Cinema does not collapse without a fight
Ster-Kinekor and Nu Metro may face an uphill battle, but cinema operators say they still have a lot to offer South Africans.
The growing number of streaming services becoming available in South Africa could signal the start of a transition period for the way we consume entertainment.
Like much of the rest of the world, South Africans are going to cinemas less, suggesting a slow conversion of the cinema as a favorite destination from family movie nights to online video streaming services.
The annual meeting of the Motion Picture Association THEMATIC report tracks the indoor and home entertainment industry in the United States and around the world.
It’s no surprise that the Covid-19 pandemic decimated global theater receipts in 2020 due to global shutdowns.
Local theater chain Ster-Kinekor was no exception, as the the company entered the voluntary rescue of the company in January 2021 to stay afloat.
Aside from the lockdown, one of the main reasons for the decline of cinemas locally and globally was a substantial decrease in global film production and distribution.
However, box office revenues increased once film production resumed and consumers were allowed to return to cinemas.
The THEME 2021 report shows that the global box office market was worth $21.3 billion last year, an increase of 81% from $11.8 billion in 2020.
The Europe, Middle East and Africa (EMEA) box office market in 2021 saw a 53% increase over 2020 figures, from $3.3 billion to $5 billion of dollars.
If you consider these trends and the recent lifting of the state of disaster in South Africalocal cinemas will likely start to rebound from 2022.
However, this slight increase still pales in comparison to the growth in home entertainment over the past few years.
The THEME report indicates that the international digital home entertainment industry saw a 24% increase in value compared to its 2020 figures.
The EMEA home entertainment market saw the largest growth, growing from $16.2 billion in 2020 to $19.6 billion in 2021, an increase of 116%.
With affordable streaming services like Disney+ is coming soon to South Africait’s not hard to see why movie theaters struggle to attract customers.
In North America, the number of tickets sold in 2020 was 240 million, significantly lower than the 1.24 billion the previous year.
Although ticket sales in North America in 2021 increased by 100% to 470 million in 2021, they are still well below pre-pandemic levels.
This trend indicates that cinemas are slow to return to their former glory – and may never be.
Still, that doesn’t mean cinema is dying, nor are theaters collapsing without a fight.
Ster-Kinekor believes that cinema is “at the heart of popular culture” and that although his “obituary has been written many times”, it is here to stay.
Likewise, Andries Basson, chief operating officer of Nu Metro Cinemas, told MyBroadband that while streaming is an alternative to cinema, it cannot replace it.
“Cinemas provide a multi-dimensional entertainment experience that cannot be replicated through other platforms.”
Basson also said that the recent huge box office success of Spider-Man: No Coming Home shows that people will still go to the cinema in droves to watch limited theatrical releases.
Local theaters are also using creative strategies to attract new customers.
For example, Ster-Kinekor has launched a children’s cinema in Gauteng that offers slides and beanbags.
Basson also said that the value of cinemas is not just limited to cinema.
Nu-Metro’s value also lies in hosting events including conferences, birthday parties, corporate events and special screenings, he said.
“Movie theaters showcase versatile real estate for entertainment experiences across the value chain,” Basson said.