February 11, 2016
Ashu Garg
We first met Andy England at Foundation Capital’s CMO Tech Tour Summit last fall, when he had just wrapped his time as EVP/CMO of MillerCoors. We found him to be incredibly insightful, so when he was recently hired as the CEO of National CineMedia (NCM), we thought it was the perfect time to have him back to chat about the future of video as it relates to the theater-going experience, and the opportunity for startups. Below is an excerpt from a recent question and answer session where he shared some thoughts about the allure of movie-going, how best to market to the audience once they’re in the theater, and the need for more data about who is actually buying tickets.
Ashu Garg: How do you see theatrical content fitting into this emerging video ecosystem? And specifically, with the changes in the video ecosystem being so Millennial-driven, I’m curious as to how you see them fitting into what you’re doing.
Andy England: It’s fascinating, really. You’re right that the Millennials are driving the fragmentation of the video world. The way they see media is almost entirely different than the way that their parents do—with the one exception being the movie theater.
Millennials still want to go to the movie theater because there’s still that allure of first-run movies. Whether it’s the latest Star Wars or The Hunger Games, first-run movies are still a cultural event. There’s an appeal to watching first-run movies with other people, in front of the big screen, with a big container of popcorn.
So as it relates to what we do, we see NCM as being premium video reaching a premium audience. Millennials are an especially large and highly-engaged part of our overall movie audience, and that is very valuable to advertisers.
AG: It’s been broadly covered that Millennials are shifting away from any kind of interest in traditional advertising, because they either don’t like ads or they don’t trust them. How does this play into your approach to programming?
AE: National CineMedia produces a show that plays before the movie, it’s called FirstLook. Our role is to entertain you before the show starts, so the fact that we offer 20 minutes of partner content and advertising is, I think, and as research shows, far preferable to not having anything playing on screen. We don’t control the content by the advertisers, but if you look at the show we offer it’s typically developed in conjunction with our content partners and is produced with an eye towards a particular audience we want to engage.
And the feedback that we get from the Millennials, as well as other people that go to the movies, is that they really like FirstLook.
AG: I’m curious about the conversation in the cinema world around the overall shift to digital. I wrote extensively about it in my whitepaper,MarTech and the Decade of the CMO. As you think about the next three or five years, with more and more people being on their devices or in connected homes, do you see specific challenges that you feel the theater world needs to gear up for in order stay ahead?
AE: Well, let me share the yin and yang of that. On the one hand, the impending death of movie theaters has been announced on multiple occasions. And I’m old enough to remember when Blockbuster Video was in its prime. And the whole idea of being able to watch movies on video at home, people were like, “Well, that’s the end of the movie theaters,” right? “Why would you want to go there?”
And the reality is, like I said before, people want to see first-run movies in that environment. People still want to go to the movie theater. They want to experience it and to share that cultural event with other people. Particularly teenagers and Millennials. And social media plays a huge role in the conversation around movies, which brings the traditional movie-going experience into the digital world. So whatever the world manages to create that feels a little bit like the movie theater experience, it still will not match the actual movie theater experience.
So on the one hand, I think that movie theaters are very much alive. And by the way, in 2015 the U.S. box office hit an all-time record. So right there you can see that it’s not hurting.
Now, on the other hand, I think movie theater chains are very interested in improving that experience, anyway. You’re seeing more and more La-Z-Boy-like chairs, reserved seating; beers are now being offered, and even meals in some cases.
But with that said, because everybody who walks in to our movie theater has a mobile device, the question becomes, “How can we make the experience even better?” Engaging customers on their mobile devices will help enhance the experience, but how best to do that is something that we’re still working on.
AG: Tying into that idea of reaching people on their phones, do you have metrics to measure success in the theatrical advertising realm? And how are you thinking about connecting digital with the real world experience, especially considering all those kids having phones in their hands until the very last moment before the show starts?
AE: If you think about the opportunity to connect with the movie-going audience, it starts when they search for a movie and book their ticket online. We have great relationships with companies like Fandango and Movio, and we are able to access their customer data to better understand who is attending the movies. This data is also very interesting to our advertisers in terms of them knowing what types of people are coming to the theater.
In terms of how we connect with the audience on their mobile devices once they’re in the theater, that’s an ongoing conversation. There’s a lobby entertainment network that I think can continue to evolve, but there is also a whole ecosystem of potential marketing opportunity in the movie theater environment.
AG: So if you were talking to startups, what are one or two of the biggest pain points that you think offer a clear opportunity for someone to come in and solve for?
AE: Data is always the challenge, isn’t it? I worked at MillerCoors for a long time, so let me start there, and then I’ll relate it back to the movies. There’s very little data about how customers purchase and consume alcohol at bars, restaurants, and other venues, which makes it more difficult to market in a targeted way. Apple Pay is something that will help in that regard, I think, because you can actually start getting some data about what people are buying in bars, and that’s huge. Apple is a big company, obviously, but there are more and more businesses trying to fill that data gap in the alcohol world.
Getting that data is far and away the biggest challenge—and it’s a huge opportunity. The same goes for movie theaters. The more you understand about the audience the more effectively you can market to them. The guests are in the movie theater already because they’ve responded to the movie marketing, so we need to take that a step further.
AG: That makes a lot of sense. Mobile pay has an amazing opportunity to connect back with a user profile, and then to be able to re-target those users everywhere they go on mobile, and social, and on the websites they visit.
As marketing has become more of a technical discipline throughout your career, have you seen a change in how companies are structured, or in how people are hiring? If so, have those changes accelerated in the past year?
AE: I think that the way companies reorganize to meet the needs of marketing today and tomorrow is going to happen in chunks. It’s very difficult with an organization; you can’t just evolve one day at a time.
You need to reorganize to meet the data analytics and programmatic changes on a year by year or maybe a six-month by six-month basis, find and build relationships with a new set of outside service providers, and transition towards hiring different people with a new set of talents.
And so, it’s going to come in chunks—some will be big, some will be small, and it’s going to vary between the marketers themselves, but there’s no doubt that there will be very different capabilities needed than what we’re used to, and that’s going to be highly disruptive.
AG: We talked about this at the Foundation Capital CMO Tech Tour, but how do you see agencies fitting in to all this, especially on the video front?
AE: The need for creative is huge, because as media fragments that just means you need more types of creative modules—and they need to be more efficiently produced because everything is happening in real time. So the challenge for the marketers is how do you produce more content faster and more efficiently?
Agencies that are able to do that for marketers are truly going to be rewarded. That’s what the market is going to need.
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If you’re an entrepreneur interested in the future of video, or are at a startup building media solutions for today’s largest players, reach out to us at@foundationcap and @ashugarg –– we would love to connect.