Matthew Theunissen is a business reporter

Ticket to Ride: Vista Whisked Away on Movie Boom

Even if you're a devoted moviegoer, chances are you haven't heard of Vista Group.

But if you've been to the pictures in any one of 79 countries in the past year, there's a good chance the Kiwi company clipped the ticket.

Murray Holdaway and his company have carved out a dominant and highly-profitable niche in the cinema business.

Riding on the back of a global movie boom, led by emerging economies in Asia, Holdaway's Vista Group now operates in 79 countries, installing movie ticketing software in cinemas.

Next on its list is Iraq.

Vista has also acquired or developed several other ventures, harnessing prized "big data" on moviegoers' habits and selling it to film studios and distributors.

Vista recorded a net profit of $48.6 million in the 2016 calendar year, with its underlying earnings increasing 17 per cent.

The company's shares closed yesterday at $5.49 - up 134 per cent since Vista went public in 2014.

Vista started as just one of the projects undertaken by co-founder and chief executive Holdaway and his former software company Madison Systems.

Village Cinemas wanted a new system to allow staff to sell movie tickets from the same kiosk as food and drinks, which would be a big cost saving.

"On a really quiet Tuesday morning, for example, you can close the box office and just sell the tickets from the candy bar so you don't have to have multiple staff on each location," Holdaway tells the Herald.

"Over the next few years, people from around the world started calling up about it and so it was at that point we said to Village, 'This has actually got commercial application'."

They formed a joint venture company with Village, sold Madison Systems, and adapted their software for a global market.

Vista subsequently bought the Village shareholding and between 2000 and 2010 Holdaway travelled the world selling its product, Vista Cinema.

They have set up offices in the UK, China and the United States, and gathered business partners from countries including Mexico, South Africa and India.

"India's one of the world's biggest software producing nations and it's one of the world's biggest film markets, and we took our software there from New Zealand and actually dominated that market," Holdaway says.

At one stage, Vista software operated in some 80 per cent of India's cinemas, before falling back to about 65 per cent today.

Holdaway says there is a perception in New Zealand that the cinema business is waning, or static, but that is far from the truth.

"When you look into the developing markets, places like Vietnam, China, Mexico, Brazil, Russia, cinema construction ... there's a massive opportunity.

"Say 15 years ago, probably 55 per cent of the world's box office was American and now it's probably down to about 40. So the rest of the world is just growing enormously in box office."

China is one of the few markets where Vista is not the dominant player, with 10-12 per cent of the market compared with 38 per cent globally.

"The problem for us in China is the massive growth in that market, so in 2014 and 2015 there were over 1000 cinemas opened each year ... and we had one sales rep so we just couldn't see how we could scale quickly enough to actually address that," Holdaway says.

Vista has teamed up with Chinese company WePiao, a division of WeChat, to try to gain traction in the competitive market.

Holdaway says Vista is now two, possibly three, times bigger than its nearest rival, with some 530 staff and with clients across the world. The latest cinema to adopt Vista's software is in Iraq, he says.

"It's not like we don't have competitors - we have competitors in every territory we operate in - but I think, particularly in the early days, we were doing something a bit different. More recently now we're selling more on just having the most functionality and just being the largest organisation doing this."

The company went public in 2014, then moved from being exclusively a cinema software company to a film industry company, Holdaway says.

Vista bought a controlling 50 per cent share in Dutch film industry accounting company Maccs, which provides software for major movie distributors such as Paramount, Warner Bros and StudioCanal.

The software enables the distributors to keep track of all their contracts, bookings, and the revenue generated by each film.

"When you pay your $15 at the movies there's a really complex contract that determines how much of that actually goes back to the distributor," Holdaway says. "It's a whole part of the movie industry that ... people just don't get [because] they don't see it."

Vista also runs big data company Movio, which holds records for about 90 million cinemagoers around the world, gleaned from Vista's loyalty systems.

"Maybe a film's coming to an end, it's in its sixth week and we can say, 'Look, this is a romantic comedy, show me all the women who normally come to our cinema who would normally go to a romantic comedy but haven't seen the film and haven't been to the movies for the last four weeks - and who spend a lot of money on wine. Let's invite them all on Saturday night for a discount price and see if we can pack the theatre out even though it's in its sixth week'," Holdaway says.

Movio also provides anonymised data to studios, advertisers and media companies to help them assess how to be most effective with their advertising and marketing campaigns.

"In excess of $10 billion a year is spent on movie marketing and so this also provides the studios, who are the ones with the big money in movies, another ... way that they can advertise."

Vista also has a 50 per cent share in film website company Powster, and 100 per cent of New Zealand movie website flicks.co.nz.

So with all its success, is Vista going to branch out into other industries where tickets are sold?

"We've thought about that but, you know, I think part of our success is our focus," Holdaway says. "We see so much opportunity in film and while we could go, perhaps, into stadiums or museums or zoos, there are other people doing that. What we do is film and there's still a lot of stuff we can do - and we're really busy."

Mark Lister, head of private wealth research at Craigs Investment Partners, says Vista's global focus is a real positive for the company.

"In New Zealand we only have a limited number of global growth stories - Fisher & Paykel Healthcare, Xero and Comvita come to mind - but a lot of our companies are domestic-type companies," Lister says.

"But Vista fits well into that camp of companies that are out there taking their products to the world and it has global growth aspirations that they're delivering on to date. So that makes it a really interesting one for investors because the world's a big place, certainly a lot bigger than New Zealand."

Most of the company's results had been well received and it was viewed favourably by investors.

"From what I have had to do with them, they've been quite a good performer over the years - really interesting company, really interesting product. They've found themselves quite a lucrative market niche doing something that they seem to be able to do better than their competitors."

The company is now part of the S&P/NZX 50 Index, which Lister says had boosted its profile, putting it on the radar of a larger group of institutional investors, retail investors and brokers.

"It's a good story, it's an interesting company, it's got a good product. It looks like it's doing all the right things and it's had some good wins in terms of its revenue growth and it's been a pretty good performer for investors."


Murray Holdaway
Job Title: Vista Group co-founder and chief executive
Family: Married with two children
Last Film: Manchester by the Sea
Last Book: England by Julian Barnes

- NZ Herald

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