From drive-in experiences to contactless services, a lot of initiatives are being taken towards rethinking the cinema experience in a post-COVID environment. Amidst a challenging environment, a lot of reinvention is happening starting from ramping up health and safety measures to enhancing the movie-watching experience itself.
The global cinema industry has suffered in varying degrees due to the temporary closure of movie theatres and delay in the new releases due to COVID-19 related lockdowns. Resultantly, the global box office is estimated to have declined by billions of dollars. For the record, the annual global box office revenue in 2019 stood at $42.5 billion, according to Comscore. While, in April 2020 Comscore had reported that the US box office, alone, was down by over $1.5 billion, compared to the same period last year.
In the Middle East, research indicates that people have missed going to the cinemas. The cinema industry in the region is expected to bounce back quickly. “People are keen to return to the movie theatres, and the industry is seeing a week-on-week improvement in footfall. But it might take until December 2021 for the cinema industry to completely balance the impact of COVID-19, although a major change will happen when the content line-up is back and the vaccine becomes available,” states Ashish Shukla, CEO, Cinépolis Gulf.
Global cinema chain, Cinépolis forayed into the GCC region in 2018 and has been on an expansion mode. It has one location with 13 screens in Bahrain, three locations with 33 screens in Oman, one soon-to-launch location in the UAE with 10 screens and 100 screens scheduled for opening in the Kingdom of Saudi Arabia (KSA). Currently, Cinépolis is constructing three locations with 23 screens in Saudi Arabia, all set for 2020 opening.
“Our expansion plans got slightly delayed due to the COVID-19 outbreak, but our confidence to invest and grow the business remains firm. The major expansion for Cinépolis will be in Saudi Arabia, aligned to our initial plans,” Shukla shares.
Owing to the COVID-19 pandemic, cinemas are still temporarily closed in countries like Bahrain and Oman, where Cinépolis Gulf theatres are operational. But Shukla is optimistic. “Being operational in 19 countries globally, Cinépolis theatres are at various stages of reopening,” he states. “In the GCC, the cinema industry is recording a week-on-week growth. Compared to the pre-closure period, when cinemas reopened in KSA, there was a 4% rise in traffic that touched 25% within four weeks. Similarly, the UAE was at 3% during the first week of reopening, which moved up to 15-16% within five-six weeks. The numbers are improving steadily, driven by positive consumer sentiments – a lot of which depends on the consumer’s emotional connection, their comfort level to visit the cinemas and the content line-up.”
Content creation may have suffered a blow due to COVID-19, but there are still some great releases lined up for 2020 – from Wonder Woman 2, Black Widow to Maverick. It is a matter of time before Mulan releases.
“Like several other industries, our cinema industry has also faced similar challenges, having been confronted by an unforeseen crisis like COVID-19. As new content is getting delayed and reopening is happening in phases, we are still facing challenges. But there have been massive learnings too, as we are working together collaboratively as an industry with the value chain partners. We are communicating effectively with our partners, people and consumers to retain the long-term value of cinemas. It has been a tough, uphill journey but we see light at the end of the tunnel,” Shukla observes.
Pre-COVID, cinemas happened to be a major anchor for shopping malls, usually positioned in premium locations. Of course, premium positioning comes at a premium price. Considering the current situation, are rent contracts being renegotiated?
“We are fortunate to have great business associates and developer partners in the region. We have been able to revise the rent conditions to make it favourable for both parties, considering the current situation. In fact, for the cinema industry globally, a big step in the right direction is the revenue share arrangement,” Shukla responds. “After all, it is crucial to be empathetic towards our ecosystem – our people, our vendor partners and developer partners. Importantly, we have received a lot of support from the government entities. This will ensure the longevity and sustainability of the cinema industry in the long run.”
On their part, the cinema operators are undertaking every possible measure to build confidence among movie-goers. Cinépolis Gulf is working towards creating an end-to-end contactless ecosystem – from ticketing to food ordering.
“We will introduce a QR-based ordering of food through mobile phones, in order to make the process as much contactless as possible. Further, we will also have our health and safety ambassadors on the cinema floor to monitor the socially acceptable distancing measures. We have reduced the number of screenings to maintain a high safety and sanitisation standards, to be able to clean all surfaces thoroughly between the shows. Aligned with the government guidelines, we will maintain a 25-30% seating capacity, keeping 1.5 metres distance between one group of people and others. Moreover, we will not make the rides operational at our ‘Junior’ auditoriums for kids at the moment,” Shukla elaborates.
As theatre visitation is already impacted, reduced seating capacity is sure to hurt revenues further. The impact will be substantial, Shukla agrees. “How well we are able to emotionally connect with our consumers at this challenging time will be a differentiating factor. As such, at Cinépolis, we consciously evolve the movie-watching experience every year. This year too, we have worked on new designs that will be deployed across the region, where we have a presence.”
The new reality does require rethinking the cinema experience, especially as people are watching far more content on online platforms currently. Case in point: Netflix has signed up almost 15.8 million subscribers globally during the first quarter of 2020.
“Irrespective of the current crisis, people have always consumed content both online and in the cinemas. The experiences are different from one another. Generally speaking, viewers are keener to watch a blockbuster release in the cinemas, not online. While, online content is for everyday consumption, cinemas will always hold its charm. Both channels will co-exist,” Shukla concludes.
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