SA’s leading cinema chains continue to battle for business

By Sameer Naik 1h ago

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SA’s leading cinema chains continue to battle for business despite reopening over two months ago.

While Ster-Kinekor have reported some growth since September, they say business is taking time to get back to sound trading levels.

A big part of it, they say, is due to the lack of blockbuster content from Hollywood.

“We are confident that audiences will return but that could take a few months still as content is currently also not flowing at normal rates,” said Ster-Kinkor’s head of marketing Lynne Wylie.

“The major challenge at this time is the global unavailability of content. English speaking territories such as the UK and North America are dependent on Hollywood, and with the USA not fully reopened (especially New York and L.A.) and parts of Europe (including the UK) going into second lockdown periods, major studios are understandably reluctant to release blockbusters.”

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“This has resulted in a postponement of many key films for the industry.”

Recently, Disney announced they would be pushing back a number of its upcoming releases, including delaying Marvel’s Black Widow to May 2021, a full year from when it was originally scheduled.

MGM has also delayed their release of No Time to Die, which is now set to arrive in April, although the studio has reportedly held talks about selling the film to Apple Inc. or Netflix for their streaming services.

Several big movie studios have also turned to Video on Demand Platforms to release their blockbusters.

“A few have gone directly to VOD (Video On Demand) platforms but the large majority have been postponed with plans to release in 2021,” said Wylie.

Aside from the lack of content, Wylie said constraints such as a capacity of only 50% of guests allowed per cinema auditorium has affected business.

“We have had several ‘sold out’ performances in some of our cinemas where additional capacity would have been good for our business.

“Having said this, in our business content is king so improved business performance is a combination of the films we have, the capacity we are allowed to host and the confidence of our guests.

“At this stage, confidence is slowly building but the next three months are a challenge due to lack of blockbuster content.”

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While their business has taken a knock in the past two months, Wylie is confident things will soon pick up.

“We have seen constant growth since reopening in September 2020 and the industry as a whole is currently trading at between 10% and 15% of the same period last year.

“Our weekly audiences are growing each week, depending on the location and South Africa has seen a CAGR of just over 5% since reopening.

“To put this in context, countries like the UK and Australia with much bigger industries that have been opened longer than SA have recorded compounded growths of 11%, while China and South Korea have shown 7% and 3%, respectively.”

Wylie added that cinema goers were also starting to feel a bit more safer at cinema houses.

“The week-on-week growth also shows that people are becoming more comfortable, as we saw in the restaurant trade when they reopened.

“The recent downgrade to level 1 of the Covid-19 lockdown protocols is a positive indicator to all South Africans that things are improving and the economy will begin to recover.”

Even though things are challenging right now, Wylie has no doubt that the cinema industry will survive the knock of the pandemic.

”Our industry has survived two World Wars, several major disease outbreaks, the advent of television, video stores and the internet, and continues to show strong Box Office growth every year.

“It is clear that there is always room for cinema in the content value chain and as long as cinemas deliver what customers expect, they will always be acknowledged as the best way to consume films.”

Nu Metro said business was yet to return to normal levels for them too.

“Nu Metro is doing well under circumstances. Business is of course not close to the levels from before the Covid-19 pandemic, but we are encouraged by attendance figures since we’ve reopened on a limited basis from end August 2020,” said Chantelle Burrows , Nu Metro Cinemas marketing and content executive.

“We have seen encouraging audience attendances, albeit not at the same levels as this time last year.

“All Nu Metro cinemas have extensive precautionary health and safety protocols in place, to keep cinema goers safe and comfortable – even going beyond the requirements of governmental regulations.”

While Nu Metro are encouraged by the growing attendance figures, they say the pandemic has had a terrible impact on the cinema industry. Cinemas in the country were forced to close their doors for five months due to the pandemic.

“Apart from the current limiting factors on all businesses during the pandemic, it is also worth remembering that cinemas were forced to close down for over five months, during which no business could be conducted or revenue generated,” said Burrows.

“It naturally follows that the impact on the cinema industry worldwide has indeed been harsh.”

Burrows added that Nu Metro hadn’t had to close down any of their cinema houses, despite the harsh impact of the pandemic.

“We are in the fortunate position of not having closed down any of our cinema complexes.

“We have however not reopened all of our cinema complexes – as part of Nu Metro’s responsible business strategy under the limits of the lockdown, to ensure the future sustainability of the business.”

The Saturday Star

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