Earlier this week, Nu Metro Cinemas, the second largest cinema operator in Southern Africa, was sold by Times Media Group to private equity firm One Fifty Capital in a deal worth 750 million rand.
“The process started about six to nine months ago. [DATA TMG:Times Media] just made the decision as they had with some of their other retail businesses, including Exclusive Books, that they were some non-core assets and there were some core assets,” Nu Metro general manager Luke Roberts told CNBC Africa.
“Nu Metro cinemas obviously fell into the non-core asset pool, and then the process went from there.”
After looking for potential buyers, Nu Metro came to an agreement with One Fifty Capital. One Fifty Capital will take ownership of Nu Metro and its associated advertising business.
“It’s an exciting time for me to be running the business. I think under Times Media, it was very difficult to get access to capital. Cinemas are a capital intensive business. To actually have an investor on board who believes in it, realises the potential in it, sees the future in it and is willing to make those investments, [is] exciting for us,” said Roberts.
“Cinema in this country does need a bit of a facelift. I think we have fallen behind the times in comparison to the rest of the world.”
Roberts hopes that the transaction will allow for the implementation of a new and improved type of the out-of-home cinema experience that various other parts of the world are currently experiencing.
“If you look at territories where they’ve had downloading and access to dvds for the last decade, those territories have actually seen growth in their cinema markets. One thing I always put that down to is the more people watch films at home, the more they’re inclined to watch films outside of the home,” Roberts explained.
As part of the cinema experience facelift, Nu Metro recently launched a set of luxury cinemas, which have already been operational in Cape Town and KwaZulu-Natal. So far the cinemas have had positive responses from customers.
Cinema goers can now treat themselves to either a glass of wine or a cheese tray, among others, during their film viewing at these cinemas.
“For us it’s all about providing a better experience for people to come out of our homes and into our sights, and for us to give them that value for money. To date, in South Africa, we probably haven’t been giving people their value for money. Now we want to provide them with more things that give them that better experience,” added Roberts.