How cinema will bounce-back with a borderless future for film
Whether it’s declining Oscar ratings or grim predictions for box office takings, the impression is of a movie business in crisis. But the debate over Big vs Small(er) screen distribution fixates on the channel, missing the bigger opportunity for the hyper growth of the film medium and all its stakeholders, says Mindshare's head of worldwide, Ollie Joyce
In 2015, whilst working with one of the big studios, we predicted the inevitability of day and date film releases, where blockbusters would appear on all screens at the same time.
This view was formed through working with the brilliant Jeff Cole, director at Center for the Digital Future, who rightly pointed out that the economics of cinema were crazy - a $250 night out (babysitter, transport, meal & drinks, snacks & a ticket) of which the studio took a tiny fraction.
In a world of finite budgets, film simply had to command a greater share of wallet.
So how did the projected end of the cinema era turn out?
Like all things today, not as expected.
Despite the odd chink in the wall, studios observed the growth of Netflix, which dabbled in cinema itself, in the hope of the odd Oscar, but essentially the two worlds stayed separate. It remained about pipes not content.
Then Covid happened and with it, the biggest possible jolt to consumer behaviour, which is still at least a year away from emerging into any form of ‘new normal’.
We’ve seen a variety of responses betting on different outcomes: Big releases like Bond pushed back until the box office returns, Warner brothers streaming all 2021 releases simultaneously on HBO Max, through to Sony signing a first look deal with Netflix, comprised of a drastically shortened gap from cinema release.
But instead of backing specific horses, isn’t the answer growth on all fronts?
For cinema v streaming, read arcades or multi-channel retail
Back in the 80s, amusement arcades dominated the gaming industry. Far from decrying the death of the location, they realised very quickly that growth would be driven by more locations and screen types, more games, more formats.
Gaming now dwarfs the movie industry with Grand Theft Auto 5 delivering 1 billion sales in three days.
To take another parallel, footwear brands were pressured by physical retail into a dedication to bricks and mortar, but some realised that multi-channel retail was a strategy that would benefit ALL the channels as that’s what consumers wanted.
The Nike share price is up 600% in the last decade as a result.
Here’s the thing – the number of people who see films at the cinema is small. Dividing box office takings by ticket pricing would indicate that blockbusters reach around 10% of the population on the big screen, whilst the average film will be closer to 2%.
The huge cultural space they occupy is simply not reflected in the reach & monetisation via cinema.
Of course, these audiences are to some extent picked-up later in other viewing channels.
The greatest force in marketing however is momentum, so why would you let that decline so drastically after the cinema release and go to the expense of re-heating it later?
What we’ve seen is a deliberate and drastic limiting of distribution in the understandable belief that in the past, box office was everything.
What we are now seeing is that distribution points compliment and amplify each other rather than killing each other off.
The Travis Scott Fortnight partnership being a case in point - over 22 million live viewers delivering a massive commercial benefit across all channels.
The world needs film, and film needs global numbers
As the world becomes increasingly polarised, is there a more unifying medium than film?
Sport has shown that shared cultural experiences matter, whether being in the same location or live TV viewing. Whilst film ,more than anything has the power to create broader understanding and empathy.
Yet the historic movie making model has been a disaster for diversity.
The oft quoted stat is that 50% of movies in the cinema model lose money, meaning time and time again we see investment only in the tried and tested. The mixed model is liberating the industry from those constraints.
More viewing channels allowing access to broader audiences is having an amazingly positive impact on the breadth and depth of output.
The likes of Minari, The Dig, The Trial of the Chicago 7, His House, The Banker, Judas & the Black Messiah have always existed in the past, but the volume and scale of these productions are the product of an industry shaking off the constraints of the box office model.
So where does this go: Films own flywheel
Instead of fighting back the tide, which has completely swept over it this last year, the new bolder and broader movie industry needs to embrace the market forces working its favour.
Here’s six provocations on how that will happen:
- Streaming and box office will prove to be complimentary with two-week windows or simultaneous release of all films.
- The huge broadening of audiences this creates funds an increase in film production. The increased flow of quality content into cinema’s balances the reduced shelf-life.
- We witness the reverse of straight to video: ‘Niche’ films seeded in streaming are fast tracked onto the big stream. Remember the most profitable film of all time isn’t Avatar but My Big Fat Greek Wedding (6,150%).
- Cinemas however can’t relax. They’ll be forced into a long overdue innovation drive - better environments, smarter ‘seasons’ reviving the classics, partnerships with WeWork to make more flexible us of their space, broader viewing times with dynamic pricing models targeting different demographics. Amazon will acquire a chain creating a hybrid viewing and package collection centre for Prime subscribers.
- The return to commercial TV of the blockbuster, three months after release not three years. Oscar airtime continues to sell-out despite the decline of ratings showing that in a market where 99 of 100 top rating TV shows in the US were sport, there is huge demand for high-quality content alternatives.
- Film makers armed with ‘DTC’ data will make an even broader range of movies, with a step-change in the effectiveness of promotional investment.
We desperately need film to survive and thrive, and the initial figures from Warners Godzilla V Kong cinema, plus day and date release show exactly what’s possible.
By moving the debate away from distribution channels and focusing on how the whole industry can grow together, a more brilliant borderless future looks much more likely.