Cinema’s resilience: Exhibitors, industry execs and media buyers on the stop-start recovery

Due to factors including ongoing snap lockdowns, cinema has lagged behind other sectors of the media when it comes to attracting advertising in a post-COVID world. Mumbrella's Zanda Wilson chats with industry experts, as well as media buyers about what 2021 looks like for cinema.

Few sectors of the media suffered as much as cinema during the coronavirus pandemic, and going by recent ad spend data for December last year, a full recovery remains away off.

Cinema, like much of the entertainment industry, was one of the first things to shut down when the pandemic hit, and it may be the last to recover. Ad spend for December was down 74.2% year on year for cinema, according to SMI data.

Ultimately, the impact of continued and sudden snap lockdowns on cinemas in Australia is a burden no sector of the media can really relate to.

Graeme Mason, CEO of peak industry body Screen Australia, perhaps sums up the impact best. “It was the hardest hit of everything we do from production to distribution to exhibition, cinemas were shot overnight. You had thirteen thousand people out of work. It’s a $2 billion industry suddenly shut.

“We imposed rules on things like entertainment, venues and cinemas that aren’t in place in other countries. So that makes it very hard to bounce back.”

It began with extended shutdowns as Australia dealt with its first wave of COVID-19 in early to mid-2020. Movies were considered non-essential, and many, many fewer feet came through the door.

And though ad spend revenue dropped across most media, it was also true that radio, television, and even outdoor (which was impacted harder than most), were not forced to stop entirely.

Australian cinemas had hoped that with community transmission returning to zero, people would flock back to the movies. But due to a combination of factors including outbreaks in most states (plus Victoria’s extended lockdown), as well as the impact of COVID in delaying movies in production, cinema would go on to endure one of its worst years for revenue.

An opportunity to streamline

When it became apparent to cinema advertising provider, Val Morgan, that it was going to be a slow return, they decided to take the time to improve processes.

Val Morgan managing director Guy Burbidge said there was an opportunity to streamline their offering for advertisers. “We looked to change a few things that are always on the agenda to change, but we never had the actual time to change it,” he says.

“So we used that time really well and I think we came out of that as a stronger business, ironically enough. As we’ve sort of gone through the backend of last year we’ve had to sort of change three key areas. So one is our greater focus on audience, and that is our ability to deliver key audiences and ensuring we are delivering and forecasting as accurately as possible.”

Val Morgan managing director Guy Burbidge

“The second part was demonstrating the value. Despite the fact that we’ve had multiple cinemas locked down, cinema has continued to deliver a really strong and valuable audience for advertisers.

“Third and finally we’ve been looking at our opportunities to talk to our clients around innovation, and working with our exhibitor partners to think differently about how we deliver the cinema experience.”

Hoyts Cinemas also saw an opportunity to push forward and keep expanding its offering, betting big on being well-placed to welcome the crowds back, whenever they should return in big numbers.

Director of sales, marketing and content, Stephanie Mills, says Hoyts now has powered recliners in the majority of its cinemas across Australia.

“We have done major multi-million-dollar renovations at several locations over the past 18 months, with the latest being Entertainment Quarter and Chatswood Mandarin in Sydney, and Highpoint in Melbourne seeing not just the seating upgrade to powered recliners, but also a whole new food and beverage offering with our Treat City concept, as well as our Artie’s Bar & Café.

“We opened a brand-new cinema last year, too! It is our first in The Shire, located right in the heart of Cronulla and has seen amazing results in its first few months.”

Should advertisers still be wary?

So is it fair enough that advertisers remain hesitant to dive headfirst back into the market? Perhaps in a sign of why we’re yet to see advertisers flock back to cinema, media buyers are split on the issue.

On one side, Nunn Media’s managing director for Sydney, Chris Walton, says advertisers “absolutely” remain wary of intermittent lockdowns. “When all it takes is a single case for some states to go into lockdown, cinema unfortunately suffers from being one of the most exposed channels to short-term outbreaks,” he explains.

Nunn Media’s managing director for Sydney, Chris Walton

But MediaCom head of marketplace, Sydney, Nick Thomas, says marketers would do well to remember that cinema “isn’t a reach play”, so lockdowns shouldn’t necessarily be of ongoing concern. “It’s about engagement, impact and showcasing client’s big bold creative ads in all their glory on the big screen.

“Our cinema partners have been working very hard to ensure everyone feels protected to rebuild confidence so that lockdowns and changes are well managed. “

Of course, local lockdowns are just part of the story. With Australia – and the global cinema industry in general – so heavily reliant on a supply chain of content coming out of the US, where the pandemic has been significant, there simply hasn’t been the steady stream of blockbuster content coming out of Hollywood that advertisers are used to.

“While the studios are continuing to push back their big tentpole releases, that makes it very hard for cinemas,” Mason says. “The 800-pound gorillas keep getting moved off the schedule.”

Hoyts’ Mills, says the content slowdown and constant changes to release schedules “felt like death by a thousand cuts”.

“There was nothing more disheartening to have to refund ticket sales for movies that got delayed. And watching the release slate dwindle the way it did required a lot of quick thinking and a very resilient attitude to keep plugging away at things,” she tells Mumbrella.

For lack of new content, Aussie cinemas have dipped into the archives, with Hoyts screening everything from 70s horror films to a Halloween showcase, Harry Potter marathons, and more, to encourage people to come through the door.

A simple solution, right? Well, not quite, says Mills. “…this meant that we had to do everything – all the marketing, the creative, the promotion, when typically, a studio helps to create demand for their titles via a sizeable marketing campaign.

“In all honesty, it was exhausting. A lot of work for modest returns, but without new movies or movies with campaigns behind them, we had little choice but to do it as we were in survival mode.

“I heard a great term come out of this period – post-traumatic growth. I feel that the last year has made us more agile, brave, and resilient than we ever were.”

Local titles are thriving

With a dearth in international films, it makes sense that locally-made productions have done well during this period. But Aussies are a discerning bunch when it comes to cinema, and two high-quality titles have stood head and shoulders above the rest recently.

“We had two very strong local films release over December and January; The Dry, starring Eric Bana, which has taken a much deserved $16.3 million to date, and Penguin Bloom, starring Naomi Watts which has taken $5.23 million so far,” Mills says.

Hoyts director of sales, marketing and content, Stephanie Mills

Val Morgan’s Burbidge points out that markets with lots of local content have been the quickest to recover, when it comes to cinema. “The Dry and Penguin Bloom have just been fantastic examples of great locally produced content and it is always really important to have a really strong, vibrant, local production industry.

“Markets like China and Turkey have recovered well because they have sizeable amounts of local content being produced.

“I think it’s a real opportunity to really double down in that area not only from an economical economic perspective but from a marketing perspective and really get behind those local productions that are so valuable.”

Screen Australia’s Mason agrees that Australian films have taken their chance to shine in the spotlight amid a lack of Hollywood blockbusters on the slate.

“The Dry, that’s been number one for five or six weeks, it’s on its way. It’s taken 20 million and it’s going to be one of the most successful Australian films have been, in the top 20 it easy if not in the top 10.

“I think the real takeout is two things – the incredible resilience and ability of distribution and exhibition to pull it back and get it back going again.”

Cinema remains resilient

Resilience, there’s that word again. As I spoke with exhibitors, cinema advertising companies, industry body representatives, and media buyers, that word kept coming up again and again.

The Australian movie industry is “resilient”, they insisted, something that can be seen in the fact that cinema was so strong before COVID hit, despite doomsayers predicting over and over that new tech (DVDs, home entertainment Blu-Ray, and streaming) would spell the end of movie attendance as we know it.

So what is the secret to this historical resilience?

“Cinemas have dealt with the advent of television and then cable… it’s a different thing than watching something at home,” Mason says.

“So I guess what that’s saying to me that shows people still want to go to the movies. We loved sitting on our sofas and watching, you know, Stan and Netflix and Amazon and Disney Plus. But there’s something special about going to the movies and I think it’s ingrained in Australia.”

Screen Australia CEO Graeme Mason

And while ad spend is still recovering, the data is there to show that attendance, specifically on a semi-regular basis, is bouncing back.

According to Nielsen Consumer And Media View data, attendance at the cinema on a monthly basis is now just above the levels pre-lockdown (January-March 2020). 11% of Australians 14+ have attended the cinema monthly (2.265 million monthly cinema goers), 2.5% higher than Q1 attendance in 2020.

More regular attendance is still only at 47% of Q1 2020 levels, but weekly visitation at the cinema is up considerably from Q3 of 2020 (June-August, 38% of Q1 levels).

MarCom’s Nick Thomas says it’s a combination of Aussies loving cultural experiences, and cinema-going being more of an “appointment” than other forms of media.

“We shouldn’t be comparing Cinema to a streaming service or any other screen. Cinema is an appointment to view experience that extends further than any streaming service,” he says.

“While there have been setbacks in the past year, Aussies love cultural experiences and being out socialising and Cinema delivers on all of these, that’s why it’s continued to go from strength-to-strength in recent years.”

Nunn’s Chris Walton highlights the ability of the industry to “innovate”, without which we might have seen the numbers fall in recent years. “Cinema has proved so resilient over the years because of the experience of going to the movies has always been so good.

“Yes people have streaming services at homes, but they also have kitchens and that hasn’t stopped them going out to eat. There is no better place to watch a great movie than at a great cinema.”

A ‘magical period’ on the horizon

So what should we expect when the content starts to flow from the US again, when those “800-pound gorillas” finally make it here? Well, Mason reckons, “when we do get that product, we’re going to have this magic period when you’re going to have a blockbuster every weekend.

Mills agrees. “We know that there is a huge backlog of big movies that are specifically being held back for release into cinemas – hence the ongoing delays. Studios see these movies being theatrical releases, which is a fantastic sign.”

MediaCom head of marketplace, Sydney, Nick Thomas

A combination of a vaccine and a chocked content slate on the horizon will see Aussie cinema come back, and even grow past pre-COVID levels, Thomas says.

“ I don’t doubt that some advertisers are waiting for the bank of Hollywood Blockbusters to align their brands with, it’s powerful when you’re assimilating your brand with a franchise like Bond, for instance.

“I think cinema will come back with a vengeance and will even see growth in the future. It’s already started to happen, but once the premium content slate comes back I think we will see a very quick recovery as Aussies crave normality, crave excitement, and start to restore old routines and enjoy getting out of their homes more.”


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