Mark Ashcroft, chief executive of leading cinema screen technology company Harkness, focuses on the future of big screen entertainment.
As our global society navigates its way out of a third wave of Covid lockdowns, cinemas around the world are re-opening, albeit some with restrictions, to what some may think is an uncertain future.
But there is always a silver lining to every cloud, and in some ways, Covid could have done the big screen a favour.
While box office sales were improving year on year before the pandemic struck, lockdowns have understandably seen an increase in the popularity of streaming devices. Film buffs had no choice then. But in between lockdowns, cinema goers have returned in pleasing numbers, and there’s no reason this trend won’t continue, given the right focus on what movies are being shown on the big screen.
Film studio revenues are more driven now by box office sales than they were 20 years ago, with movie tickets equating to almost 50% of their revenue, and for those that control their own distribution channels, deploying streaming services is very costly. Many have yet to show much profit.
Early experiments with premium video on demand (PVOD), where first-run movies are offered through streaming services directly to consumers to give them a VIP experience, have had mixed results during the pandemic.
At the same time, if the pandemic was over, 58% of consumers want to watch at least some movies on the big screen. Unless they are lucky enough to have a home cinema, they can’t get that VIP experience at home, and even if they did, there is no way their big screen can deliver the size and quality of imagery that can only be experienced in a cinema.
And which movies? Not all are theatrical successes. Relative to their marketing costs, action movies, science fiction and animated features, which benefit most from large scale cinematography, and to a smaller extent, horror films, show the stronger returns from big screen audiences, while comedies, dramas and thrillers more often see negative returns on advertising costs, ie they cost more to market than they earn in cinemas.
This may encourage studios to focus on genre and budget to determine the length and feasibility of big screen runs, with some movies well-suited to big theatrical windows and others more to a shorter time at the box office, or none at all. They may even develop shorter and less cost-intensive content types and leverage social media to market them.
This doesn’t mean the big screen will lose out because small studios could gain access to more cinema slots if large studios reduce their theatrical releases.
It is therefore extremely likely that there will be a leading role for cinemas when the pandemic lifts. Many of the showrunners, screenwriters and actors creating the content are still drawn to the prestige of the big screen and when film buffs feel safe to assemble again, cinema should see a strong rebound.
It’s interesting to note that Netflix is set to report the smallest growth in subscribers in a decade, as the flow of young fans who have fuelled its meteoric rise slows down, leading it to target tech-wary over-55s. These people were equally as jaded as their younger counterparts of staying at home but they are the people who have grown up with the big screen experience.
And they won’t be forgetting that any time soon.
*With thanks to Deloitte’s Digital Media Trends survey for some of this information.