“He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery.”
In 1972, a 42 year old man by the name of Maurice was attending a dinner party in Manhattan when he struck up a conversation with another man whose family owned movie theaters. Maurice, always the curious type, asked the man how the family business was doing. The man answered rather bluntly: “TV is ruining us. People just don’t go to the movies the way they used to.” He said the theater was lucky to have 120 people attending a movie that held 1,200 seats.
Perhaps this man was merely resigned to the inevitable: that industries come, and industries go, and that larger forces such as new technologies, more competition, lower cost alternatives and changing demographic forces conspire to reduce demand for a the products and services of many industries, and ultimately decimate established businesses over time.
Maurice, on the other hand, was surprised to hear this man’s claims. It was Manhattan, after all, a dense borough of 1.5 million people. And so he set out to undertake his own form of guerilla-style market research. After all, he was always the curious type.
- He visited several movies and counted the house. It was generally small;
- He observed who was attending movies. It was mainly younger people in their 20’s and 30’s;
- He began creating storytelling scenarios about these moviegoers to try to understand what motivated them. He concluded that there would always be a small group of avid moviegoers;
- He then asked if there was a small group of avid moviegoers, what was keeping them away from any given movie? This was his “a-ha” moment. He reasoned that thousands of people were attending movies on any given night, but they don’t attend a specific theater because they prefer to see a different movie being shown that night.
If movies are the product a movie theater sells, then another way to frame this problem is that the product assortment is too narrow to attract a broader set of customers.
Instead of concentrating on increasing the number of customers for one film, why not increase the number of offerings? Without requiring any more ticket takers, concession-stand workers or projectionists, you could easily multiply your profit. And instead of complaining about your shrinking audience, you’d be giving that audience more viewing choices and a novel atmosphere.
After some testing of the idea, one of the first multiplex movie theaters was born as Quad Cinema. Quad Cinema was profitable since opening in October, 1972 and is still operating today.
By framing the problem not in terms of external changes, but rather in terms of what opportunities the movie theater operator was missing to serve more customers, he found a solution to broaden its appeal, attract more customers and build a growth business in what at the time was a dying industry.
With little or more than an opening question based on an underlying disbelief that the status quo made sense, a deep level of curiosity and the skills of observation and storytelling, Kanbar was able to apply an outside perspective to a single movie theater and reinvent an existing industry.