Cine M&A

M&A, for those who have been spared exposure to this particular abbreviation, stands for Mergers and Acquisitions.  This is very much the civil partnership of the corporate world: a place I do have to visit de temps en temps.  In a merger the marriage is somewhat mutual, whereas for an acquisition a shotgun tends to be involved – as I understand matters.

In a typical M&A scenario, a small company which does one thing well is taken over by a larger entity which may do many things with almost any level of competence (including none at all).  The combined entity is briefly larger, but almost immediately what remains of the small company ceases doing its one thing well.  The entity then contracts and may enter slow, but terminal decline or may later be re-born.   (I believe this process may be linked to the “creative destruction” on which capitalism seems to depend – it takes out both a large company and a small successful one, opening up new ecological niches to be exploited).  My sense is that M&A activity is nearly always bad news for the employees, customers and shareholders of both companies – but does benefit a range of corporate lawyers, bankers and a few senior managers.  Since the shareholders have to agree to both M and A, such people do seem to fit my favourite definition of insanity, viz doing the same thing but expecting a different outcome, very snugly.  I would also have thought that the senior managers may well be open to accusations of failing in their fiduciary duty by permitting such activity to occur as I had thought they were supposed to protect shareholder value.  In related “news”, it may just be me and some sort of selection bias or availability error in operation (or, indeed, poor journalistic standards), but whenever a captain of industry makes any pronouncement reported by the media, they do give the very convincing impression of being complete dunderheads (and should never be allowed to speak in public).  If so, the plan to promote such folk to a position where they can do less harm may be back-firing spectacularly for the UK plc.

OK, so “M&A” covered we now move on to the “cine” in our title.  I am a fairly frequent movie-goer and usually frequent my local art house fleapit (for the avoidance of doubt, I have never knowingly encountered a flea on these excursions) and in both Cambridge and Southampton, this has been a Picturehouse cinema.  A while back, Picturehouse was bought by Cineworld, a large chain of more mainstream cinemas – as with most M&A activity, it is quite hard to see why.  Some hope of economies of scale perhaps?  Megalomania? Mind-altering drugs?

When my local Picturehouse does not show a film that I want to see, then it has generally been to Cineworld that I have taken my film-going pound (or several).  So, I have some familiarity with both chains as a customer, I have no idea what it is like as an employee  – though those at Picturehouse do generally seem to be more invested in the process than their cousins at Cineworld (or may just be better actors).  In the last week, I have been to both – which in Southampton are situated pretty close to each other – and there is quite a contrast in the customer experience.  At the Harbour Lights (the local Picturehouse), you have a fairly small lobby with comfy seating (and a balcony overlooking the marina), fairly decent food offerings but the screens are modest in size, though you do get comfy, reclining seats on quite a steep rake and carpeted floors.  At Cineworld, the lobby is much larger but with standard cinema food (which doesn’t appeal to me at all) and nowhere comfy to sit.  The screens are much bigger, but the seats less comfy on a shallow rake and the floors are clearly designed to be wipe-clean.

As a sidebar, I do wonder why standard cinema cuisine is so awful – and generally rather noisy to eat?  Is the typical cinema-goer so hidebound by tradition that they insist on popcorn, nachos covered in a rubbery substance simulating cheese (badly) and fizzy pop?  I can’t believe I am alone in finding such offerings unappealing.  So much of the UK has a vibrant food culture, why has none of this made it into the mainstream cinema?  Anyway, given their proximity, if I have to visit the Cineworld I acquire my food and drink from the Harbour Lights (and it would seem that I am not alone).  However, this option is not available everywhere and one feels that mainstream cinema is missing out on a lot of potential income from that portion of the audience still blessed with functioning tastebuds.

Sidebar over, and I am now ready to merge the two parts of the title together.  As a customer, the change of ownership of Picturehouse has been mostly hidden – except for worries about the Arts Picturehouse in Cambridge, following the rather baffling opinion by the Competition and Mergers Authority that its presence in the same town as a Cineworld would harm competition.  (Given they have segmented the audience very successfully, are more than a mile apart, and both have to compete with a local MyVue this seems far less of an issue than, for example, the situation in Southampton where they are little more than 100 yards apart.)  However, a few weeks ago this situation changed as one of the primary curses of any M or A struck: I refer, of course, to the attempt to marry the IT systems.  The old Picturehouse website disappeared to be be replaced by a new one – well a new stop-gap one, the new one won’t be ready for some months (not entirely clear what the thinking was here, as it’s usually not a good plan to dispose of the old version of something when the replacement is still some months away).  This new website is decidedly clunky (though more modern-looking), and on launch did not allow you to see what films were showing or book tickets – though it could have been worse, for some cinemas it did show film times: the wrong film times.  It has also affected all the internal systems, so you cannot currently buy food or drink with a credit card: which these days does feel deliciously subversive as cash transactions are so much harder for the authorities to trace.  But, the staff have most of my sympathy: I only have to deal with the new IT once a week (or so), they have to fight their way around it every day – and in the knowledge that it will be changing again.  I also very much doubt that they are receiving extra money to deal with this hassle, and one cannot really tip at the cinema (well not in the UK, the US may well be different, as I believe there is no situation where tipping is inappropriate in our former colony).

And now for sidebar number 2 – on the topic of major IT implementations.  Both the news and personal experience would suggest that any major IT implementation will be a disaster – and yet, companies and governments continue to indulge in this very expensive luxury.  Why?  I (myself) take the view that once your employer starts to implement SAP, it is time to dust off your curriculum vitae and seek pastures new.  (I’m sure SAP is not unique in this respect, but for me it is very much the “poster-child”).

So, in conclusion, I can only hope that matters at Picturehouse will sort themselves out – despite the poor omens and/or odds – and that I will continue to be able to enjoy better food and comfy seating while at the movies.  Perhaps, I should also offer to take any overly stressed member of their staff out for a commiseratory (which I insist is a word, despite WordPress’s doubts) beer?  (Though, I might need to limit the geographical and temporal scope of this offer, if I am to avoid bankruptcy).


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