Doomsayers have predicted the demise of cinema for years, but trends such as streaming live content and cross-platform partnerships could provide new revenue and advertising channels, writes Nicola Clark.
Daniel Radcliffe confessed to crying while filming the final scenes of Harry Potter and the Deathly Hallows: Part 2. Some cynics may have thought it wouldn’t be long before cinema advertisers would be doing the same.
There is no question that the Harry Potter franchise has delivered major revenues to the industry, but what of life after the bespectacled wizard? Some believe that the shortening of the cinema-release window, which could result in movies being screened in living rooms within weeks of their cinema debut, combined with the continued threat of online piracy and jitters over the future for 3D cinema, will spell a tough 12 months for cinema advertising.
Simon Rees, managing director at Digital Cinema Media (DCM), says there is no doubt that there is ‘life after Harry Potter’. He points to several blockbuster releases coming up, including a biopic of Margaret Thatcher, The Iron Lady, which is already being referred to as ‘the next The King’s Speech’.
Rather than seeing the rapid evolution of digital platforms as a threat, Rees says that such innovation will be a ‘serious enabler’ for cinema. ‘Cinema has sat on its laurels for too long and now the industry is energetically looking for new forms of entertainment to develop,’ he adds.
Despite the downturn, the latest figures from the Cinema Advertising Association (CAA) show the medium remains hugely popular, with 17.3m admissions to the big screen in the UK and Ireland in February alone. This is a year-on-year increase of 15.8% and makes it the strongest February for cinema admissions in more than 9 years.
There is no shortage of big-budget films set for release in the key summer period. According to the UK Film Distributors Association, 175 films will have been released between May and August 2011. The association predicts there will be 65m cinema visits during those months.
However, this increase in admissions is not being matched by a growth in ad revenues, though Gavin Jones, vision director at media agency MPG, says cinema is holding up well in terms of audiences.
‘The King’s Speech was a phenomenal success and big franchises such as Harry Potter and Twilight did exceptionally well,’ he adds. Despite this, MPG reports that cinema advertising revenues were down slightly in the first quarter.
There are signs that the market is strengthening, however. ‘We see the market as relatively flat year on year, which in itself is a good result,’ explains Jones. While admissions continue to climb and advertising rates remain static, there is huge value to be reaped by brands.
According to Jones, the growth of digital projection is placing more flexibility in the hands of advertisers and enabling cinema advertising to become even more targeted, which could attract more brands to the medium. ‘More advertisers are starting to realise that cinema has much more to offer in terms of reach and recall. The big, sexy campaigns have helped to put cinema in the creative spotlight, but advertising doesn’t have to be big and sexy to succeed.’
Advertisers with smaller budgets and smaller creative visions can now use cinemas to connect with consumers on a local level, he argues. The old-school model of cinema advertising, where brands simply partnered a major film, such as the upcoming The Muppets movie, and did little to activate that association on other platforms, is changing. Charlie Coleman, EMEA general manager of promotions at The Walt Disney Company, says that brands increasingly want to tie up with a film and events around the release, in order to create a conversation in the earned media space with consumers.
‘It is a robust partnership market and films create a huge amount of noise, but the core film itself is just one element of the broader franchises which have several consumer touchpoints,’ adds Coleman. These days, brands tend to activate their film tie-ups through digital and social media platforms. According to Disney, technology brands in particular are showing a greater interest in film partnerships.
Digital platforms – both in the foyer and through the latest digital screens – are also being used by cinema-owners to target more niche markets. Nicole Oakley, marketing manager at Apollo Cinemas, says that digital technology has given cinema-owners more flexibility, and that they are passing the benefits on to brands.
One of the biggest advantages of digital innovation has been the opportunity to offer ‘hyper-local content’ for selected cinemas. For example, Apollo screened a live Japanese rock concert to a sell-out crowd at its London Piccadilly venue.
Live events such as this have been one of the reasons that cinema admissions have remained robust despite a tough economic climate.
Indeed, alternative content, particularly the screening of live events such as concerts and sports, is becoming a focus for the industry. Last year, O2 hosted live 3D screenings of England’s 6 Nations rugby matches to 40 sell-out cinema audiences around the UK. The Football World Cup final last year and this year’s Wimbledon tennis finals were also screened in 3D. Justin Bieber, JLS and Kylie, too, jumped on the 3D bandwagon, with their concerts screened in cinemas. Media agencies point to the London 2012 Olympics, where demand for tickets has far exceeded supply, as a further real test of the potential of cinema to attract audiences to screenings of live sporting events.
Malcolm MacMillan, director of Peach Digital, which has created web activity for Apollo, says cinema chains are successfully shifting their positioning through their focus on live events. ‘The shortening of the release window has been a perennial subject for years, but going to the cinema is an experience, and this is what the industry is focused on,’ he adds.
The 3D opportunity
The advent of 3D technology also brings a creative opportunity and several brands, including Sky and Haribo, have created dedicated 3D ads. However, there is already talk of a 3D backlash in the US, with news that for the first time, bigger audiences turned out to see the blockbuster films Pirates of the Caribbean: On Stranger Tides and Kung Fu Panda 2 in 2D than 3D. While this trend has not yet been recorded in Britain there are signs that the ‘wow’ factor has worn off. So should marketers think again before dedicating time and money to the medium?
Not so, according to data from DCM, which shows that from 2009 to 2010, 3D films increased their share of the market from 16% to 24%, a figure that is expected to increase further this year. Also, Mintel research shows there is strong consumer interest for ’4D’ films, which will include physical sensations. The technology is already in use in theme parks, and could offer the potential of a more immersive experience in cinemas.
As the final chapter of Harry Potter is laid down in cinematic history, a new chapter in cinema advertising is beginning. Digital projection has lowered costs to make cinema a more viable platform for smaller brands targeting niche and local consumers. In the era of the much-heralded ‘third screen’ of the PC and smartphone in the living room, the cut-through delivered by one of the only media that can persuade consumers to switch off their phones should not be underestimated.