How fleapits keep audiences biting

UK cinema audiences keep rising, but as the market matures chains are turning to alternative content and loyalty schemes to drag the public away from their DVD players and widescreen TVs. By Branwell Johnson

Movies with a rock’n’roll soundtrack once inspired bouts of seat-slashing at cinemas, but the UCI Cinemas chain will be hoping for a different response – perhaps a mass waving of cigarette lighters – when it screens a live concert from soft-rock giants Bon Jovi.

Screening concerts – an exercise conducted in partnership with UCI’s Vivendi Universal sister company Universal Music International – is one of a number of initiatives by cinemas to develop new revenue streams and to encourage regular attendance. While admissions are buoyant at the moment, cinemas face tough competition within the sector from other movie distribution channels.

This year, cinema admissions are expected to be at their highest since 1971, with a full-year projection of 174 million, driven by a series of high-profile sequels to successful hits such as Lord of The Rings, Men In Black, Star Wars and Harry Potter. Admissions in the first half of the year were up 22 per cent on the same period in 2001 (CAA), but insiders acknowledge that cinemas’ fortunes are heavily dependent on releases.

Despite rising admissions, the UK still has a relatively low rate of cinema attendance. In 1995, we visited the cinema an average of 1.84 times each. By 2000, this had grown to 2.4 visits and by 2001 it was 2.62 (Dodona Research). Compare this to the US, where annual cinema visits per head stood at 4.7 in 1995, and by last year had risen to 4.97.

Alternative programming enables cinemas to make more use of their “downtime” during the week, and encourages non-regulars to visit modern venues with their innovative sound and projection facilities.

Already this year, Odeon cinemas have screened England’s World Cup matches live. The chain has also held a computer games tournament, with the action up on the big screen. UCI, meanwhile, has screened pre-recorded Broadway stage musicals and its latest initiative will see Bon Jovi’s September 18 London concert broadcast live via satellite to 11 cinemas. This is the first European live concert transmission to a cinema chain, and UCI is considering programming a number of similar events with Universal Music International in the coming months.

Both the music and cinema sectors see such transmissions as an opportunity to further test recently introduced digital projector technology. Leo Wyndham, new media co-ordinator at record label Mercury UK – which handles Bon Jovi – says: “The partnership with UCI represents a new direction for the music business in terms of reaching a wider audience and opening up a new stream of business.”

UCI head of marketing Janet Smith points out that, ten years ago, live broadcasts were impossible.

She adds: “The cinema, to us, is an out-of-home big-screen experience. For the majority of people that means – and will continue to mean – films, but if we can put other things on the screen, which are entertaining and benefit from the big-screen format, we will.”

Odeon head of marketing Luke Vetere agrees with the strategy and says: “Cinemas have natural downtimes during the week. That’s when we want to generate additional revenue.” He adds that the chain is looking at screening further live sporting events, including boxing matches.

One industry observer says that relying on big-budget movies alone is not a healthy strategy in a changing environment. He says: “The market is highly reliant on content – ma

inly the big blockbusters from Hollywood – and there are now more ways that people can consume them.”

Digital broadband has the potential to deliver movies to the home, while DVD is proving attractive and driving sales of home cinema systems. Cumulative sales of DVD players now stand at 4.5 million (GfK).

The same analyst says that, while special effects-based movies still attract the crowds, who want to see them on the big screen, films from other genres do not need to be seen in the cinema for full enjoyment.

In another move to increase the frequency of attendance, cinema chains are introducing loyalty schemes. Odeon has launched a trial &£25-a-year VIP card at its Kensington site. The card entitles (c) holders to VIP seating, access to preview screenings and question-and-answer sessions with stars and directors. UCI has a Gallery package, which gives customers willing to pay twice the normal ticket price free soft drinks, popcorn and hot beverages. It also allows them to bring alcohol into the auditorium.

While the Odeon and UCI initiatives seek to give added value for a higher cost, UGC Cinemas has taken the discount route. Its Unlimited Card costs &£9.99 a month (&£12.99 in the West End) and allows holders unlimited visits. UGC declines to divulge the number of card holders.

One chain that has yet to take up alternative programming or loyalty schemes is Warner Village. The chain is concentrating its resources on improving the film-watching experience and on developing revenue from the business sector.

Corporate sales manager Mark Lutitt says: “Our business is to show people movies in the best environment we can.”

But this has not prevented Warner Village from exploring alternative revenue streams: it has set up an events unit for corporate conferencing and hospitality, and is focusing on sponsorship packages. It is even looking for a brand sponsor to advertise in the “on hold” time at its call centre.

Exhibitor revenues are limited by the number of sites they operate. New cinemas are still being opened, but observers say that a period of consolidation among the chains is likely after such rapid growth.

Dodona Research managing director Karsten Grummitt says the rush to build has slowed considerably, following a period of heavy investment in multiplexes. Grummitt adds that, while chains such as Odeon and Warner Village continue to expand, the emphasis has been on refurbishment and improvement.

There are 18,843 people per screen in the UK. In 1995, there were 29,232. In the US, there is a screen for every 7,547 people, against one for every 9,452 people in 1995. This suggests that there is still scope for more screens in the UK, but chains are wary – the US has seen an oversupply, and many chains filed for bankruptcy protection in 2000.

Screening concerts and football matches is just another aspect of cinema’s increasing pursuit of innovative programming, claims John Wilkinson, chief executive of the Cinema Exhibitor’s Association. He points out that in the not-too-distant past, cinemas showed newsreels, cartoons and other entertainment. Bon Jovi’s rock histrionics could be the wheel turning full circle, as cinemas once again put something more than the latest hot young movie star on the silver screen.

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