It’s that time of year in the Northern Hemisphere where everyone wanders off on vacation at the end of summer. It’s very easy to let an important piece of news slip by without digesting it properly. So, I wanted to take a moment to highlight the announcement made early last week that Hoyts Cinemas had chosen deploy Arts Alliance Media‘s (AAM) Theatre Management System across their 400 screens in Australia and New Zealand.

It would be incredibly easy to brush the news off as just another press release from a digital cinema vendor. After all AAM has developed a TMS for the deployments it is undertaking in Europe. It’s not as if they have to build it from scratch. I’d argue however that it’s a bit more meaningful because Adam Wrightson was a part of the decision making process at Hoyts.

Wrightson is Hoyts, Group Technology Director and anyone that knows him, or has ever worked with him, knows how thorough he is when it comes to the technology the chain chooses to install. Presently he is working with Digital Cinema Implementation Partners Australia (DCIPA) to roll out digital cinema throughout Hoyts.

Any system or software developer that wants to do business with Hoyts has to get past Wrightson’s wary eye which is no easy task. After all, Wrightson is the kind of guy that can judiciously put together a detailed technical requirements document that leaves few if any engineering questions unanswered. A few years ago Wrightson sent me a specification document he wrote for a digital advertising network which came in at a mere 80 pages and had more color figures and diagrams than a world atlas. Getting a nod from Wrightson may as well be the digital cinema equivalent of being knighted.

Of course that’s just one of the reason’s to take note of last week’s announcement. A few others were highlighted by Howard Kiedasch, CEO of AAM, when I spoke with him via email shortly after the deal was announced. Our conversation follows. I hope to get Wrightson’s side of the story sometime during the next week and I’ll be sure to post it.

Celluloid Junkie: Was it always AAM’s intention to sell its TMS outside the deployments it was managing? When was the decision made to sell the software independently?

Howard Kiedasch: To be honest, it was something we had in the back of our minds but selling the TMS independently was not our first objective. We had been initially focused on our VPF clients as that was the task before us. However, the software was always built with the intention that it could eventually be sold separately. After we developed the product, saw what was in the marketplace and demonstrated our product to others, we believed we were offering something better than any of our competitors.

CJ: When did you start developing your TMS?

HK: Though we have been in the digital cinema business for over seven years, we did not start initially developing our own TMS. By starting later, we were able to learn from some of the mistakes others had made and review their products before building our own. I’m very proud of what our team has built and the reaction we’ve been getting by all those who see it. We have the best development team in the business and I’m really excited about what we will be doing next.

What was surprising (and we never really anticipated commercialising) is our back office VPF billing, reporting and asset management software. That software was developed because we needed it to manage our agreements with the studios and the financiers. However 9 months ago, we realised there are others who are signing VPF agreements and putting together financing packages but need some way of managing those deals. We’ve created the necessary software and process so it is easy for us to help others jump into the game without them having to reinvent the wheel.

CJ: So then would you say there are advantages to being an integrator when designing a TMS for the broader market beyond a tool AAM will have to use?

HK: With over five years of DC operation having installed over 700 screens and working with exhibitors in 8 different countries, we’ve seen a wide range of needs and desires from our cinema partners. Pulling together all this knowledge and experience allows us to deliver a product that can work under numerous scenarios and support many different operator requirements. Sure, cinemas in one country are generally the same as cinemas in another but there are always local idiosyncrasies that will be important to that specific customer. We believe in being flexible and servicing those various requirements.

CJ: What are some of the challenges of being a “software” or “enterprise systems” company rather than an integrator?

HK: As an integrator, the primary value we bring is the VPF payments. Most exhibitors are looking for that income stream as the VPF deals are complicated and in limited supply. This is very different from being a straight software supplier where our product needs to stand on it’s own. We need to provide the best solution for the money and respond to the customer’s needs. If we were not fully committed to this business, we would never get the attention of a company like Hoyts.

CJ: What do you think pushed AAM over the top with Hoyts?

HK: It comes down to two things. First there is the product itself. Our TMS was reviewed and field tested by the Hoyts team and determined to be the most flexible and best fit for purpose. Almost equally important is the team that sits behind it. Our relationship with Hoyts has been a very interactive one and the communications between the two teams has been very strong. Considering that this is a 10 year deal, you need to have a company you can trust and a group of people you want to work with. This is a marathon not a sprint so you need to be able to go the distance together.

CJ: How will Hoyts and AAM collaborate on future versions of the software?

HK: We see this as a true partnership. Hoyts is really looking to take advantage of digital cinema and make the most of the technology. Delfin Fernandez (Hoyt’s CEO) and his team do not simply see this as replacing celluloid machines with digital projectors. They are looking to significantly improve the way they do business and are leading the industry in this regard. We have already seen building our TMS as a collaborative effort. The Hoyts team has many ideas of how they want to work in the future and what they want from a TMS. We have been thrilled to tap into their experience and will continue to do so in the future. That’s part of the deal.

CJ: From AAM’s perspective, what is the significance of the deal with Hoyts?

HK: This is the first deal done with an exhibitor who isn’t being strong armed into taking an integrator’s software to get the VPF deal. In this case, Hoyts went out into the marketplace and looked at all the options available. After trialling various solutions, they decided on AAM’s TMS. Being chosen ahead of all the competition is obviously very satisfying. What makes this deal even more impressive is the quality of the customer. Adam Wrightson (Hoyts CTO) is one of, if not the most forward thinking and competent CTO’s in the cinema business. He and his team really got under the hood of our software and dug in deep to see if it was up to the task. Obviously they believed in the product and the team.