Customers are the end of cinema, not Netflix!

Cinema exhibition has changed – there is no denying it

Like many other sectors, the evolving face of cinema exhibition has arisen from a multitude of factors, one being increased competition for customer’s attention from streaming platforms such as Netflix. Are home content offerings the proverbial Temple Of Doom for cinema? Or an opportunity for an industry still recovering from a digital makeover to build upon an existing platform? Content distribution, like retail or hospitality, is a 200mph freight train without brakes that shows no evidence of slowing down.

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A future where multiplex cinema and home content offerings live in harmony relies on two factors— improving the customer’s theater going experience and, as a result, increasing customer satisfaction. Did you see a trend there? It’s always about the customer, and the customer has indeed changed. They determine what they want and how they want it — a brand’s offerings are now adapted and customized to satisfy them. Effort must be made in this customer-centric economy to razzle dazzle the moviegoer, to deliver a spectacle that will make them second guess turning Netflix on and instead say, “Hey, let’s go to the movies tonight.” 

The customer wants an experience

What was the movie experience like for our grandparents? Glitz, glamor, people getting dressed up for a night out. It was similar to what millennials would do (with a contemporary twist) when going to a gig or a Broadway show. It was an immersive experience with a crowd; special and memorable. I try and go to the cinema twice a week (what can I say, it’s my first love), but a 2016 moviegoing experience, although awesome, isn’t at all like the glamorous Saturday night out it once was. 

For some reason, it has become acceptable to say [to audiences] we are providing this empty room with a TV in it and just watch a film. That has to change and if it doesn’t change, forget film, forget digital, if that experience for the audience is not valued … people stop going.

This quote from film director Christopher Nolan in October 2015 paints a fairly harsh picture of how some people view the current state of cinemas. To combat competition from other offerings, many cinemas are making changes to ensure better, more immersive experiences for customers. The list of new developments is long — 3D, IMAX, 4DX, and 70mm among them. 70mm, used for Quentin Tarantino’s film The Hateful Eight and Nolan’s 2014 film Interstellar, is seeing a bit of a resurgence. Originally brought into the mainstream to combat television in the 1960’s, its presentation of large-scale epics like West Side Story and Lawrence of Arabia was effective in drawing larger crowds. Does something in that statement seem familiar? 

Ian Shepherd, Chief Commercial Officer of Odeon and UCI Cinemas recently said, “The cinema is a hospitality experience… You go to see a $100m film in a cinema that cost millions [to produce], and no one looks you in the eye and says hello when you walk in.” However, exhibitors like Studio Movie Grill and Alamo Drafthouse are taking the hospitality experience to the next level. By offering luxury seating and restaurant-grade food and beverage offerings, what was once dinner and a movie is now dinner WITH a movie. Many customers are embracing attending the latest box office films and enjoying fish and chips, gourmet burgers, and more movie-themed fare such as a Tuscan Raider quesadilla or C3PO-melette pizza. 

With cinemas adopting increasingly sophisticated software solutions, moviegoer data can be collected and analyzed in unprecedented ways. Using these products enables cinemas to gain new understanding of moviegoer preferences and tailor their marketing campaigns and cinemas accordingly. Ian Shepard goes on to encourage a data-driven approach. “Hospitality is rooted in insight — the more you know, the more you remember.”

The customer wants to be satisfied

Customer acquisition and retention are now uttered in the same breath as revenue, and Big Data has given companies more insight than ever into personal information and buying behavior. Millennials are the most responsive to informing organizations about what they want in a more intimate way. 

Being responsive to customer demand puts more pressure on studios and cinemas to nail global release dates and price competitively. Social networks as well as piracy mean studios suffer when releasing a film in separate markets months apart.  CEO Gabe Newell of Valve (the makers of online DCM platform STEAM) said in 2011, “Piracy is almost always a service problem.” How can people expect to be part of the online conversation about a movie when they can’t see it yet?"

As a result, closely scheduled global release dates are becoming the norm for big budget tent pole films. It’s still a struggle for independent films, but measures for multi-platform releases have started to show promise. 

There is an online network called Tugg that enables customers to choose an independent film and create a viewing event at their local cinema; the number of tickets sold determines if the screening goes ahead.  Imagine moviegoers programming independent films with bullet-like precision, selling out two sessions a day instead of multiple sessions with only a handful of viewers.  

Staggered pricing is also being introduced. Just as you don’t pay the same price for rump steak versus eye fillet at a restaurant, some exhibitors are starting to think customers might not want to pay the same price for different ‘cuts’ of movie. 

Should you pay the same ticket price for Ex-Machina or The Imitation Game as you should for Star Wars? What if studios and cinemas were to rethink the ever defining opening weekend gross and define a film’s success on attendance instead? Netflix seems prouder of its viewership numbers than their revenue, so why can’t studios take the same approach?  Maxing out attendance is highly desirable for box office take and both fixed and variable pricing models have the ability to deliver profits.

Many studios are now offering content on new or multiple channels to extend their brand. The Weinstein Company (TWC), synonymous with independent cinema, announced last year that they plan to refocus their efforts on television. Netflix realized that the best way to attract and retain subscribers was to give them content they can’t get anywhere else. Marvel have people heavily invested in their brand, so much so that they are now able to make unique properties such as Ant Man & Guardians of the Galaxy. When customers are satisfied with brands, they will stay loyal. Being successful in 2016 means trusting your product’s strengths and putting its staying power in people’s hands. 

There is no end in sight 

Most customers want a valued service or experience, quality over quantity — a pull strategy as opposed to a push strategy. If you give your moviegoer something unique for a competitive price then they will continue to visit. Do I want to go see Star Wars at the movies or do I want to stay at home and watch an entire season of Daredevil on Netflix? Actually, I want to do both of those things, so the question is which one do I want to do now? Can I wait to see a movie on iTunes or is there a sense of urgency to see it at the cinemas?  Many exhibitors are proactive in answering the call of this ever-changing industry, but they’re up against it. Isn’t that seriously exciting for the moviegoer?  (That’s me – avid – bring it on). 

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