The 2022 Oscars has left us with a lot to discuss in its wake. Not only did we witness the infamous slap, but we also saw CODA win best picture. This marked an industry first, presenting Hollywood’s top award to a streaming service – but the move left many divided, with some industry players feeling the win was a slap in the face too.
A lot has gone down elsewhere in the streaming world. Netflix has had a pretty difficult couple of weeks, losing $54.4 billion in market cap overnight, and CNN is having an even worse time because it had to shut down its streaming service one month after launching.
All in all, it’s been a tough couple of years for the film industry.
Studios are only just starting to release major movies at a pre-pandemic pace again, and the industry is still trying to assess the habits of moviegoers – something that could fluctuate again with the cost-of-living crisis.
AMC’s CEO predicts that the box office won’t rise to pre-pandemic levels this year, and perhaps won’t fully rebound until 2025.
But how are cinemagoers feeling?
The current vibe
Since back in July 2021, when we last asked consumers how they were feeling about returning to the cinema, comfort has grown by 38%, with over half now feeling comfortable returning to the silver screen.
But does this mean they will?
It’s all a bit up in the air. While restaurant visits are returning back to normal, cinema attendance has continued to decrease.
So, even though more are feeling comfortable returning to movie theaters, there’s something about cinemas that isn’t tempting people back the way, for example, restaurants have – competition with streaming services being one possible factor.
For 3 in 10, the cinema is the place where they’re most likely to watch new releases that they’re excited to see. However, over a third are more likely to choose a streaming service, either one they pay for or a free version.
That said, some of these streamers may be planning to take advantage of the same-day releases for new films they’re excited to see.
The same-day release model allows some films to be released to streaming platforms at the same time as cinemas. It was introduced during Covid as a necessary part of the box office recovery process and is thought to be no longer needed.
It caused quite a stir last summer, and since then has been found to cause a spike in piracy. As a result, Black Widow was the most pirated movie for three consecutive weeks after its release according to TorrentFreak.
If studios opt to end same-day releases, this may encourage more to watch new releases on the big screen.
The magic of the silver screen
It also can’t be denied that the cinema creates an experience which would be hard to replicate in your living room. We can see this coming directly from consumers – it’s not just about the movie, it’s about the whole experience.
For movie watchers, it’s not just about the big screen and the sound quality, the overall atmosphere is also key. Even when asked about the positives of watching movies at home, the atmosphere was also important to a quarter. The vibe always matters – whether at home or at the pictures.
This could be a reason why the boutique cinema sector is continuing to grow, despite the challenges of the pandemic. After missing out for so long, people are looking for real experiences, and going to the cinema is no exception.
Smaller, boutique cinemas may also offer more appeal to cinephiles and those who would opt to watch movies at home, as they offer all the attractions of the cinema, big screen, food and drink options, good sound, but also offer a more home-like atmosphere.
Indie cinemas have benefited from adapting during the pandemic. Many started to play more commercial films while some got more creative – the Texas Theater in Dallas set up a giant screen in its parking lot back in 2020 and ran concessions to cars. These kinds of cinemas can also benefit from support from the local community too.
It’s going to be important for movie theaters to keep that flexibility and adaptability moving forward, as new issues like the cost-of-living crisis add potential pressure.
The streaming wars
Despite it long being seen as the biggest threat to the industry, Netflix’s share price took a nosedive after it announced a net loss of 200,000 subscribers globally, and as we mentioned earlier, Warner Bros. Discovery shut down CNN’s streaming service.
With streaming services multiplying during the pandemic, there’s now a lot of choice, but not enough time to watch them all. Viewers are now faced with the choice to cull the subscriptions which don’t provide the content they want.
Another issue for streaming is that among those who rent or buy newly released movies, over half feel that the prices are expensive.
This concern has been brewing for a while – the number who feel that subscription services, like Netflix, are getting too expensive has grown wave-on-wave in our data. Now, over a third feel they’re too expensive, compared to around a quarter in Q2 2020.
The cost-of-living crisis has likely escalated the issue, with over 1 in 5 planning to spend less on home entertainment due to inflation.
The crisis is likely to affect cinemas too, as 41% of consumers are looking to cut back on treats or luxuries and visiting the cinema may count as one.
Some theaters are making moves to stay afloat. Cinemark is testing dynamic ticket pricing, with prices increasing or decreasing depending on the time of day, the market, and other factors. We may see other movie theaters follow suit.
But, Cineworld CEO Mooky Greidinger isn’t concerned and instead predicts that inflation will benefit cinemas, with many potentially seeing it as an affordable treat compared to vacations and play tickets.
So in terms of a cinema vibe check, recovery is well on its way – but inflation could still change things.
That said, it’s all up for grabs – if cinemas and streamers do the right things, either could take advantage of the situation.
Here’s what we do know right now:
- Going to the cinema is an experience. With consumers feeling that they’ve missed out over the past couple of years, many may be looking for more experiences, and this may come in the form of watching a new release on the silver screen, rather than in their living room.
- Not all out-of-home activities are returning to the same pre-pandemic rate, with the cinema being one. Theaters should grab the opportunity to remind consumers that going to the movies is an experience – and one which is more affordable than other activities.
- We live in uncertain times and it’s still hard to predict people’s habits – the industry needs to keep that flexibility and adaptability that it leant on during the pandemic.