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Why Moviegoers Are Less Likely to Cancel Cinema Visits Than Netflix

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5 February 2023

With many western economies teetering on the brink of recession due to inflation and high energy costs, the worry is that belt tightening is going to impact cinema attendance in 2023. People looking to save money can forgo a trip to the restaurant or the latest Marvel film, but not milk, bread or heating. With a full slate of films throughout the year, this would come at the worst possible time for exhibitors as they struggle to climb out of the deep hole that COVID dug for them.

As of yet there is no reliable data to point to conclusive trends, but we are getting the first surveys indicating consumer intent. One such survey was carried out in January by Bain & Co in Central Europe’s biggest cinema market. Ominously it was titled, “Poles will significantly reduce spending on going to the cinema and restaurants.”

The numbers did not make for happy reading. “More than a quarter of respondents intend to limit going to the cinema, and a fifth to concerts.” Uh-oh!

A closer reading of the data, however, revealed a more nuanced or even optimistic picture. A total of 42% of respondents “had already reduced spending on traditional and digital forms of entertainment last year.” So 25% is only a small sub set of the bigger entertainment spending reduction and the biggest cutback might already have taken place in 2022, when there were fewer films to attract people to the cinema. While breakout numbers are not provided, it is likely that streamers were the victim of consumer belt-tightening.

Significantly the same survey revealed that “almost 60% percent of those surveyed predicted that they will go to restaurants less often this year.” A further 40% will look for cheaper places to eat out and 39% will reduce their use of food delivery services. Granted, people go on average more often to the restaurant than to the cinema in a year, but it seems that cinemas will suffer less than restaurants and Deliveroo.

In a separate MIDiA survey “The Great Movie Reset” by Tim Mulligan (thank you Rob Arthur for highlighting) confirmed that “cinema attendance is now the most popular monthly IRL [in real life] entertainment activity, eclipsed only by going to eat at a restaurant.” So restaurant visits win out but cinema is not far behind. For cinemas that offer dine-in options (the topic of this past week’s CJCinema Summit) there is a further opportunity to lure away consumers from restaurant+cinema by offering both options in one place.

It is the belief of your’s truly that consumers will look at reducing fixed monthly outgoings rather than one-off treats. As such they might decide they don’t need four or five streaming services, but can make do with two or three, or trade down to an advertising-supported plan. For one-offs, they are likelier to forgo an expensive holiday, rather than a chance to see Tom Cruise at the multiplex. Mostly cinema schemes like the Unlimited could be the biggest theatrical victim, but for this we don’t have the data.

Cinemas need to lean into offering customers cheaper options, such as targeted discount, family specials or reduced-price ticket days. At the same time they must remember that it is the experience as much as the film that makes it an enjoyable and affordable mini-luxury. Hollywood is delivering a full year of films in every genre, so it is up to cinemas to remind people that whatever else bad is going on in the world, they can offer refuge and escapism for two hours at a relatively low price. As the MIDiA survey notes, “Movie-going taps into the post-COVID need for shared communal experiences and content consumption.”

Patrick von Sychowski

, Editor, Celluloid Junkie

Movies

80 For Brady

“80 For Brady” Tackles Dynamic Pricing Experiment

Anyone who has ever heard film industry veteran Chris Aronson speak at a conference knows he is a big proponent of lowering movie ticket prices. Paramount Picture’s President of Domestic Distribution has long felt that not all movies should be priced the same. Though studio’s are not legally permitted to set ticket prices, on their lates film, “80 For Brady,”Paramount is allowing certain North American exhibitors to extend matinee pricing for the entire day.

“80 For Brady” stars Sally Field, Jane Fonda, Rita Moreno and Lily Tomlin as four octogenarian friends who set out to attend the 2017 Super Bowl in order to meet their football hero, New England Patriots quarterback Tom Brady. Paramount provided data to exhibitors showing them how older consumers are always looking for a good deal, pointing to the box office earned by releases aimed at adults such as “Ticket to Paradise” and “A Man Called Otto” on Tuesdays, when many operators lower ticket prices.

Large chains in the territory, such as AMC, Regal, Cinemark, as well as mid-range circuits like Harkins, are participating in the scheme at a time when the industry is trying to figure out how to bring older moviegoers back to cinemas.

Source: Hollywood Reporter


Exhibitors

Cineworld Creditors Approach Vue About Sale

Creditors of Cineworld are reported to have contacted Vue about a possible sale of the international cinema major in whole or in parts. At least 30 entitites are said to have been approached by advisors in an effort to salvage the beleaguered cinema chain. Vue recently concluded its own re-financing, putting it on firmer financial footing.

The possible sale would include Cineworld, with its UK and European operation, as well as the Picturehouse chain in the United Kingdom. Cineworld currently faces a GBP £4 billion debt pile and owes money to many creditors. Cineworld had previously denied being in discussions with rival chain AMC/Odeon about a possible sale. Rival Vue International recently completed the refinancing of its operation, as well as obtaining a GBP £75 million (USD $90.26 million) credit line.

It is doubtful whether Vue would want to take on its larger rival Cinworld in this situation. Competition authorities would force the sell-off of several key assets, for which only AMC’s Odeon would be a natural buyer. Both Cineworld and Vue have refused to comment on these reports. Cineworld filed for bankruptcy protection for its Regal operation in the United States in September of 2022. Non-binding bids for Cineworld are to be submitted by 16 February.

Source: This Is Money


Exhibitors

AMC Switches Strategy In Saudi Arabia

AMC, the world’s largest theatrical exhibitor, is changing its business plans for the Kingdom of Saudi Arabia.

In 2017, AMC announced it had entered into a non-binding memorandum of understanding with the Public Investment Fund (PIF) of Saudi Arabia, with the intention of exploring the possibility of bringing theatrical exhibition to the Kingdom for the first time since the 1980s. AMC hosted the country’s first movie screening on 18 April 2018 in Riyadh. It partnered with the PIF’s Saudi Entertainment Ventures (SEVEN) to form SCC in order to develop and operate additional locations across the Kingdom.

AMC has reached an agreement to transition from a management and investment role in the Saudi Cinema Company (SCC) to a pure licensing relationship. This is how most outside the company already believed AMC was operating in Saudi Arabia, but this certainly makes it official.

The current AMC Cinemas and future locations operated by SCC will retain the AMC Cinemas name and other IP through a licensing agreement. As part of the agreement, SEVEN will buy-out AMC’s $30 million dollar investment in SCC, giving the American exhibitor a cash boost.

Source: Celluloid Junkie


Box Office

Germany Box Office and Attendance Down In 2022

Moviegoing in Germany took a hit in 2022, decreasing to 73.5 million admissions, a drop of 33.1% to 2019 when admissions reached 110 million. When compared against 2018 figure of 96.1 million admissions, moviegoing in Germany was still down last year by 23.5%.

Naturally these decreases were also reflected in Germany’s 2022 box office of EUR €694 million (USD $749 million), which is off by 28.1% from the EUR €964 million (USD $1.04 billion) earned in 2019.

The year’s top film in Germany was “Avatar: The Way of Water” which managed to scoop up EUR €72 million in just 17 days before 2022 came to an end. Hollywood titles dominated the top 10 biggest films in Germany during 2022, taking all but one of the spots, which was reserved for “School Of Magical Animals 2.” Local productions had their second-best performance of the last five years.

Source: Screen Daily


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Celluloid Junkie is the leading online resource dedicated to the global film and cinema business. The Marquee is our newsletter focused on motion picture exhibition; keeping industry professionals informed of important news, the latest trends and insightful analysis

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