Ster-Kinekor making a comeback

After several difficult years of declining viewership, the pandemic, and theatre closures, Ster-Kinekor is making a comeback with a range of offers aimed at luring people back into theatres.

In April 2024, Ster-Kinekor announced that it was preparing to lay off 236 employees, nearly a third of its 728-person workforce.

This announcement came amid plans to close up to nine of its cinemas in Gauteng, KwaZulu-Natal, and the Western Cape.

Notably, the theatre chain exited business rescue just two years ago. However, the business has also made strides to improve this challenging environment.

Mark Sardi, CEO of Ster-Kinekor, told the Money Show that admissions have increased materially, going up 20% annually from November through April.

This growth is due to several reasons. First, he said, “Hollywood’s got its act together.” In other words, the quality of films released this year is much higher than a year ago.

Ster-Kinekor recently had its biggest out-of-season opening with Mission: Impossible – The Final Reckoning and the live-action Lilo & Stitch. “When the quality is there, the people come,” Sardi said.

IMAX is also a significant driver behind this growth. He explained that this year, 16 IMAX movies are being released, twice the number of movies in any past year.

Even though IMAX screens are few at Ster-Kinekor, they account for a significant number of bookings when a movie is also released in this format.

According to Sardi, this shows that Hollywood is backing premium formats with quality content. “We’ve got a very sophisticated consumer out there who wants to see good movies in an environment that is compelling.”

The challenge is that cinema is incredibly dependent on films released by the United States. November to January and June to August tend to be strong periods because they coincide with holidays.

However, they must also manage the in-between periods when there may not be many strong titles drawing customers into theatres.

Twenty years ago, we had great local films like Tsotsi, Sardi said. “We’ve got unbelievable acting talent in this country. But the environment for making movies in South Africa has just got prohibitively expensive.”

However, there is an opportunity for local content to make a comeback. Countries such as India, Nigeria, Romania, and France are performing better than pre-COVID levels, primarily due to the strength of their local content.

Sardi explained that when audiences support local films and there is funding, it becomes easier to bridge those slower periods. That’s a big opportunity for South African cinema.

New strategies

Ster-Kinekor has also launched a new initiative: its R50 Throwback Cinema, which showcases classic movies like Back to the Future, Pulp Fiction and Home Alone.

Starting in May 2024, the first rotation of titles included Chicago, Meet Joe Black, Notting Hill, and Back to the Future 1. In 2024, the cinema chain aired 34 Throwback Cinema titles, each playing for a week.

They continued this effort this year. “People who love movies love reliving those great movie moments on the big screen,” Ster-Kinekor chief marketing officer Lynne Wylie told MyBroadband.

“This campaign allows us to bring back some of those unforgettable movies for our customers to enjoy at an affordable ticket price.”

Initially, these were only available in a few select locations, but they have proven incredibly successful and have since expanded to 20 theatres.

“The challenge is, of course, getting the content, but it’s been a runaway success for us,” Sardi explained. He added that it also challenges the perception of cinema pricing while providing nostalgia.

It helps boost occupancy in quieter times, such as weekdays. “It’s a nice way just to remind people of primacy and the magnificence of our format.”

This is also one of several offers the cinema chain has introduced to make it more affordable to go to the movies. In the past, high prices have put many people off Ster-Kinekor.

The theatre now offers the Monday–Thursday “Epic Deal”: Coke, popcorn, and a ticket for R149. You just need to sign up for its free SK Club.

Sardi said this also helps them communicate better with customers and do targeted marketing. Ster-Kinekor also has partnerships with companies like Discovery and Edgars.

Discovery gives kids free access at certain times, and adults get discounts on premium formats. On Wednesdays, Discovery members can even redeem points for popcorn.

This article was first published by Daily Investor and is reproduced with permission.