Majestic's CEO discusses the Kempsey Cinema Project

DEVELOPMENT: Majestic's CEO, Kieren Dell, says Kempsey Shire Council, Gowings and the Federal Government will be investing in infrastructure.
DEVELOPMENT: Majestic's CEO, Kieren Dell, says Kempsey Shire Council, Gowings and the Federal Government will be investing in infrastructure.

With a decision on the future of the Kempsey Cinema project expected at today’s Council meeting the Argus spent some time recently with the CEO of Majestic Cinemas, Kieren Dell, to learn more about the industry and why he believes a four screen cinema in Kempsey’s CBD is the way of the future.

“This infrastructure investment is about creating something positive for Kempsey. As a company, we know and love the Mid North Coast. We started in Nambucca, we employ local people and we are committed to regional areas,” Mr Dell said.

Mr Dell told the Argus the reality is people are regularly travelling from Kempsey to attend the cinemas in Port Macquarie and Nambucca with around 1000 Kempsey residents signed-up to Majestic's Movie Club.

"These people are coming to our cinemas already, and are travelling 40 min plus to get there, so one of the driving forces, I understand, for council is to keep that money in Kempsey," he said.

"From my point of view, if it's spent in Nambucca or Port, that's great.

"From Kempsey's point of view, it's not so great."

Mr Dell said another key motivator for all parties was securing a $6 million plus investment into infrastructure for the town.

"There aren’t too many $6 million investments happening in regional Australia at the moment, so it's a positive.

"Gowings is investing $2 million into this project.

"They're not getting any more than a basic return on their investment.

"Importantly, the Federal Government has expressed the confidence that this is a project they want to support.

“"If it doen't happen now, that money goes away, and it will never happen, so, do we turn our backs on the $2 million the Federal Government and Gowings are each putting in.”

Majestic itself will invest around half-a-million dollars and anticipates only a small financial return.

"We'll be putting in all of the specialist equipment," Mr Dell said.

"It's up to $100,000 for digital projectors and sound equipment per screen and on top of that is computer, point of sale and candy bar equipment.

"It creates some risk but we're prepared to take that risk because we're confident that it will be a success.

"But make no bones about it, this is not just a money making exercise.

"We're not going to make a lot of money out of this and nor are Gowings.

"It's about increasing our commitment to the people of the Mid North Coast."

Majestic's CEO had looked at Kempsey a number of times on a commercial basis and couldn't make it stack up, but he says government support has made it possible for Kempsey to have a modern cinema complex.

"All the surveys said the community wanted a cinema, and we're talking about a real one with comfortable cinema seats and multiple screens.

"But private enterprise alone isn't going to make it work.

"The project doesn't happen without the government investment.

"It's the infrastructure cost that doesn't make it work on a pure commercial basis.”

Mr Dell said Kempsey Shire Council, like Gowings and the Federal Government, are participating in infrastructure investment.

"I know people have an issue with why government are doing this, but if government doesn't invest in local community, who will?

"And it's not viable to say to Gowings just put up all of the $6 million.

"That is a fallacious argument because it isn't going to happen, and it's not going to happen at all, unless there is government support, and that's not an indictment on Kempsey but just reflects the need for government support in smaller regional areas on a similar level to that applying to the big cities and larger regional areas.

"But with the help of the Federal Government, we can actually get a facility that Kempsey can be proud of.”

When asked what will happen if the Kempsey cinema runs at a loss Mr Dell said he doesn’t believe that will be the case.

“Around 93,000 is the number of admissions we estimate we'll get once it is running fully. 

"Australians attend the cinema on average 3.5 times per year.

"If you take the population of Kempsey and multiply it by 3.5, you get well over 100,000 admissions but we’ve taken a conservative position and are look at figures for a break even case.

"We're assuming something like 3.2 per annum, which is less than the national average, so we're not being unrealistic about it."

The CEO with many years in the cinema business said the big screen is alive and well, and Majestic knows from experience how to give the Kempsey Cinema every chance of being successful.

"It's a fast-moving industry.

"Things like Netflix, change it, but it doesn't necessarily remove the need for it or kill the business as some people are saying - it just changes how we operate.

"People are no longer willing to wait weeks to see content that is running in the cities.

"They want it and they want it now, just like they get on Netflix.

"Cinema is evolving and the reasons people attend the cinema and the types of content they can view is changing but Netflix hasn't actually changed the frequency of people going to the cinema.

"One of the things I've been concerned about is that people have been saying there isn't a future for cinema - well in fact, there is.

"There's more new cinemas being built in metropolitan areas than for a long, long time.

"We're the biggest moviegoing nation in the world.

"If that says that cinema is dying than you can knock me over with a feather.

"Part of the reason for its continued success is we went digital five years ago and with digital it opens up access to a whole lot of content and flexibility in what we can do, and there is going to be a proliferation in content even from here.

"The big studios like Disney and Universal are no longer releasing dozens of movies a year.

"Instead, they are making 12 or 15 a year, and they are all big blockbusters that you've got to see on the big screen.

"They're focused on those being in cinemas and there's a window before they go out onto other media.

"For the first time in over a decade, in the last couple of years cinema revenue has again overtaken DVD and home entertainment.

"The cinemas are absolutely crucial to the studios and they're going to keep supporting it and it's those sort of macro issues that people are not considering when they make misinformed comments that cinema is dying."

Majestic have cinemas with one, two, three, four and five screens and Mr Dell knows exactly how much content each option allows you to program.

"In Kempsey, we will be showing all of the arthouse, animated, cultural, events, and even faith-based content as well as the latest blockbusters all at the same time.

"With three screens you miss out on a whole lot of stuff and you certainly can't do it with one or two screens because you've got new content coming in all of the time.

"If Kempsey wants a facility for the future then it needs to have four screens."

Cinemas pay a percentage of their ticket price to hire pieces of content and having more and smaller cinemas simply allows them to show more movies for a greater number of sessions and longer seasons, thus they can provide their consumers greater access and maximise profitability.

"In terms of what it means for the audience, we're talking about 10-12 discreet pieces of content every week from your blockbusters, to the middle sized movies, even though less are being released as Netflix is taking a lot of that ground, right through to the growing number of smaller select series movies, as well as live shows, concerts, and film festivals.

"We're talking about 150 to 170 sessions every week including special events, 12-14 hours a day, open every day except Christmas Day."

Mr Dell, who was president of the Independent Cinema Association of Australia at the time the deal to transition to digital was struck said the switch to digital also means you can design purpose-built cinemas more cost-effectively.

"Because we can design this from scratch Kempsey Cinema will be an optimum design.

"With 4 screens with around 180, 120, 80 and 60 seats Kempsey will be an absolutely workable model for both large and small events.

"It will have about 450 seats in total - the alternative is you could do 2 x 225 seaters or a 250 and a 200, and it would still have the same number of seats, but you reconfigure it so you can display more content at different times and give people what they want.

"The screens will be appropriate to the size of the room.

"You don't have to have 10m plus screens if you've got a smaller cinema,but when it fills your line of vision, has digital sound and picture it has all the impact that the big screen should. 

"It will be the best designed model that we've got among our cinemas and it means we can show that variety of content and offer consumers real choice and the convenience of multiple session times."

Mr Dell said the cinema would offer Kempsey's youth affordable entertainment.

"I've seen at the council meeting young people proactively saying 'we need something to do'.

"They're not going to come to the movies every day or every week even but once a month or quarter maybe.

"80 per cent of the Australian population went to the cinema at least once last year and I think you'll find young people tend to go more often.

"It's the most popular cultural attraction in the country.

"We do our best to keep the cost to a minimum.

"Our average ticket price is more like $10 to $11 - there's some lower than that, there's some special content that's set at a higher price, but we don't charge the same as the city and we offer group booking prices and special deals through our very popular movie club."

He also spoke of other more practical benefits to the community as well as fundraising opportunities.

"We have disability and respite groups from Kempsey coming en masse to Nambucca and Port right now, and they're saying to us - gee it'd be great if we didn't have to hire a bus and drive 40 mins.

"We also hold significant fundraising screenings and sponsor community groups.

"On the Mid North Coast we raise $100,000 each year for charitable causes.

"100 people turned up to one for breast Cancer Survivors and the Dragon Boat team in Port Macquarie recently and they made $1000 just off the cinema tickets.

"Again, four screens makes it much easier to hold those events regularly."

Another thing that's being missed, according to Mr Dell, is the $250,000 plus in wages, mostly for young people, that is currently being earnt and spent in other towns, as well as opportunities for training and personal development that are going to other youths.

"So we're talking about 20 jobs, and a number of them would be school kids but those are not full-time jobs, and this is where the confusion has been.

"I've heard people making claims that we've said there will be 20 full-time equivalent jobs.

"We never said that - that's not the case.

"Cinema with digital is a much more efficient way of doing things.

"We don't have projectionists anymore.

"It means that all of the young people we have on staff are focussed primarily on serving customers and learning about hospitality and customer service.

"It also means that you run at a lower cost, which makes it more viable and there's lots of good things about that.

"Regardless of how that money is split it will be $250,000 plus in wages going out directly into the Macleay community, and that's a conservative number.

"But it's not just about the money - it's about the training and opportunities for work experience.

"And we take very seriously the fact that for many young people it will be their first job and we take time to train them.

"We give them confidence and we've seen kids go on to be doctors and fighter pilots, as well as move into managerial roles with Majestic and other employers."

Mr Dell concluded by saying community was particularly important to Majestic and movies was in its blood.

"One of the things I've been really big on is keeping the feeling of us as being a local cinema even though we now have multiple sites and we do that by being part of the community.

"Movies is what we do, and we would like the people of Kempsey to have the same experience they can have in Port Macquarie and there's no reason why they can't under this proposal.”