The movie theater business and film industry is facing serious challenges this year. The rise in streaming services over the last few years has sparked debate about the practicality of traditional cinemas. Not long after Disney+’s debut and the economic impacts of COVID-19, box office earnings reached an historic all-time low in 2020.
To stay afloat, movie theater brands are taking radical steps to manage the disruption and pandemic-proof their operations. Randal Gindi of Brooklyn, New York, entrepreneur and founder of the Warner Media Group, an entertainment and film production company, discusses how movie theaters can remain viable for the future and in 2021.
Change the Price Structure
Movie theaters are operating on a financial model that is outdated by 50 years. Among its many antiquated models is pricing, says Randal Gindi.
Theaters should consider adjusting ticket prices during times when there are more empty seats, such as Monday-Wednesday or during the earlier part of the day. Adopting this variable pricing model would also allow theaters to increase ticket prices during high-demand showings, like evenings and weekends. Reserved seating is another opportunity to match higher pricing with increased customer demand.
Randal Gindi notes that a subscription service can have powerful results on the theater industry. Many enjoy buying season tickets — it is simpler and helps viewers get “more bang for their buck.” Subscriptions can also significantly increase attendance.
Get in the Marketing Game
Exhibitors and studios used to share the cost of newspaper ads. Today, studios pay for everything and exhibitors have little to no marketing strategy. If theaters followed the general business guideline to spend 20% of revenue on marketing, they could acquire and retain more customers.
Personalize the Movie Experience
Theaters should consider creating special events, like a pajama night. They can also sell branded movie merchandise before and after the movie. Some theaters have already added a Snapchat booth in hallways. If theaters give customers an experience they can’t get anywhere else, those customers will keep coming back, says Randal Gindi.
Take Advantage of Social Media
Theaters have a unique opportunity to partner with local social media influencers and introduce films or represent the theater and many of these influencers will do this in exchange for movie tickets. Social media can help theaters announce, give sneak peeks, or even post silly “behind the scenes” skits with theater staff.
Adding a social media strategy will attract younger audiences. And if theaters allow smartphone use during movies, the amount of positive user-generated content would be astounding. Imagine social media feeds blowing up with branded hashtags and positive reviews from friend and family — this is free and potent marketing, says Randal Gindi.
Look to the Past, Change the Present, Flourish in the Future
Historically, movie theaters seemed to be immune to disruptions in the entertainment and film industry. Many thought that the television would end movie theaters in the 1950s, but the opposite occurred instead. Theaters also outlasted the rise of home video in the 1980s and the fall of Blockbuster in the 2000s.
The movie theater industry is in a unique position to reinvent itself. While most consumers are choosing to stay home to slow the spread of COVID-19, movie theaters have plenty of time and space to make profitable changes.
In a post-pandemic world, hopefully in 2021, people will demonstrate pent-up demand for various recreational products and services, and movie theater outings will likely be one of them. By making a few of the changes suggested by Randal Gindi above, cinemas can overcome current obstacles and remain viable for present and future generations.