Disrupting the film industry

We talk to CEO, Philip Knatchbull about how he’s shaking up the film industry with an 85-year-old brand and a business model that challenges the norm and breaks convention.

The 2nd floor of a converted warehouse is adorned with posters of Curzon’s latest releases. We visit the Curzon headquarters in Holborn, London on a sunny spring afternoon and Knatchbull begins by telling us how he arrived to where he is today.

Running the family business that invested in telecommunications and media technology proved an invaluable experience. As did being in a family that was closely involved in the film industry, Knatchbull is son of film producer, John Brabourne. Following an education in financial services, combined with his experience in technology, Knatchbull shares, “I wanted to put those two things together with my love and knowledge of film to re-enter this space from an entrepreneurial perspective and carve a niche.” He joined Curzon in 2006 and got to work on realising this dream.

Curzon Bloomsbury

We quickly realise that a crash course in the intricate workings of the film industry is needed in order to understand and appreciate just how Knatchbull’s perspective is transforming the industry.

Recognising that the industry had traditionally been about B2B targeting rather than B2C, Knatchbull reveals that he has no intention of working within those constraints. “I wanted to communicate with the customers and by doing that I also had to disrupt the market in terms of the current economic models.”

Knatchbull identifies the three silos that the film industry is composed of - production, distribution and exhibition. With the ambition to grow a business that could do all three, he explains that he could only achieve this by addressing two needs, “finding a brand that existed, that had respect and legacy of quality and to form a vertically integrated corporate structure that assimilated those three silos effectively.”

In order to reach his goal, Knatchbull needed to buy a film distribution business that was small yet established as a market leader. They found 35 year old film company, Artificial Eye, founded by Andi Engel, an immigrant German in 1976, who had an interest for art-house movies. He had started to import movies from Europe into the UK by acquiring UK distribution rights at a time when no one else was doing this.

The two perfectly matched businesses, Curzon and Artificial Eye, surprisingly represent a mere 1% of the UK market but Knatcbull’s aim is to take it to 5% of the UK market.

The additional layer to the mix is a digital distribution channel, for which Knatchbull draws upon Steve Jobs’ ingenuity to illustrate. Pixar proved to be an education about the content business for Jobs and on returning to Apple, he focused on their premium offer but also on communicating directly with their customers. And the consequence of this was the opening of the first Apple store in Virginia, 2001 with many to follow. Knatchbull suggests that the Curzon Cinemas are the brands’ equivalent of the Apple stores. They are a way of communicating to a large group about what the brand is about and what products are on offer.

Curzon Victoria

A great product offer and a clever business model sit alongside the simple, and elegant design style that Apple is renowned for and Curzon is also making a name for itself from the interior design of its cinemas. Knatchbull shares with us that he made the conscious decision not to be a homogenised brand. “We didn’t want to be seen as high street brand where you can’t tell the difference between any venue you go to.” Instead, the approach is far more localised and geographically led. Knatchbull worked with acclaimed designer, Afroditi Krassa for the Curzon Victoria, which has a modern Bauhaus theme and sits in total contrast to Curzon Canterbury, for which Krassa has taken inspiration from a country house – complete with a log fire and library. For the reconstruction of the Curzon Bloomsbury site, they collaborated with Japanese designer, Takero Shimazaki, who has merged inspiration from old Artificial Eye films with a spa he’d visited in Switzerland. The result, Knatchbull believes brings a “much calmer, quiet, contemplative experience, which we very much felt our core art-house cinemas in Central London should be.”

Curzon Bloomsbury

The attention to detail and importance placed on the quality of experience is also applied when curating the films exhibited by the brand. Knatchbull explains that although it is strongly subjective, they work within tight constraints to sustain the brands’ reputation. He says that, “just because it costs $3 million, it doesn’t mean it’s going to be less value artistically than something that costs $10,000. For us it’s about breaking down the old-fashioned rather snobbish barrier about what you’re allowed to watch, what you felt able to watch – you were either an art house fan or a Hollywood fan, you could never be both. That’s all gone, that’s all disappeared. What we’re saying is that, as a brand we are very consistent in what we programme to you.”

There are many contenders competing in the physical environment of film showing but this means there is plenty of scope to heat up the competition with what is on offer to the public. Knatchbull shares his frustrations with the 16-week exclusivity rule that the large Cinema brands operate within and suggests that the limitations direct people towards piracy. “My experience in the film business is if you give people what they want when they want, then generally people won’t pirate. If you provide them with the format in an easy and understandable way, you give them a choice.”

Curzon Victoria

Curzon are defying the norm by buying films, making them available online and in their cinemas at the same time. So what does this say about the brand? “We’re not just a cyber space opportunity, we’re not just a video-on-demand platform, we have the physical bricks and mortars, the shops, the seminars, the cafés and bars. We can offer that tribal experience of people gathering around and watching films. I think there will always be people, who will leave the home and come to cinemas.”

With regards to the approach they take, Knatchbull says that, “We like to take different directors films and present them to people, they make up their mind whether it’s good or bad or terrible etc.” An example of this is the Oscar winning, Ed Snowden film, Citizen 4, financed by one of Curzon’s investors. Knatchbull felt a sense of responsibility to take the film on and disseminate it, he adds, “We are just a conduit to put this out into the arena, we’re not the filmmakers and we are not responsible for the content, we just believe its important enough content that it wants to communicate it self and start discussions going and that’s fantastic, that’s what we’re here to do.”

Curzon Bloomsbury

Acknowledging that their judgement is entirely subjective, Knatchbull concedes that their decisions are reliant on film critics’ reviews and the mood at film festivals. They then take this information and make a decision based on their five segments. He explains, “There’s a business responsibility, which is what gets people through the door and then there’s the curation responsibility, to make sure we’re trying to maintain a quality threshold.” There seems to be an ongoing conflict for the brand as only 20% of the films shown at Curzon Cinemas are their own, as they take on films from other distributors, they take these decisions as a cinema operator and a video platform. Showing the ‘must-see’ films is part of the responsibility to cover the capital and costs of the brand’s shop window – the beautifully designed luxurious cinemas - without losing the brand’s essence.

Tension, conflict and sacrifice seem to come hand in hand with a business that is going against the grain, Knatchbull explains, “It’s a very common theme running through, you have on going operations, trying to maintain your income and then you’re developing your new business models and the pressure between the two can sometimes be intolerable. Entrepreneurs can talk endlessly about the 10%, the fun bit but it’s actually about making sure that you’re running a business that is focusing on its on-going operations.”

Exhibiting through platforms such as BT TV, FreeSat and smart TVs that have the Curzon App has only added pressure to maintain the level of editorial quality that the brand has become know for and Knatchbull recognises that they need more content to sustain this, so we discuss funding and investments.

Knatchbull reveals that so far, there have been no investments from institutions. The current funding movements offer investors a chance to acquire content that Curzon then distributes through various channels. Then, as they acquire more interest they can communicate with them and sell through to them, eventually targeting institutions and asking them if they want to be involved in the films. In the future, they hope to finance more feature films like they did in 2013, for Le Weekend, directed by Roger Michell.

Curzon Victoria

The editorial responsibility also follows through to Curzon’s advertising. And of course, Knatchbull is exploring innovative models to do this differently. He is looking to collaborate with like minded brands from various sectors that align with the Curzon brand and give them the option to advertise on their screens, posters etc. Ultimately he plans to use the power of the Curzon brand to attract other brands.

From our conversation it is clear that Knatchbull revels in redefining convention but what might appear as a ‘start-up’ mentality is tuned with sharp focus and a clear sense of purpose, “The difference between experimenting and having a clear vision and a strategy is that if you know where you want to end up and you have clear idea of what that is, it makes it easier, rather than scrabbling experimenting around here and there. I think different brands and different companies are trying not dissimilar things in lots of different ways.”

Our crash course in the workings of the film industry reveals that the making of a beautiful business has certain parallels with the ingredients that make a great film. The first, talent, from actors and directors to sales assistants and designers – talent is key. Secondly, a clear sense of purpose and effective direction. Thirdly, appeal – themes and values with a human appeal that connect with the audience. And lastly, a point of view, an opinion – a beautiful business is relevant; it has something to say and has a positive influence in the world.

We’ve identified five hallmarks of beautiful business and explored stories from an array of companies from all over the world. Today, we continue to talk to businesses with an alternative approach, which you can read more about here.