A panel of leading international studio and exhibition executives at CineEurope in Barcelona today was bullish on the future of the theatrical business, downplaying a rivalry with subscription streaming services, while also voicing a distaste for discount subscription models in cinemas.
Among the statistics shared by international cinema body UNIC at CineEurope, the annual convention of Hollywood majors and European exhibitors, was that in 2018 frequent moviegoers were also avid consumers of streamed content. Conversely, 48% who never streamed content across the year didn’t go to see a film in a theater.
Speaking to that, Vue International CEO and founder Tim Richards suggested, “This is not a surprise. People who bought and rented VHS went to see movies the most, same with DVDs. People who like movies, like movies in all formats. People who love and watch Netflix, love and watch movies in our cinemas. We see that as an opportunity in the future.”
Tony Chambers, Disney’s SVP Studio Distribution EMEA and Country Manager UK/Ireland, said, “We see SVOD as complementary rather than competing. The industry has always had challenges for competition,” but, “I don’t think we can be complacent. We have to make the journey for the consumer as seamless as possible… If we do this right, we will continue to get ahead of competition for people’s time.”
Duncan Clark, Universal Pictures International President of Distribution, pointed to the strength of the UK market in 2018 which saw a nearly 50-year ticket-sales high. “How ironic is that?,” he posited, particularly with “wall-to-wall” available content from digital to sporting events. Both Disney and Universal owner Comcast are prepping their own streaming launches.
Another area where the execs agreed was the subject of subscription models.
Alejandro Ramírez Magaña, CEO of Cinépolis, said the company launched a program over 10 years ago for its Mexico City circuit but ultimately did not roll it out. Subscription models “are not a silver bullet, they are not the golden pot at the end of the rainbow. It’s very easy to destroy value with a wrongly-priced subscription model,” he said.
Vue has a sub program in the Netherlands which works because of the size of the market. But tests elsewhere “haven’t really worked,” said Richards. A positive aspect of subscription models is “you get to know your customer.” But the bad news is “you give them a discount. It’s a blunt instrument, we like to be more agile.”
From the studio side, Clark added, “Simply put, we don’t like discount programs, or two-for-ones. We like the idea of increasing cinemagoing. Over the years, we have embarked upon and joined into many programs that increase the desire to go to the cinema.” As to ticket pricing, Clark offered, “From our position, we need to make certain we are protecting the value of what we are making.”
Chambers said he “absolutely” agreed with Clark. “It’s the value in the mind of the consumer. The last thing we want to do is devalue the cinemagoing experience.”
Key to the discussion this morning was also data and how exhibitors and distributors can work in concert to get the most out of customer information.
While Clark noted the importance of data protection, he suggested there is “a danger if we don’t, as a collective partnership, join up more conclusively and satisfactorily, that we will lose control to players who are in the business of collecting data like YouTube or Google.” Universal’s marketing teams “around the world are trying to aggregate the information. What we can’t do is go to the point of purchase. I’ve tried to encourage my exhibition friends we should share this data together. There comes a point where we can be so much more effective in the way our message is communicated… If we were combining elements or information in a way that was freely shared, I think we’d be more effective.”
Said Chambers, “Data without the content and insight is just data… The customer data resides with exhibition, but not only do we have the marketing spend, we can provide insight into what is being consumed and when it is being consumed. You have to keep the ball bouncing… It’s about driving frequency of the cinemagoing experience.”
Richards echoed the sentiments, saying studios and exhibitors “all win when we share data.” However, he noted one area of concern is what’s happening with Brexit. “There may be some potential data issues depending on where the UK ends up, issues on what we can keep and where we can keep it.”