know that it doesn’t work, though at first we approached it somewhat anxiously. It was, to tell you the truth, a kind of experiment, and it made sense especially when the cinemas were closed. Productions whose preparation often takes hundreds of millions of dollars will not pay for themselves by views solely on streaming services, access to which costs a dozen or several dozen dollars a month. Large film studios that invest huge amounts of money in film productions want a return on their investment and now know that they can get it only through cinemas.

Over the last two months you have opened another two locations, so your chain currently now has a total of 52 cinemas with nearly 300 screens. These two openings, of course, were planned well before the pandemic. What are your plans for the future now?

That’s true, these were cinemas we planned to open long before the pandemic hit. And although it was not the best moment to open new facilities – after all, the pandemic and lockdown deprived us of any income at all for many months, we decided to open these cinemas. Looking at how we have managed to return to normal so far, how [the cinemas] have filled up with viewers, we are glad that we did, and we are convinced that it was a good decision.

However, as to building new cinemas, this is closely related to the construction of shopping malls in which the cinemas are to be opened. The lockdowns and restrictions have affected not only the cinema industry, but also shopping malls – thus, for the next two-three years, there probably won’t be too many new facilities. We will devote this time to rebuilding our business, paying off the financial obligations incurred to get the company through the pandemic, and only in the next step will we consider further growth and the investment process. This, of course, does not mean that we are not keeping an eye on the market and not trying to learn what new cinema locations may emerge in the coming years.

You have been focusing on development for some time – you decided to choose POSitive Cinema a few years ago. What was dictated by the change of supplier?

We’ve been on the market since December 1992 – that’s almost 30 years now – and our beginnings were paper, cardboard boxes and ticket rolls! Of course, together with the times, the growth of the company and, above all, technology, this has changed – we were the first on the Polish market to introduce a computerized ticket-selling system, even though there were no multiplexes yet at that time. We opened successive cinemas, and at the same time systems, technologies and the Internet developed so rapidly that we reached a point where the software we were using did not enable us to grow in the form and at the scale we expected. Some functionalities could not be implemented due to the way the system was written, and this heavily limited us. Moreover, it was not a centralized system, so managing the screenings, repertoire and sales was highly complicated.

We wanted to make more progress, to have full control over all locations and an effective way of managing them, as well as to keep up with trends and customer expectations. We sought a system that would meet all our expectations and change together with us. So a few years ago, the Management Board made its decision and chose LSI Software to be able to enter the 21st century with software that will help us efficiently manage our business.

What have you managed to accomplish after this change?

Above all, what we had been missing the most – we gained central management of the sales offer, tickets, concessions offer and even price lists. Central management of the repertoire was and is a big step for us. Previously, price lists, the concessions offer and repertoire were sent out to the cinemas, which had to be entered individually into the system or on the website. Now we have people at the company’s headquarters who handle this process for all of our cinemas.

Thanks to this solution, we can quickly and efficiently make modifications to the offer in all our facilities, essentially all at the same time.

How has this change affected sales and customer service?

Sales efficiency has certainly increased – sales processes both at the POS and website have been optimized. The system is very intuitive, so even new cashiers can quickly and efficiently serve customers at the POS. Our products are also more accessible to viewers – we can offer individual coupons that can be redeemed in all channels, both on the website and at the checkout counter, and soon also in the mobile application.

What’s more, we can analyze sales in depth. The system provides us so much different information that we call it a “data warehouse”. We have space for ongoing analysis and drawing conclusions. Without this data we wouldn’t notice certain patterns or phenomena, but thanks to the data and analyses thus obtained, we can make more accurate decisions.

If you had to pick the most important element of the system, what would it be?

Right next to the centralization I already mentioned, it would be projection automation (TMS automation). It has not only streamlined the entire process, but also enabled us to generate huge savings. Thanks to this solution, projectors, movie servers and cinema lights are turned on and off fully automatically, in connection with the sales and repertoire system, according to the scheduled screening start and end times.

Let’s imagine a situation when not a single ticket was sold for a given screening and no viewers come (e.g. on Monday morning). The system, having this information, turns off the projector about 15 minutes after the start of the screening. With almost 300 screens in the entire chain, this is a huge energy saving. What’s more, thanks to central management and automation of the process, we are able to reduce the number of simple, routine employee tasks. All this makes the costs we save very clear and significant.

What sort of numbers are we talking about?

Around 80,000 man-hours per year.

The system we succeeded at building with LSI has improved business management efficiency. The combination of software and business development experience has yielded very good results.

Has this collaboration always gone so well?

For the first two-three years, we focused on adjusting the system to our expectations. However, we have a partner with whom we can talk and come to with our ideas, which are later implemented, and it does not block our growth. We can feel safe and be sure that we won’t run out of resources and support to continue and grow this business.

To finish up, a few short questions – popcorn or nachos?

Definitely nachos, though when I’m in a cinema with my family and they choose popcorn, sometimes I pick at it a little.

Dream room or ordinary room?

No doubt here – dream room! The quality and comfort is incomparable to that of an “ordinary” cinema hall.

Ambitious films or blockbusters?

Everyday life presents so many challenges, so when in a cinema I want to immerse myself in a world of fantasy and entertainment in order to get some additional positive energy, which is why I choose blockbusters.

Your favorite cinema of your 52?

Of course, it’s our Łódź-based Sukcesja, which has everything a cinema should have – a Dream room, the best sound, the best projectors, a rich repertoire, and 9 rooms. And a large, dedicated parking lot!

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