Dealers’ Roundtable – New Service-Opportunities, Sourcing Staff Keeping Dealers Awake at Night

Bethe Figge, Sr. Sales Manager, Dolby Labs orchestrates panel discussion with American Cinema Equipment’s Patty Boucher, Bobby Franklin of Franklin Designs, Sonic Equipment Company’s Chris Stevens (Sonic) and Dan Rupple of Strong Technical Services (Strong, or STS).

Key players in the cinema ecosystem are the dealers, installers and integrators who get the most out of digital cinema equipment and venues, to the delight of their exhibition customers. At LASS 2020, Bethe Figge of Dolby Laboratories moderated a panel of four leading suppliers, to discuss what trends are happening in the industry.

Figge lead off asking about the issue of consolidation, wherein exhibitors are gobbling each other up, and how this trend is affecting dealers. Stevens began, saying consolidation among customers has obliged Sonic to develop expertise in a variety of technologies, as variety and locations of venues has increased. “Whether it’s motion seating, laser projection, xenon projection, or different setups, like smaller theatres, the variety of services that must be provided in the complex itself have increased,” said Stevens.

Boucher added that with smaller theatres being bought out by larger chains, it’s harder to keep them as customers, as the larger chains may have their own teams or preferred suppliers. “Do the new owners try to maintain the status quo, [per services], for a period of time, or is it finish up and in 30 days, you’re out?” asked Figge. “Our experience includes ’30 days and you’re out,” Boucher lamented.

Franklin agreed but took it one step further. “It’s not even the small theatre owners; it happens with the mid-sized chains being acquired by bigger chains and it’s tough seeing friends who don’t keep their jobs.” Figge asked “…then how do you stay relevant?” Rupple interjected that it helps to have a nationwide network of service technicians, as Strong does, to maintain your appeal, during takeovers.

Boucher said that the right attitude, providing quick, professional responses, while knowing that your company’s days are officially numbered, helps, as the acquiring circuit often then continues to give out “little bits here and there” for service contracts, and that can grow in time.

Stevens said there are often pieces of the pie available, even when the new owners may be bringing in services ‘in-house,’ to provide, perhaps, emergency services and remote services.

Figge cited the increasing popularity of dine-in theatres and proliferation of same in 2019, so pondered whether those builds were providing an opportunity for the dealer-installer community for business? “Do you get involved in kitchens, and lobbies, as well as traditional cinema projection and audio installs,” she asked.

“It’s more than just dining in fact, and we’ve had to learn and then help cinemas that turn themselves into entertainment centers, with equipment purchases and getting the right [zoning] permits,” said Franklin, who noted that it helps keep revenues coming in during lulls when “studios don’t have strong content to offer.”

Stevens added that, as cinemas evolve into entertainment centers, they are also looking for information gathering and analysis, so integrating point-of-sales (POS) and tracking systems is picking up for dealers. “We try to explain the inevitable anomalies to the owners, point those out, such as the need to arrange so that the food delivery and trailers don’t conflict,” Stevens said, prompting Figge to cite her own experience with distracting food service during the movie itself.

The needs for growing the technical-staffing ranks and encouraging and developing young people to enter this stream arose and Figge asked what dealers were experiencing, and what the industry should be doing to encourage and develop a new generation of technicians.

Strong does a lot of break-fix, technical maintenance that involves completely different hours than the typical 9 to 5 environment, partially due to the travel involved to disparate locations. “I’d say that’s one of the biggest hurdles to hiring in young staff,” said Rupple, “in making them understand that this isn’t a standard job.” Rupple added that, on the positive side, there were good training courses available online and on-site through the equipment manufacturers, so this helps.

Boucher noted that her senior technicians are embedded in the technology and passionate about it, but the junior technicians less so. “They lack the passion; it’s just a job and we spend upwards of a year training them.” Former projectionists make good technicians, so as those jobs dwindle, Boucher cited those as a possible feeder stream, which is a good thing, given that there is “no college training, not a lot formal training out there.”

“We have our core group of technicians, many of whom started off with 35mm film,” said Stevens, “but finding new blood is hard, although we’re finding that people with theatre in their background are stepping up” and that people with general electronic and information technology (IT) backgrounds are proving a ready source of new hires.

Figge observed that the ICTA was investigating technical scholarships and would be picking the brains of the dealer/installer community in 2020 as to how to structure them, as the dearth of service technicians is a hot topic that dominates many ICTA discussions.

Switching gears, Figge asked the panel if they had much influence on exhibitor equipment purchases…”do they listen to you, ask your opinion and do you feel that you’re an integral part of that [sourcing] process?”

Leading off, Stevens said that in a small industry and customers that Sonic has had for 30-plus years, so the trust is there for customers to discuss what’s coming down the line for equipment upgrades, say at a trade-show or offshoot of a simple service call, and the exhibitor ends up asking, “Hey, so what do you recommend?”

“It’s gratifying to be acknowledged as the experts and that our customers place the success of their business in their hands, so we can steer customers in certain directions as to what they should purchase,” confirmed Stevens. Boucher agreed, saying that many customers don’t have an in-depth understanding of the technology, “so they come to us.”

Franklin added that “…the exhibitors rely on us, they take our word,” understanding that we go out to a lot of conventions and learn “what’s the best out there right now, to fix a problem, or to give me the best picture, and by the way, it’s not just the small customers, it’s the big chains as well that rely on us.”

Segueing into the nitty-gritty of the business, Figge led the panellists to discus, how, as a percentage of revenue, service versus equipment sales had changed over the next five years and what new services might fuel the future. Leading off the discussion, Stevens said Sonic had witnessed its heavy pure-equipment sales during the film-to-digital conversion, but now it’s a better split between services and equipment, “and it really varies year-to-year and whether a client is into new builds, so currently it’s 60 percent equipment sales and 40 percent service revenues for Sonic.”

When the digital conversions tailed off, Strong’s portfolio of technical services filled in, said Rupple, but “I’d say that we remain primarily equipment-sales heavy,” given the new builds and retrofits going on.

Equipment sales go in cycles, added Franklin. “First it was digital projectors, then a lot of reclining seat installs, but with new construction slowing down, you have to survive and that means selling a lot more services.” Boucher agreed with the cyclical nature of the business, and added that some customers have come to ACE to service arcade games, food dispensers (like popcorn poppers) and the like, and she is actively investigating that those possibilities.

“As part of our extended service contracts, we’ve serviced concession equipment at Sonic,” noted Stevens, “but there are a lot of great commercial food-services out there already, but beyond the dine-in space, we may become involved in delivering of third-party services like streaming platforms into the halls.” Warming to the topic, Rupple noted that services are often dependent on technology changes, “like we had lots of experience with services to take out the old film equipment, like platters” and then install digital technology, so servicing new 4DX format-cinemas, with their shaking seats, simulated weather and lighting effects, etc. are certainly emerging services that are growing.