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Cinema: Salty or Sweet?

Along with most of the leisure and entertainment sector, the cinema industry was also decimated by the recent global pandemic. Lockdowns played into the hands of streaming service providers with subscriptions topping 1 billion globally for the first time in 2020 as people found ways to pass the time while stuck at home.

cinema salty & sweet
Warren Linsdell Director, Media 09/08/2022

The fight for viewer attention in times of crisis

Jump forward to our newly discovered relative freedom, we’re seeing signs of change to the film viewing landscape. Although still leading the market, Netflix announced a decline in new subscriptions at the end of 2021. While some of those viewers may have defected to Disney+ or Amazon Prime Video, a recent article in ‘Screen Daily’ drew attention to the loss of half a million UK households from the streaming market between April and June of 2022.

The recovery of the cinema industry suggests that this very entertainment habit hasn’t become irreversibly engrained.

A recovering industry

At the same time, the cinema sector in the UK is showing signs of recovery. According to the British Film Institute’s Research and Statistics Unit, admissions in the first 3 months of 2022 remained 26% below the same period for 2019.

However, these numbers will be partially depressed by legal restrictions still being in place towards the end of February. With 27.8 million cinema admissions in the UK during Q1, sales are forecast to be only around 10% lower than 2019 levels by the end of this year.

This reversal of fortune may, to some extent, be due to the cost-of-living crisis where consumers are buckling down on regular outgoings, hence the apparent decline in streaming subscriptions, to carve out some cash for the odd luxury or treat or the opportunity to get out and about with family or friends every now and then.

Changing consumer behaviours

While some pre-pandemic consumer behaviours may have changed forever – online grocery shopping, for example – the recovery of the cinema industry suggests that this very entertainment habit hasn’t become irreversibly engrained.

At Savanta, we were interested in these developments, so we explored this further among a nationally representative sample of 2,000 UK adults. What we found was, among those who visit the cinema, over two-thirds either particularly enjoyed the overall experience or the social aspect as being the main appeal. For 3 in 10, going to the cinema still feels like a special occasion, and another 3 in 10 feel it gives them a break from everyday life.

When comparing their relative experiences of cinema vs. streaming, consumers were marginally more likely to say they could enjoy their preferred genres through streaming services and viewed both channels similarly as an ideal way to spend an evening. But they were 3 times more likely to say cinema is the best way to experience a new film. That seems to be born out with people flocking to see new releases, such as Jurassic World Dominion and Minions: The Rise of Gru, and Top Gun: Maverick, the biggest grossing film of the year so far.

An arduous fight for viewer attention

There are also further apparent risks for steaming service providers to bear in mind. 4 in 10 consumers claim they prioritise quantity over quality and almost half feel there is too much choice. Almost half also say streaming services are easier to switch off from/not really watch, as well as being half as likely to say what they are watching has their undivided attention than when they are at the Cinema. That’s an interesting point from an advertiser’s perspective. In fact, a campaign evaluation we recently conducted on behalf of one of our clients showed campaign recall via cinema was one of the lowest scoring channels in absolute terms but generated one of the highest levels of recall per £ spent relative to other media channels. This showed cinema to be a cost-effective medium to enhance overall campaign awareness when supporting other mass market media channels.

With all that said, there is a bit of a cloud looming for cinema and streaming services as nice-to-haves rather than necessities in the current economic climate. While streaming services are three times more likely than the cinema to be viewed as good value, 4 in 10 still consider these services to be too expensive. But, likewise, the cost of tickets is the most significant deterrent to visiting more often among current cinema goers or visiting at all among those who don’t bother to go, with over half of these two groups giving that as the main reason. With another rise in interest rates just announced and further gas and electricity price hikes pending, only time will tell if this cinema industry optimism is short-lived or how the battle between paid for steaming services will be fought out.

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