TBY talks to Martín Schwartz, Entertainment Division Executive Manager at El Rosado, on developing the cinema industry through unique concepts, technology distribution, and developing restaurant franchises.
TBY When did you start running fast food restaurants and developing the entertainment division?
MARTIN SCHWARTZ In the beginning, it was called the cinema division. It was opened with three cinema complexes; there were 35 screens and two fast food restaurants. After that, the concept changed.
What opportunity for growth did you see at that time?
From a cinema point of view, Multicines had just with two complexes in Quito and 30% of the market. Cinemark had 50% of the market in Ecuador. They ran minimal operations for almost 10 years. They did not invest in the market, and I saw that as an opportunity. In the beginning, I wanted to make a lot of changes to the cinema industry because I had a different vision of how it should be. This is when we started to build new complexes, but under a new, more modern logo. This is when I began developing cinemas with new concepts in different countries as well. I developed the GT-MAX concept, the VIP concept, and the digital concept. Ecuador was the first country with digital cinema in the region. We started on par with Mexico and Brazil, which were the first countries with digital projectors in Latin America. Now we have 160 screens in the country and have a 65% market share. We are continuing to grow with 30 screens per year and I think in the next two years we will have more than 200 screens.
What is behind this massive growth?
We are going to open cinema complexes in cities that have no cinemas, such as Daule and Latacunga. We will increase the number of screens in malls and we will open another complex in Samborondón, a commercial city. Quito will also gain another complex in the south of the city. We have many ongoing projects . In other countries, companies are beginning to invest in the interior, whereas in Ecuador this will be done in three or four years.
Why has the GT-MAX concept been so successful?
It is unique in the world. The concept of GT-MAX revolves around huge screens. We wanted to develop a concept that can maximize the capabilities of the 35 mm projector. We went with a special German projector that can project onto a huge screen called Chemtone. It is expensive and costs about five times the price of a normal projector, but it makes a difference with a very special sound model and design. There are 600 seats and you can see the film from anywhere in the cinema. The screen is 24 meters by 17 meters.
How important has innovation been to staying ahead in this industry?
We have received awards and many people have asked about the GT-MAX concept and now it is digital 3D. We also developed the VIP concept in 2004. At that time, not a lot of cinemas offered a VIP concept, and we started with digital cinema and invested a lot of money into it. After a year we started to screen open air and run digital 3D operations. We have an agreement with an opera house in London and we screened the final of Wimbledon in digital 3D as well as other live sports events. We started with Super Educa, which is an educational concept that we have in the cinemas. We try to stay ahead of the game in terms of cinema innovation. We have also worked with Warner to change the release date of movies, because in the past they came very late to Ecuador. After they were released in the US, a film typically took six months to come to Ecuador. We started to bring in new copies and release the movies on the same day as in the US. That was a huge change and after us, all of the other studios started to do the same. We have also had birthdays and weddings in our cinemas. A registrar marries the couple, and afterwards they watch a movie.
You are now entering the cinema production business. How is this progressing?
In 2011 we co-produced a movie called Prometeo Deportado. It is a dramatic topic, but it is a very significant film for Ecuador as well as for other countries as well. The vision of the Ecuadorean immigrant is a very difficult one.
Do you plan to develop this this part of the business?
This was the second time that we invested in a movie. The first time we invested in Crónicas with Sebastián Cordero, and the second time we participated more with Prometeo Deportado. It keeps coming up, and we often have enquiries.
How do you fight the illegal distribution of music and films?
We are working hard and moving forward. In the cinema division, I am convinced that our biggest competitive edge is technology, such as huge, high-definition screens. We always need to be working at reinventing the experience.
Do you feel that Ecuador is an attractive place for making films and how would you attract filmmakers to the country?
We have many places suitable for making movies. There are the highlands, Latacunga, and Riobamba, which are all places where beautiful footage can be shot. There are many places that can be adapted to films.
What opportunities do the Galápagos Islands offer?
The Galápagos Islands are a great place for shooting a movie. I wanted to do a movie about the Galápagos, because the only movie there is is very old and I think there is a place for a new 3D movie about the Galápagos.
You own the distribution rights for Apple, Sony, and Bose. What is the extent of your role in technology distribution?
We started with the Apple Stores. It was difficult to create a business model that can support only music and movies. This is difficult everywhere in the world and I wanted to bring in some brands that could attract more people. Apple was very unknown here in Ecuador. I wanted to open an Apple Store that not only sells a few Apple products, but is an exclusive Apple Store. It is only the iPhone that we do not have, mainly because the telecommunications companies here do not support it. We started with one store and now we have six. We sell a lot of iPads as well, because this is a place where people really use technology. We also have exclusivity on Bose products.
How have you worked to develop the Carl Jr.’s chain of restaurants?
It has a different concept for a fast food restaurant. McDonald’s brings kids in with the happy meal concept, and Burger King has its own concept. We try to cater to young adolescents with Carl Jr.’s. Young people are our target, and you can see this on our web advertisements. It is very nice and really different. We had to make a decision as to what we were going to do with the brand; it is very difficult for a local brand to compete with a big chain. We have five restaurants right now, but by the end of the year we will have 13 Carl Jr.’s restaurants.
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