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    By Danny Jeremiah, Head of Cinema Products

     

    If you're remotely connected to the cinema industry there have been a couple of stories that won’t have escaped your notice this year.

    The first broke towards the start of the year and the second more recently but they shared a common theme - cinema as we know it is doomed. Whilst I don't share the same pessimism, I thought I'd take the opportunity of my first blog post to share some of my thoughts on how I see the industry evolving.

    “How did distribution innovate in the movie business in the last 30 years? Well, the popcorn tastes better, but that’s about it." This was Netflix CEO Reed Hasting's opening shot, which was swiftly followed by near-universal backlash from the industry at CinemaCon in March. Mr. Hastings seems to have missed the fact that we are, now, nearly 100% digital, regularly screen live events via satellite, offer incredible new immersive experiences, and the list is only getting longer.

    And then, just this summer, Moviepass caused, to put it mildly, a bit of a stir when they cut the price of their 'all-you-can-eat' cinema ticket subscription to just $10 per month and understandably alienating some of their once-friendly exhibition partners.

    How could that price be sustainable?

    The answer: data.

    And data is what I think Reed Hastings was referring to. Netflix is part of the next generation of  data-driven entertainment. They knew, with a large degree of certainty that Orange is the New Black was going to be a hit before they even commissioned it. They can almost guarantee that if you get through episode 2 of Breaking Bad you will make it to the end of the first season.

    Netflix's model works because they can segment their customers into narrow target groups that you could never think of without their analytics. These segments use viewing preferences and demographics to offer insight into any given viewer’s behaviour and predict what they want to watch next.

    Now, imagine studios or cinemas using Moviepass data to green-light or program movies knowing, with Netflix-level certainty that there was a waiting audience. You've massively de-risked the riskiest areas of the business we work in.

    audience cinema.pngOr perhaps, knowing what types of individuals were in the audience so screen advertisers could target their campaigns in a similar way to Google or Facebook. Sure, at times it can be a bit 'creepy' to be shown pop-up adverts of hire cars right after you Google 'flights to Spain' or wedding dresses when your status changes to 'Engaged' on Facebook, but there is strong evidence that consumers do, in the long run, prefer personalised online advertising.

    Finally, the 'cinema-on-demand' format has been tested by various start-ups over the last few years. The concept takes the old '4-wall' booking model and hands the onus over to the audience to gather together a critical mass of like-minded audience members. One of these, or indeed Moviepass itself, could reach the stage where they can offer ready-formed audiences to cinemas on a daily or even hourly basis. Tap the film, time, and city you’d like and the app delivers your ticket and tells you which cinema to go to: Uber-Pool for cinema.

    Whilst it's not yet clear what Moviepass’ long-term plans are for the data they will harvest about their customers' viewing habits, it wouldn't be too farfetched to believe they could, in time, help replicate some of Netflix's predictive analytics.

    The only thing we can be certain about is that this industry, like others, will change and adapt over the coming years, and exhibitors will benefit from maximising their flexibility. The ability to integrate with new technology, dynamically change schedules, and quickly tailor advertising in real-time will become increasingly important. And all these expanding responsibilities and new systems will tax any exhibitor who isn’t using automations to eliminate the time-consuming admin inherent to old workflows.

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