For movie theater owners CinemaCon is an annual event where movie studio executives and actors present their upcoming films. Of course, it also brings members of the concessions, seating, ticketing, etc. industries to show off their latest products that theaters can utilize to make the movie-going experience even better for audiences.
One of these products showcased at this year's Cinemacon is an Intelligent Entertainment Suite by Savantis. FlickDirect's Nathan Rose sat with Keith Hontz and David Bents to learn more about this new tool theaters can use to customize seating, concessions, and more to everyone. So, sit back, relax and find out what the future holds for movie theaters.
Introduction: IES by Savantis is the world's first, fully integrated cloud-based omnichannel solution built on SAP commerce and marketing. It helps manage business operations for cinemas, entertainment venues, restaurants, and retailers. With over 25 embedded accelerators built by Savantis for consumer-facing and back-office operations, companies can now organize their business processes and build enterprise resilience.
Keith Hontz
So there you go. So Intelligent Entertainment Suite or IES as we like to call it for short. It's a full-service solution for cinemas to operate their business from a front office and back office perspective, whether it's a small or medium circuit or some of the largest server companies in the world. So we're excited to be showcasing this year. In terms of my background I from actually a SAP background. Are you familiar with SAP?
So the big behemoths and enterprise application software are Microsoft, Oracle, salesforce.com, SAP. Those are the big players in enterprise application software. So what we did, we're an SAP implementer. So we're an SAP gold partner. I spent 23 years at SAP in Philadelphia, and then I came over to Savantis last July and ran the operations here. But we do have an industry focus specifically on media and entertainment.
From an industry perspective, we have about 750 employees globally, and about 240 plus customers. One of our most valued customers is ArcLight Cinemas and Pacific Theaters on the West Coast. Rest in peace, as people would have been saying, but David was instrumental in the development of what you just saw in that video, the Intelligent Entertainment Suite. So we basically took the stand the SAP platform and we customized it for a cinema company. And so we were in the process of replacing Vista in five of their 18 cinemas, then the pandemic hit. So that's kind of, unfortunately, what happened with that, but we have the product. It's been developed for the largest cinema companies in the world. These are all SAP customers. So SAP runs all the... Most of the Fortune 1000 companies. They're in Walmart and Costco.
So I stayed most of my career at SAP on the customer experience side. So the front office, so we definitely competed against salesforce.com up there, but these are all live SAP customers. So not only will you see companies like Sony, Warner Brothers, Disney, all SAP customers, as well as some of the larger consumer companies and retailers.
Nathan Rose:
So they have a turnkey solution since they're already customers of the system to be able to implement this?
Keith Hontz:
Completely. Yeah, absolutely. Yeah. So they run on SAP software. Exactly. And then from an industry perspective, if you look at media entertainment, and hospitality, lots of good customers are running on SAP. So you think about amusement park corporations, cruise lines, Apple Leisure Group which just got acquired by Hyatt is an SAP customer of ours that we help support their SAP system. So just a little bit about sort of SAP and sort of their global footprint, some of the other companies that use SAP software. And then, of course, some of these logos you're probably familiar with on the media and entertainment side, all running SAP solutions. Okay. And so what we did is we took the Intelligent Entertainment Suite, put that up on the SAP Store. So it's the officially vetted certified platform built for cinema companies. And that's something that we did when I joined Savantis in a matter of months.
So we built, with David's help and expertise, these 25 industry accelerators. So we took standard SAP. Then we built a point of sale. Then we built consumer web applications. Then we built some of the loyalty capability, digital signage. So all of the things that a cinema needs to run, we built a lot of these accelerators. And then I just have a couple of quick screenshots, but I want to give you guys an opportunity to ask some questions. But what I do want to say is with regards to Pacific Theaters and ArcLight Cinemas on the West Coast, primarily 18 locations, David was instrumental in rolling out SAP for the back office piece. So the financials, if you will. And then we started on the district replacement efforts.
David Bent:
So my background, I was involved in the Warner Brothers international theaters, 148 multiplexes for them all over the world, So then I went off and worked in the medical business in a large distribution business. Where we had 750 technicians with devices running around the country every day and then came back into our clients. And I found that systems that we were using 20 years ago are still kind of the systems cinemas are using now, as businesses it has moved on. So you just look at the difficulty of knowing your customer, right? That's not an easy thing to do with the type of technology that exists in the back offices. Every single cinema has multiple client-server systems in it.
Let's think about that. You've got hundreds of these things scattered across the country. They're going to break down, you've got to maintain them, reliability of service. It's as bad as going to the cinema and a projector not working, as going to the cinema and the ticketing system or not being able to buy a drink or being told you can't use your credit card because the credit card machine's down, I had to pay cash. And by the way, handling cash, it's a real... As a business... As a country, if we can get rid of cash it would be great, right?
Nathan Rose:
I've been saying that since 1989.
David Bent:
Here you got this enterprise solution, that's rock solid. That runs gas, that runs target, that runs major, major retailers, that backend system put it all in the Cloud. So now you have no equipment in the cinema, a bit frightening, right? Because what happens if the internet goes down? The resolution for that, you have what's called direct wireless backup. And now all of a sudden you're transacting with thoroughly modern systems. So you get other stuff like you're able to amalgamate information on your customers. You don't market to them one for one, you two go to the cinema the same day, different parties, you eat popcorn, you eat hot dogs. The last thing I want to do is give you a discount on popcorn, give you a discount on hot dogs.
That's not a good idea, right? So the sorts of simplistic things you can do, but marketing one-to-one knowing about your customer, knowing do they like to sit on the end of an aisle? So they always sit at the end of an aisle. So when you show them the best available seats online, it's going to pre-select an aisle seat for them. And so it'll be a smoother transaction for them. That's just one example of stuff you can do when you have truly integrated systems. When you understand who your customer is, it's got nothing to do with loyalty systems. It's got nothing to do with... You can have loyalty systems, you can have all of that as well. But I just feel this industry cannot be using its core technology for transactions and having it based on stuff that was 25 years ago. It just doesn't make sense. So, that was really the reason behind it. So, we looked at it and said, okay... And then the other thing is, training of your staff, just take something as simple as that. Training your staff on a PC-based system point of sale. I think that we used to spend maybe, probably a man week, training each person when you bring them on. When we were rolling this out our point of sale, it's all based on the... It's basically a mobile phone, right?
David Bent:
So, we're all doing this every day long, right? And we just know how to do it. You don't get an instruction manual for how to do it. Well, that's how this software is built. So we found that the kids, we'd go and stand alongside the kids, train them. And after about 10 minutes, they were pushing us away. "Leave me alone. I know how to do it. It's okay." Just thinking about what that means for a cinema circuit, in terms of, they have high turnover staff, right? Generally. It's very often that a student population for the busy times, coming into the holidays. Being able to bring people up to speed quickly and have something they're familiar with, the same sorts of gestures and the same sort of, how do I get rid of something? I just do that. Just swipe to roll it out. I think we'll all come together to make this make economic sense for a major operator. Ultra-modern consumer-grade user experience. And that's something that a lot of cinema companies are telling us they don't have today so. This industry is very right for disruption. So there's not a lot of alternatives. And there's not a lot of options.
Keith Hontz:
And when you can put something like this in front of the hands of cinema executives, it catches their attention very quickly. It's like a user experience they've never seen before based on some of the quotes that we're getting. And so it's pretty interesting to see the amount of demand even during the pandemic folks are looking to retool. They're looking to modernize their infrastructure and our technology at a time when the cinema is not jammed up with moviegoers, right? So it's an opportune time, which is why we heavily invested in CinemaCon. Which we believe it's a great event for us to help spread the word on an option that a lot of folks didn't realize existed out there so.
Nathan Rose:
Definitely. Now, as far as you said, it was a good time for a lot of people to upgrade during COVID, did you have some hesitancy or some pushback because they weren't sure?
Keith Hontz:
Yeah. I mean, there's certainly the budgets and the financials for any cinema, large, medium or small, are a big challenge. And so there's not a lot of discretionary funding available for larger projects. And so we certainly understood that and we saw that loud and clear. However, it didn't stop us from having the discussions and looking at their requirements and where they want to take their current state platforms into the future. Just timing-wise, it's not something that folks were probably as ready to move forward on when their doors are closed and there's no revenue coming in. And there's a 40% loss of revenue year over year. So, that is a... It's a real challenge. However, as we're hearing with the international outlook, the future outlook is bright.
I think there's a lot of pent-up demand. So for us to continue to push and leverage all of the great work that was done at ArcLight and Pacific, although they're no longer a live customer of ours, the fact of the matter is it was a success story and they saw benefits. They saw lots of improvements in their operations.
David Bent:
It doesn't necessarily work the way you're thinking about it. You see it because you're thinking about, oh, I had this investment in this ticketing and concession system. And you're thinking in terms of how much of the point of sale costs me the hardware, right? Three grand. How much does the server cost me on the backside? 10 grand. By the way, we need to replace those things every three years anyway, right? The point of sale device, the actual double-sided touch screen is a sub $500 device.
Nathan Rose:
Cost-effective.
David Bent:
Windows licensing, you've got that. So there are all these things that they've been spending money on every year and having to maintain and whatever, and to go and replace the... You're not replacing the equipment, you're taking it out and you put something in. You just putting something down on the counter that's wireless.
That you can manage remotely. So we would be able to upgrade the software on all of our points of sale around the circuit in less than 60 seconds, centrally one person dealing with that.
Nathan Rose:
So they're able to push out?
David Bent:
There are some very advanced tools that they've got that allow you to use it. It's not like a Windows upgrade...If we were doing Windows, you're going to be sitting here for two or three minutes, at least. So this thing is going to come up now and we're going to be done in less than 30 seconds and back home working, right. And this is what it does. So not that you do need to restart it, but say you needed to do an upgrade in the middle of the day for some purpose. This is the total amount of time that your system would be down. Now, and that was an overnight process in a normal... So it's back up. Right. And it's literally that quick. So that's when you're running a business, you need to be doing things that are the way you do it now, not the way we did it 25 years ago or 20 years ago.
Nathan Rose:
Yeah. Especially with patience is... Everything needs to be now, now, now in this kind of atmosphere.
David Bent:
Also, is anybody thinking about virus attacks and hacking? I mean, what happens if a cinema circuit that's based on Windows client-server technology gets hacked and their stuff gets encrypted and they can't access their systems for days or weeks because they've been held ransom?
So this really is a different game if you're dealing with enterprise-level software, where you've got enterprise security, you've got real protections, and far more difficult for anybody to do anything against you.
Nathan Rose:
Very true. Now, as far as setting this up, how long is the process from the beginning to end, if let's say a movie theater chain comes and says, "I want to do X amount of theaters in this amount of time", what's the process look like for you day-to-day to get one of the... Just one theater up? Is it a very long process or since most of the stuff is already written and you just have to customize it? Is it a very simple process? It's more than just getting the hardware in there?
David Bent:
Let's talk about the hardware, that's a good question to start with. So as long as you've got your internet connectivity there, if you needed to get direct wireless as a backup, that's going to take you a week. The actual putting the equipment down in a sort of 10 plaques, 12 plates, 15 plaques, is going to take about two and a half hours because you literally put the till down, plug it in and it connects wirelessly to what you've got. There's no cabling, there's no... So it's very, very quick. Now to roll your circuit out will depend how much commonality you have between your locations. So if you're selling 80% of the same product, and you've only got to customize... Do different keyboard layouts for this cinema with a little bit, but if you're using the same stuff everywhere, the great thing about doing it in the system in the Cloud, it's one system, that keyboard's available in every location instantly.
So it just depends on how different your locations are. I'm not talking about seating plans. I mean, They're relatively quick to build anyway, but most of us these days have auditoriums numbered one through 10, right? Okay. Well, the one through 10 in the next location, the only thing different is having the seats that are in the auditorium one, right. So really it's not as complicated as you think. It provides you have some commonality between your locations.
Nathan Rose:
Let's say a company has a legacy system that they want to use, say they have an employee that's dead set, needs to use QuickBooks for everything. How do you handle the implementation or their APIs that then you use to develop? Do they have developers to develop it, or is it something that you can do and help them move further along?
Keith Hontz:
Yeah. So that's a great question. In fact, we were talking to a very large cinema company. That's running Oracle PeopleSoft for their financials and their HR. So they're running this on the front end. And so they were asking, would it be possible for us to turn on Intelligent Entertainment Suite as a front end or replace the Vista capabilities of the ticketing and food and beverage and point of sale, and then hook that back into their PeopleSoft. And so, like David experienced at Pacific and ArcLight, there was a time that they're running multiple systems. So there is going to be some time spent on some custom integration via APIs. SAP is a very open platform. So the ability to connect to other systems is there and have bi-directional synchronization integration of the information is something that would be part of that project.
And so back to your other question, we would build it, let's say it's a 20 location circuit. We would build, let's call a standard template, that has the branding and the look and feel, and the offerings and the... All of that sort of standardized capability. And that would be the model template that we would use to roll that out to all the rest of the location. So we sort of build it once and then use our standard implementation plan, just like Target would roll-out to their retail stores, for example, so that we use a lot of the SAP implementation methodologies when we look at roll-outs and some of the things that we do even on a global level.
So I'm actually working in another industry at the moment doing some consulting work and it's actually automobile manufacturing. So they've got an SAP backbone as well, same basic backbone that we've got here. And they have major systems that interface to that. So SAP comes with a full API setup basically. So they've got integration. So now the actual standard implementation is through that Cloud version, right, through the actual SAP Cloud integration. So basically, and they've already done integrations, the Oracle financials as well. So, I mean, there isn't... I haven't come across anything as long as the other software product has an API set. So the way we interfaced for this to take an example to Fandango, all right, Fandango has a full API set. So we just connected these two things together and all the communication to Fandango and SAP is instantaneous across the... Through the API set, systems...
Nathan Rose:
And then as far as let's say, there was technical issues. There's definitely someone there at all times, 24/7, to be able to help someone with the system and get them where they need to be just in case there's a crisis that happens during the day or even in the evening?
Keith Hontz:
That's the best part about this solution is one of the hidden benefits of going with an SAP Cloud-based solution. SAP is a massive company. And so they have dedicated teams, 24/7, 365, that will be monitoring the systems that will be doing performance tuning. And it's all part of the standard subscription. So this is sold on a subscription model, just like you would pay your electric bill. So it's a standard monthly, quarterly, or an annual fee, but in that fee, it includes all of that sort of operational rigor and support. And so we hear from other cinema companies saying, "Hey, the customer service is slow or our system performance is not so good. It takes too long to build new functionality. And so our cost per screen is high." And so all of these things, there's no infrastructure required here. So they're not a single server you need to purchase.
There's no setup, SAP and Savantis take care of the implementation effort and the rollout. And we enable the customer to really take care of their own sort of environment. And obviously, we're still going to be there to provide what we call application management. And we always have SAP that's running the environment for us. So, that's another sort of de-risking of your overall operations.
Nathan Rose:
I know that would be a concern for some of them, especially if there's a crisis, all of a sudden it's 11:00 PM on the West Coast and everyone's on the East Coast. If the customer services there is already gone to sleep.
Keith Hontz:
It is a global support service, so we have centers all around the world that are constantly monitored 24/7.
David Bent:
If you think back to the Star Wars situation in the US a couple of years ago where all the ticketing systems went down.
Nathan Rose:
This would have definitely helped.
David Bent:
Why does Target system work on the holiday or on black Friday, when on a Tuesday afternoon, it works? How come? Do they have to have all this capacity sitting there by this huge capacity so they can take care of... Not in the way it works. So the way this works is that on a Tuesday afternoon, the largest cinema circuit in the country, maybe just have one server in the Cloud running. As it gets to four and five o'clock in the evening and business is picking up the system, not some human, the system will spin up additional resource that it will bring on the side and to the extent that everything will get re-built up. And then the second thing about it is it's fully redundant. So if you're in either SAP's Cloud or AWS' Cloud, you don't have to worry about whether your server centers going to burn down because you're in another service center simultaneously anyway, and unbeknown to you, the traffic... I mean, the system is fully redundant.
Nathan Rose:
One trend lately is putting everything in the cloud, putting it on the edge that's closest to the consumer. We've seen Amazon has done that with CloudFront. Rackspace has done it with some of their technologies. Is that the same thing that you do with this?
David Bent:
Automatically in AWS, right. They're going to move that closest to the user. So, I mean, if you just look at something, I'm getting a signal, an electrical signal from the East Coast to the West Coast, that's just under a second. So if you're moving all of your graphical content from the West Coast to the East Coast, for instance, you might hit some issues. So basically travel for it to move all of that content closer. Certain information has to go all the way and the timeframe is going to serve up the rest of the data quicker.
Nathan Rose:
That leads me to my final question. Lately, it's all been about customization and that is something that most systems that are out there today do not have. So initially when someone goes in they start with a blank slate, blank profile, and then through their movie purchases, concession purchases, you build up basically a database of what they would like or what their habits are. And you can easily offer those too and push out, as you said, deals to them on the platform?
David Bent:
When you set up your films, right? You set up your film master, you might say, take this as horror and you can put tags on these things. And then the system just... It's got AI in it, it's artificial intelligence. It just knows and looks and finds the common threads. And it's got this really interesting view of an account where it's a circle in the middle and there are all these spiderwebs going out from it into things. And so you can see for each customer, it will show you some tag words that will be small and some words will be large. So if you watch horror movies a lot, horror would be large on your word cloud. And if you don't, horror will be small. If you buy vodka, vodka will be there. If you buy soda... And so basically it builds a weighted profile of everybody individually. And then you can then use that in the marketing tool or in any of the other tools that come with it. You don't have to configure that yourself. It just does it.
Keith Hontz:
Think about it as a movie-goer insight. And so you can identify trends, you can understand preferences, all the interaction history-you can mind that information. So it's AI machine learning. It can actually build a lot of intelligence on how you engage with that consumer. And so that's already built-in, and that's a standard capability that can be leveraged in.
Nathan Rose:
I think that's a really huge selling point.
David Bent:
Where do you like to sit in the auditorium when you're there? Where do you sit? When you go online and it suggests the seats you're in, why is it going to suggest to you two in the front on the side? It's going to learn where you sit. And it's going to offer you the seats, the two best seats of where it thinks you want to sit, and subconsciously that will be a better buying experience for you.
Nathan Rose:
Most definitely. How has the feedback been?
Keith Hontz:
It's been overwhelming actually. The 90-second video that we started this presentation with, people see that 90-second video, they call us back right after they see it. And they say, "We want to learn more, tell us more about how we might be able to leverage this platform." So you can just see in that 90 seconds, we sponsored the Dine-in Cinema Summit earlier on this year, two or three cinema companies literally called us that same day and said, "Wow, this has everything that we need. The user experience is like no other we've ever seen before. It looks robust. It looks scalable. It looks like it's going to give us the flexibility as we move into the future, as we continue to expand. It looks like it can handle a family entertainment complex, not just a traditional theater, we're selling lots of food and beverage and what have you."
So I think the appetite is there. The demand we're seeing is I think pretty unprecedented. So it just comes back to the economic challenge of actually making some things happen sooner than later. So I think what we've done here is really special. I think it's the best-kept secret in the industry.
Nathan Rose:
Well, I think the system is fantastic. I would like to be able to use some system like this myself.
Keith Hontz:
Appreciate that, that's awesome. I think we've covered a lot of ground. I think we hit all the major points I wanted to share with you. So yeah, we really appreciate you guys spending the time with us.
For more information about Savantis visit their official website at https://www.savantis.com.
About Savantis
Since 1999, Savantis has been helping companies drive strategic initiatives for sustainable growth by delivering end-to-end solutions that integrate with world-leading business software from SAP®. A leading strategic implementation partner within the SAP ecosystem, specializing in expert consulting, outsourcing, and IT staffing, Savantis has earned a reputation for delivering successful and cost-effective IT projects for its clients. Savantis enables organizations to operate more efficiently by solving challenges through digital innovation with the expertise of its people and the quality of its products and processes. Savantis supports the complete enterprise SAP application portfolio - CRM and Customer Experience, ERP and Finance, and Business Technology Platform - and has industry-leading expertise in SAP S/4HANA, SAP CX, and other innovative technologies for retail, alcohol beverage, and cinema.
Headquartered in Exton, Pennsylvania, US, Savantis has a global team of over 750 employees servicing 280 customers worldwide. Visit www.savantis.com to learn more.
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE in Germany and other countries. Please see https://www.sap.com/copyright for additional trademark information and notices. All other product and service names mentioned are the trademarks of their respective companies.
About CinemaCon
CinemaCon attracts more than 7,500 motion picture professionals from all facets of the industry - from exhibition and distribution to the equipment and concession areas - all on hand to celebrate the movie-going experience and the cinema industry. From exclusive Hollywood product presentations highlighting a slate of upcoming films, to must-see premiere feature screenings, to the biggest stars, producers, and directors, CinemaCon will help jumpstart the excitement and buzz that powers the box office.
Tags: savantis, cinemacon, movie theater, mobile app
