Cinema needs to get more digital

"Build it and they will come" may have been a line in a movie, but it could also be the cinema exhibitor's motto, argues DAVID HANCOCK, Senior Analyst at IHS Screen Digest. It is not entirely true, but the cinema's exclusive window for seeing a new release film means that a cinema always has a chance of getting people in.

Distributors plan and finance marketing campaigns, often as part of a wider media release strategy, while exhibitors focus on the operational mechanics and environment of the cinema venue. Now that the cinema world is three quarters digitised in projection systems and takes its place in the wider digital media landscape this work split needs to change.

Opening up the cinema to new technology has brought the IT world firmly into the operations of a cinema. This has opened the door to a range of other technology applications such as high frame rates, 3D, immersive or 3D sound, 4D, digital delivery by fibre or satellite. The fact is that the language of cinema is now driven by technology.

In this wider landscape a key battleground is going to be the extent to which cinemas can use technology to communicate to their customers and drive them into the vastly improved sites.

The irony may be that this new era of cinema will not be defined by the technologies built for the venue itself, despite all the hard work and money spent on it, but on the technologies that enable cinemas to interact with their customer base. The challenge will be to use all available technologies to increase cinema admissions, not just marginally but substantially, making the cinema a more efficient business (average occupancy of a cinema is between 20-30 per cent of its open time).

The use of social media is still limited in the cinema world, few exhibitors venturing further than a Facebook page. The cinema has rarely had to communicate directly with its audience, and this may be new for some; but if cinema is going to remain the premium film watching experience, it may need to focus on getting into the daily lives of people more aggressively and effectively.

In the USA, the proportion of consumer level revenue for filmed entertainment accounted for by cinema grew from 30.5 per cent in 2004 to 40.8 per cent in 2012. In Denmark, the figure is 41.1 per cent in 2004 to 60 per cent in 2012. In a troubled film economy like Spain, the equivalent figure is 52.3 per cent to 75.1 per cent. Cinema revenues are gradually increasing, and digital consumption is also increasing, but the decline in physical media for home entertainment generally outweighs this growth and the overall pie has been shrinking.

Cinema is often described as the marketing platform, and even a loss leader, for films. Clearly, if three quarters of consumer revenues are coming from cinema alone, this puts cinema in a strong position for distributor attention. However, if it is the loss leader, then the film economy is in trouble and this highlights the threat: film risks entering a cycle of decline, in which cinemas are an increasingly bigger fish in a smaller pond.

IHS Screen Digest forecasts that over time, the digital revenues will make up for the physical decline, but even with that, cinema needs to see the digital world as an opportunity to stay in front. The best way to do this is to increase admissions by using the digital tools commonplace in other industries and applying them to this sector. As cinema globally is worth in excess of $34bn, a step change in revenues of, say, 20 per cent would equate to an extra $6.8bn into the overall film economy, surpassing the entire cost of the digital transition in one year. Not a bad result, if they can pull it off.

Contact: www.screendigest.com...

Article Comments

comments powered by Disqus