Surviving the siege of the silver screen

Mr Vicha says Major Cineplex has adapted for years to the changes roiling the industry.

The digital wave has changed the landscape of various businesses, leaving some chief executives apprehensive about the threat.

But Vicha Poolvaraluk, founder and chairman of Major Cineplex, just takes it for granted.

"I still strongly believe that digital cannot disrupt the cinema business, because watching movies at the theatre gives you a different feeling from watching movies via other channels," says the entertainment mogul. "We can use technology instead to update services at our cinema, responding well to young lifestyle customers."

Mr Vicha cites what's happening in the United States and China, the world's largest and second-largest cinema markets.

Despite the rise of movie streaming over various channels like Netflix, cinemas in the US and China continue to thrive with 10% and 20% growth, respectively, in the first half of 2018.

Mr Vicha believes that Thai movie theatres will never die. Quite the opposite: he says it's possible that the number of cinemas will double to 2,000 nationwide by 2023. That number looks insignificant compared with China's 50,000 movie theatres.

"Against all odds, the business model of Major Cineplex has already adapted for years," Mr Vicha says. "We've applied a partnership strategy by joining hands with partners to open our cineplexes at their retail complexes and co-making Thai films with film directors or media companies instead of our own. The income of each film will be shared with film directors. This will encourage film directors to create more quality Thai films."

With these strategies, he expects the number of film productions to resume growth from this year onward after falling by half to 43 titles last year.

Mr Vicha, 55, founded Major Cineplex 24 years ago.

Major Group owns 160 branches across Thailand and 771 screens in Thailand, Cambodia and Laos.

Major Cineplex is the market leader in Thailand's cinema business. It sells 32 million tickets a year out of 40 million total.

"Although I come from a movie theatre family, I did not possess the passion at first to continue this business," Mr Vicha says. "So after graduating with a master's degree from an overseas university, I chose to start out in property development and the business went quite well."

But Mr Vicha decided to leave the lucrative property sector in 1992 and explore the cinema business, while his father, Charoen Poolvaraluk, quit the family business as foreign cinema chains from the US and Australia flooded in.

He settled on the concept of large complexes that could offer a range of entertainment: not just movies, but also bowling, karaoke, restaurants and shopping. The first such complex opened in 1996 on Boromratchonnanee Road in Pin Klao, Bangkok.

The 14-screen, 4,000-seat Major Cineplex Ratchayothin opened in 1998 and featured Thailand's first Imax cinema. It was the company's flagship cinema complex until 2006 when Paragon Cineplex opened. Other early Major Cineplex theatres include branches at Ramkhamhaeng and Sukhumvit.

In 2004, Major Cineplex absorbed Thailand's No.2 cinema operator, EGV Entertainment, which was Thailand's first cineplex operator. EGV had been owned by a rival branch of the Poolvaraluk family, headed by Mr Vicha's cousin Wichai Poolvaraluk, who started EGV as a partnership with Golden Village.

"We set up Major Cineplex with an aim to fight back against foreign cinema chains from the US and Australia that marched into Thailand and wiped out Thai cinema businesses, including my father's," Mr Vicha says. "It fuelled me to establish the Major Cineplex brand. It's my destiny. Nobody believed it would be successful at that time. We won the game because we truly understand Thais better."

Mr Vicha has never stopped expanding since.

Major Cineplex looks set to spend about 800 million baht, on a par with last year, to open 74 branches in 2019. Some 30% of the spending will be for Bangkok and 70% for second-tier cities.

The continuous opening of new cinemas will support Major's film development.

Thai films accounted for just 16% of the market in 2017 and an estimated 26% in 2018. With the income-sharing structure for film directors, the number of Thai films is expected to increase and boost market share to 35-40% in 2019 and 50% in 2020.

"At a time of technology disruption, I remain fully confident to continue our expansion." Mr Vicha says. "I am not at all panicked. Doing business is like climbing to the top of the hill. Don't look back, otherwise you will not dare move ahead."

According to Mr Vicha, Major Cineplex's establishment and expansion stemmed from his own passion. In his view, providing a quality cinema and movies is not enough. Operators also need to offer good services to customers.

Major Cinema's current offerings are dynamic. It has cinemas for children and adults, with a range of prices for each type. More technology is being applied to respond to lifestyle needs and to digital enthusiasts in particular.

"It's fun to do Major Cineplex because it relates to people and technology," Mr Vicha says. "Technology is a significant weapon to invent new things and always excite our customers."

Mr Vicha is semi-retired, leaving routine management mainly to his eldest son, Visarut Poolvaraluk, who joined Major Cineplex two years ago.

"I don't do business like in the past," Mr Vicha says. "I create the company's vision and transfer knowledge to my children to make Major Cineplex an organisation that is a happy place to work."

Despite the disruptive headwinds, Mr Vicha remains committed to continuous expansion.


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