Ster-Kinekor and Nu Metro might be facing an uphill battle, but the cinema operators maintain they still have plenty to offer South Africans.
The increasing number of streaming services becoming available in South Africa might signify the start of a transition period for how we consume entertainment.
Like much of the rest of the world, South Africans are attending cinemas less, suggesting a slow conversion from cinema being the preferred family movie-night destination to online video streaming services.
The Motion Picture Association’s annual THEME report tracks the theatrical and in-home entertainment industry in the US and globally.
It’s no surprise that the Covid-19 pandemic decimated global theatrical earnings in 2020 due to worldwide lockdowns.
Local theatre chain Ster-Kinekor was no exception, as the company entered voluntary business rescue in January 2021 to stay afloat.
Besides the lockdown, one of the primary reasons for theatres’ decline locally and globally was a substantial decrease in global film production and distribution.
However, box office revenue increased once film production ramped up again, and consumers were allowed to return to cinemas.
The 2021 THEME report shows that the global box office market was worth $21.3 billion last year, an 81% increase over 2020’s $11.8 billion.
Europe, Middle East & Africa’s (EMEA) 2021 box office market had a 53% increase over 2020’s figures — from $3.3 billion to $5 billion.
If you consider these trends and the recent lifting of South Africa’s state of disaster, local cinemas will likely start to bounce back from 2022 onwards.
However, this slight increase is still nothing compared to home entertainment’s growth over the past few years.
The THEME report states that the international digital home entertainment industry has seen a 24% increase in value compared with its 2020 figures.
The EMEA home entertainment market has seen the most significant growth, going from $16.2 billion in 2020 to $19.6 billion in 2021 — a 116% increase.
With affordable streaming services like Disney+ coming to South Africa soon, it isn’t hard to see why cinemas struggle to attract customers.
In North America, the number of tickets sold in 2020 was 240 million — much lower than the previous year’s 1.24 billion.
Despite 2021 North American ticket sales seeing a 100% increase to 470 million in 2021, it is still far below pre-pandemic levels.
This trend indicates that cinemas are making a slow go of returning to their former glory — and perhaps never will.
Nevertheless, this doesn’t mean that cinema is dying, and theatres aren’t going down without a fight either.
Ster-Kinekor believes that cinema is “central to popular culture” and that although its “obituary has been written many times”, it is here to stay.
Similarly, Nu Metro Cinemas’ operational executive Andries Basson told MyBroadband that while streaming is an alternative to the cinema, it cannot replace it.
“Cinemas deliver a multi-dimensional entertainment experience which can’t be duplicated via other platforms.”
Basson also stated that the recent massive box office success of Spider-Man: No Way Home shows that people will still go to cinemas in droves to watch limited theatrical releases.
Local theatres are also using creative strategies to attract new customers.
For instance, Ster-Kinekor has launched a kids’ cinema in Gauteng that offers slides and bean bag seating.
Basson also said that cinemas’ value is not limited purely to movie-going.
Nu-Metro’s value also lies in hosting events, including conferences, birthday parties, corporate events, and special screenings, he said.
“Cinemas present versatile real estate for entertainment experiences across the value chain,” said Basson.