In a surprising move, Australian cinema chain Event is launching an at-home product.
Probably the last thing you expect a cinema chain to do is give you something to watch at home, but that’s what Event Cinemas is doing.
Event, which takes in about 30 per cent of Australia’s cinematic box office, is launching a video-on-demand platform in which customers can rent movies to watch in their loungeroom.
But the twist is that unlike Apple, Google or the myriad other TVOD (transactional video on demand) platforms in which a $4.99 rental is exactly that and only that, Event’s service is tied into its 2.5 million member-strong Cinebuzz loyalty club.
The idea is that rentals on Cinebuzz On Demand add up to in-cinema rewards, so that at-home viewing incentivises moviegoers back into cinemas.
It may sound counterintuitive for a company that relies on bums in their seats, not bums on couches, but Event Hospitality & Entertainment chief executive Jane Hastings told news.com.au she is confident it won’t cannibalise the theatrical business.
“We definitely don’t want to take the number of visits [to cinemas] down but we’ve got no fear of that. If you decide to stay at home, you’re staying at home. If you decide to go out, we battle with ‘are you going to go to dinner, are you going to take the kids bowling?’. It’s different competitive set.”
Cinebuzz On Demand has been in the works for 18 months, before COVID shook up the cinema business with mandatory shutdowns and a delayed blockbuster release calendar. So, it wasn’t a reaction to customers being forced to stay home for periods at a time, but rather an acknowledgment that “customers can’t be in a cinema 24/7”.
Event is hoping that its database of 2.5 million active Cinebuzz members will find value in a service that offers content curated for them. The service will use a general algorithm in making recommendations based on the taste profiles of what they’ve viewed in cinemas.
Luke Mackey, Event’s director of entertainment, said: “The distinct difference is we already know what they’re watching, and we can actually help them find stuff that’s similar and better. And then the rewards are back in cinema, it’s about closing that loop.”
Hastings added: “The content strategy is we’re bringing in very different things because we want to say to customers, ‘Well, you’ve liked this, but give this a go, you may think we’re crazy for even recommending this to you but give it a go and tell us what you think’.”
Given the competitive video-on-demand landscape Event is wading into, Hastings emphasised that the Cinebuzz On Demand product launching this week is not necessarily the one that remains in a year’s time. Flexibility is part of the strategy.
“We see this as a trial,” she explained. “We really value that relationship with our Cinebuzz customers, so we’ll be asking them [what they want]. We’re not set on this model, it’s a starting point and we’ll continue to evolve it to get it right. There might be a couple of [iterations], there might be a hybrid model.
“Our primary relationship with our customers is that cinema relationship, but how can we nurture that a little bit more beyond that?”
Cinemas have not had an easy past 12 months, and Event, which also operates the Rydges and QT hotel chains and a ski resort in Thredbo, has been hit like many similar companies in the entertainment and hospitality industry. It’s releasing its financial results tomorrow.
But there are encouraging signs of a turnaround thanks to Australia’s relative success in managing the COVID crisis, least of which is the extensive vaccine program.
While cinemas were shut down in March, unlike many territories around the world, they are operating again locally. And the first month of 2021 has proven that audiences are more than ready to return.
The Dry in particular has been a rousing success story for local filmmakers, distributor Roadshow and exhibitors such as Event. Since its release on January 1, its box office has collected more than $16 million and is already one of Australia’s most financially successful local films.
“The Dry has far exceeded our expectations and the distributor’s expectations,” Mackey said. “I think you look at that and go, ‘It’s a great film’ and people could wait and see it at home and maybe they would have in the past but they’re out and about and they love it. They love watching movies.”
But what’s missing is international blockbusters. Since the pandemic, there have only been two releases, Tenet and Wonder Woman 1984. And despite lacklustre reviews, WW84 has taken in close to $25 million.
Event research drawn from its Cinebuzz membership found that there has been no demographic change in the customers returning to cinemas.
The types of moviegoers that were attending before the pandemic are the same as those now. Just because there hasn’t been a new Fast & Furious instalment, doesn’t mean young people have stayed away.
The only change has been the volume of people. The Australian box office in 2020 was $401 million compared to $1.2 billion the previous year.
“Content is our challenge,” Mackey said. “We only have one versus 13 blockbusters in the same period. Ninety-one per cent of our customers will rush out and see a movie, but that’s when those movies return. That’s the whole game. It’s not a customer problem, it’s content.”
The COVID situation in the US and, to a lesser extent, in the UK has been responsible for the delay of titles including No Time To Die, Top Gun: Maverick and Black Widow, but Mackey expects, “once we get to the next 12 months, there will be so many titles”.
And Hastings and Mackey don’t appear to be concerned about the other conversation in the cinema world, the shrinking of theatrical windows, the time period in which movies are exclusive to cinemas before they’re made available on home entertainment platforms.
It’s been a bigger issue in the US where the theatrical environment remains more challenged but even in Australia, Wonder Woman 1984 was available on TVOD a month after its cinema release.
Hastings said the WW84 TVOD release didn’t have “too much of an impact because most of the business had been taken” in cinemas while Mackey said that he believes there will be more flexibility in the future in regards to windows.
But on the whole, given how much money movie studios made from theatrical releases – a record global $US42.5 billion in 2019 – Hastings argued that “studios make 40 to 50 per cent of their revenue from cinemas, they’re not going to take a blockbuster and try to make less money from it by reducing their window”,
What is clear in recent weeks is that the challenges of the US market are not universal around the world. This past weekend, the Chinese box office broke records by taking in $US775 million ($A1 billion) over only three days, led by Detective Chinatown 3 which alone raked in $US424 million ($A548 million).
Most in the industry see those figures and know there is pent-up consumer demand for in-cinema experiences. Now those audiences just need something to watch.
For Hastings, it only reinforced that “cinema is not going anywhere”.
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