Staff Training. Employees are continually trained in proper sales techniques.
Consumer promotions usually include a motivational element that rewards theatre staff for exceptional sales of certain promotional items.
Theatre Design. Our theatres are designed to optimize efficiencies at the concession stands, which include multiple service stations throughout a theatre to facilitate serving patrons in an
expedited manner. We strategically place large concession stands within theatres to heighten visibility, reduce the length of concession lines, and improve traffic flow around the concession stands. We have self-service cafeteria-style concession
areas in many of our domestic theatres, which allow customers to select their own refreshments and proceed to the cash register when they are ready. This design allows for efficient service, enhanced choices, impulse purchases and superior
visibility of concession items. In some of our international locations, we allow patrons to pre-order concession items, either online or at a kiosk, and pick them up in a dedicated line at the concession counter.
Cost Control. We negotiate prices for concession supplies directly with concession vendors and manufacturers to obtain volume
discounts and negotiate rebates. Concession supplies are generally distributed through a distribution network. The concession distributor distributes inventory to the theatres, which place orders directly with the vendors to replenish stock. We
conduct a weekly inventory of concession products at every theatre to ensure proper stock levels are maintained to appropriately serve our customers.
Pre-Feature Screen Advertising
In our domestic markets, our theatres are
part of the in-theatre digital network operated by National CineMedia, LLC, or NCM. NCM provides advertising to our theatres through its branded First Look pre-feature entertainment program and also handles lobby promotions and
displays for our theatres. We believe that the reach, scope and digital delivery capability of NCMs network provides an effective platform for national, regional and local advertisers to reach an engaged audience. We receive a monthly theatre
access fee for participation in the NCM network. In addition, we are entitled to receive mandatory quarterly distributions of excess cash from NCM. As of December 31, 2014, we had an approximate 19% ownership interest in NCM. See Note 6 to the
consolidated financial statements.
During 2011, our wholly-owned subsidiary Flix Media Publicidade E Entretenimento, Ltda.,
or Flix Media, began handling all of our screen advertising functions in Brazil. Our Flix Media marketing personnel work with local agencies and advertisers to coordinate screen advertising in our Brazil theatres. We have expanded the Flix Media
advertising services to another exhibitor in Brazil through a revenue share agreement. In Argentina, we also have in-house personnel that work with local advertisers to arrange screen advertising in our Argentina theatres. We are currently
integrating our Argentina advertising team with our Flix Media division. We recently acquired an advertising business in Chile, which we will also integrate with our Flix Media division. In our other international markets, we outsource our screen
advertising to local companies who have established relationships with local advertisers that provide similar benefits as NCM. The terms of our international screen advertising contracts vary by country. In some of these locations, we earn a
percentage of the screen advertising revenues collected by our partners and in other locations we are paid a fixed annual fee for access to our screens.
We will continue to expand Flix Media into our other international locations over the next few years. In addition to screen advertising in our theatres, we intend to expand Flix Medias services to
include, among other things, alternative content, online ticketing, and loyalty initiatives.
The motion picture exhibition industry has undertaken transformational technology initiatives over the past few years, as discussed below.