It’s weird: streaming services are boosting demand for cinema’s big screens

Subscription video services are capturing more consumer attention and revenue, putting ad-funded TV networks under pressure. But far from cannibalising cinema audiences, streaming services such as Netflix appear to be increasing subscribers’ appetite for quality films on the big screen.

That trend will help cinema to become the fastest-growing ad channel in 2020, with worldwide spend set to increase 12 percent, according to Zenith’s latest forecasts. Advertisers are tapping the growth opportunity presented by record audiences, brand-safe, zero-fraud and uncluttered environments to deliver non-skippable, immersive ads to highly receptive moviegoers.

Rather than killing cinema audiences, as some commentators predicted, streaming services are actually helping to usher in a golden age of cinema advertising.

Streaming + cinema = audience + advertising growth

Approximately 2 million Kiwis have a Netflix subscription in their household, according to Roy Morgan data, up over 35 percent year on year. Many also subscribe to a second service, demonstrating growing appetite to pay for films and shows without advertising.

But far from eroding big screen audiences, the growth of subscription video on demand (SVOD) appears to be driving viewers into cinemas. According to a recent U.S. study by Ernst & Young on behalf of theatre owners, people who often visit the cinema stream more content than infrequent moviegoers.

The survey found:

  • People who visited a cinema nine times or more in the last 12 months spent an average of 12 hours streaming content a week.
  • Of those who didn’t visit a cinema in the last 12 months, nearly half (49 percent) didn’t stream any online content.
  • Those who did not visit a movie theatre at all in the last 12 months, spent an average of 5 hours per week streaming content.
  • Across all age groups, those respondents that visited a movie theatre nine or more times in the last 12 months also streamed at least 10 hours of online content per week.

SVOD under pressure

Meanwhile, increasing competition within the SVOD sector, as traditional TV networks prepare to go head-to-head with Netflix, Amazon and Hulu, means it is likely that streaming services will find themselves under sustained pressure.

“The streaming wars of the 2020s promise to be a bloodbath as too many competing platforms spend too much money on too many shows and charge far too little for it,” according to marketing professor, Mark Ritson.

“But the major dynamic of the last decade, the rise of internet advertising, is finally slowing,” said Ritson. “For the first time in many marketers’ working memories, the fastest-growing ad channel next year will be non-digital, and it’s a testament to cinema’s enduring audience appeal and emotional impact… that the biggest and oldest screen of them all, which has changed little in the past century, has become more powerful than ever.”

Delivering on all key metrics

The shift in advertising dynamic as predicted by Zenith and others is a direct result of the big screen’s ability to deliver on marketers’ key needs at a time when traditional growth categories such as digital face increasing scrutiny and tightening data privacy legislation.

Cinema advertising is set for double-digit growth because it enables the business outcomes and growth that brand marketers are under pressure to deliver. In a nutshell:

Build brand stories cinema’s big screen, emotional impact and high level of trust makes the perfect brand-building medium. Big screens that demand attention and enable social viewing remain the golden receptive moment.

Capture mass reach the movie industry is experiencing a golden age with global box office records being smashed.

Unprecedented, undistracted attention – no bots, no second-screening, just real people. No skipping, no ad blockers, surround sound – in an environment that people have consciously chosen – and paid – to be in.

Taps younger demographics – advertisers can engage hard-to-reach audiences that watch less TV. 36 percent of 14-24 have been to the cinema in the last four weeks, on average 1.5 times. (Source: Roy Morgan)

Brand safe – advertisers have the certainty of knowing what media their marketing material will and won’t appear next to.

Turns audiences on, not off – high impact advertising with controlled frequency means less wastage and reduced risk of ad fatigue.

Cinemas attract an average of 290,000 weekly admissions (source: cineTAM), with 77 percent of moviegoers in New Zealand visiting at least once per month (source: cineTAM Plus). CineTAM Plus data also shows 97 percent of audiences are there for the pre-show, and Kantar Millward Brown research suggests 40 percent of the total cinema reach delivered is incremental to either TV or digital.

  • Matt Tremain is the New Zealand sales director for Val Morgan and VMO.

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