It was not so long ago that seeing the latest Tom Cruise or Julia Roberts movie meant waiting in lines 50 yards deep. Those days—along with Mr. Cruise’s blockbusters—are gone. Times have changed in the last few decades: the drive-in died, smaller theaters popped up throughout the country, the VCR came and went, and now we stream. Throughout it all, the theaters have remained. And while many a Gen Xer or Baby Boomer prefers to watch the latest movies from the comfort of home, others continue to enjoy movies on the big screen—but in smaller numbers.
CEO and co-founder of the upstart Atom Tickets, Ameesh Paleja, is a 12-year Amazon veteran who helped launch Prime Instant Video, Amazon’s Appstore, Cloud Drive, and the Kindle product line. Seeing an opportunity to bring modern ecommerce techniques to a popular and traditional form of entertainment, he and his partners started Atom two-and-a-half years ago. Since then, the company has become a popular choice, especially among Millennials. Its app and website not only sell movie tickets but also offer social features, special offers, and pre-orders for concessions. We spoke with Ameesh to learn a little more about working in the movie industry, and what we can expect from Atom in the future.
Why did you get interested in the movie space?
About three years ago, I was approached by the executives at Lionsgate. They presented me with a fascinating problem: there are five-and-a-half billion unsold seats in the U.S. theatrical market. That meant that if we could just sell one percent more seats, we’d have a billion-dollar box office opportunity.
It was also a field ripe for disruption. None of the innovation you’ve seen in the ecommerce space—recommendations, personalization, and machine learning—had made its way to the digital ticketing industry. There is a ton of interesting techniques we can use that have now evolved from their infancy to where consumers expect them.
Why did you start as a mobile-first solution?
Though we have a website, mobile is our primary platform. We focused on where people are engaged. Mobile phone usage in the U.S. is obviously huge and growing. When you think about outside of the U.S., it’s monstrous. In China or India or Japan, it’s basically the only thing people use.
I had also stumbled on an astonishing statistic that said on average, a person unlocks their smartphone 150 times a day. That’s on average. My dad unlocks it maybe 10 times a day, while people like me do it more like 400. That engagement with the device was a big deal and we wanted to be close to that customer.
Why aren’t people going to the movies more?
One of the big pain points is planning. All of us have experienced it. Whether it’s these crazy group texts, email chains, or posts on Facebook, nobody can get their act together. That’s why we added group invite features to the app.
There are also a lot of ambivalent people sitting on the fence. We realized that social influencers could play a big role in getting them into theaters. Most people just want to go out with their friends and family. Let’s say a bunch of your friends want to go see Star Wars and you aren’t interested in it—but you are interested in hanging out with them. We found the opportunity to leverage social influencers with these people.
Can you tell us some of the ways you’re changing the buying process for moviegoers?
Most new ecommerce experiences are taking on pain points and inconveniences in the purchasing process. With Amazon Go, the new grocery store, they’ve made it so you can shop without standing in line or seeing a cashier.
We looked at the entire ticket-purchasing process and found ways to make it easier. For example, we deployed tablet scanners inside the theater so people can skip the lines.
Another of the big things we do is pre-ordering concessions, so they don’t have to wait in line for popcorn or soda. In addition, we can send targeted coupons. For example, let’s say I know you like Junior Mints. If you haven’t been to the movies recently, I can offer you a box of Junior Mints if you go. And if I know that when I get you to come to the movies, you’ll bring a few other people. Then, it becomes a simple ROI equation. The studio is happy because it’s getting revenue. The exhibitor is happy because your friends are buying popcorn. And you’re happy because you love your Junior Mints.
Seems like a win-win.
I am glad you pointed it out. When we talk about disruption of space, typically there is somebody that gets the short end of the stick. In this space, we make everyone happy. It’s a very unusual situation, which is one reason I was so attracted to it.
What have you found to be the major driver of adoption growth?
It’s a somewhat complicated question because we’re now moving from our infancy to our adolescence in terms of customer adoption and growth. Early on, we did a very good job of engaging customers through standard digital paths. Over 50 percent of our customers came from other people inviting them to the movies. We’re seeing that those who get invited by the app are likely to download it. Then, after they use it two or three times, there is a very high likelihood that they are going to invite new friends to join.
That said, we are still at a place where our biggest hurdle is awareness. Candidly, people just don’t know about us. Customer acquisition has now shifted from simply leveraging digital channels to supplementing that with un-aided awareness campaigns.
One of the more unique features of your app is the user experience. Was that by design?
With over a thousand apps deployed every day, it’s incredibly hard to differentiate yourself in the app stores. Part of the way that we do that is by having an incredible customer experience. It has to be unique, it has to be innovative, but it also has to be engineered well. Our customers are getting 60 frames a second, and it’s really smooth whether they have a $50 Android phone from Best Buy or a brand new iPhone.
What is the biggest difference between the movie industry and technology companies like Amazon?
Speed. Movies take two or three years to get developed and a lot of the economics are built in way up front. So there is a significant amount of lead time to affect change.
At first, I said, “Why can’t we just move faster? The data says this, so let’s just do that.” What I have come to understand and appreciate is that the machine is extremely complicated. That’s not an excuse; it’s an explanation of why it takes longer to innovate in a substantial way. We’re like a tugboat trying to steer an ocean liner.
Building trust is a big part of our process. Movie people bleed for their art. I really didn’t understand that until I actually sat down and saw what they have to do to get these incredible stories to consumers. I am so accustomed to solving problems through data that solving problems through relationships is a new experience for me.
Are you planning to incorporate more brand content?
Our brand partners and advertisers are important to us, however, so is customer experience. One thing we’re trying to do is create integrated opportunities to expose brands—at the point where they are endemic to a better experience. If it’s about helping the customer enjoy their night out, there should be a clean way to integrate advertising into the experience.
What’s your favorite part of this?
The nice thing about movies is that the whole country loves to watch them. Seventy-seven percent of the United States will go see at least one movie a year. It’s one of the most egalitarian and recession-proof forms of entertainment out there. Think about it—there is something for a three-year-old all the way up to a 93-year-old. For men, for women, for every race, for every ethnicity, you know, movies basically are the broadest entertainment category that exists.
We keep innovating. In 2016, we created pre-ordering concessions for the exhibitors, and that was a big deal. We also made a deal with Rogue One that connected the Disney consumer products division with the Disney Studios team. We are now selling T-shirts and hoodies for Star Wars when you buy your ticket, which has been successful for us.
In 2017, we’ll continue on that path. That drum beat of innovation will get louder and faster over time. But it’s also about building relationships with all of our partners—so that they feel comfortable with the changes that we’re making.