Content Cafe


Cinemas innovate to win customers

by Andrew Colley — 9/12/2019

Upstaged by dazzling movie special effects, advances in entertainment technology and the sheer volume of content flowing from studios, the innovations that cinema operators contribute to the film industry are often overlooked.

However, over a 120-year history they’ve used innovation to survive a steady stream of disruptive forces, including the introduction of commercial television in the 50s and the rise of home video rental in the 80s.

Today, having fallen into the cross hairs of digital disruption, exhibitors are again embracing innovation to reimagine the cinema space and grow audiences.

They say that the rise of online subscription video on-demand services and the so-called “Uber-fication of everything” is making it harder than ever to draw customers from the comfort of living rooms and into cinemas.

Technology analyst firm Telsyte reports that between June 2015 and June 2019 the total number of SVOD subscriptions in Australia grew from two million to 12.3 million, driven by an explosion in content designed to be binged at prices that can be measured in cups of coffee.

At the same time, consumers know that home-delivered cuisine in a wide range of quality and styles is never more than a few taps away on a smartphone.

It’s prompted a tectonic shift in the way that exhibitors approach the market, repositioning the sector as part of the “experience economy”, drawing audiences out of living rooms by delivering deeper psychic gratification to audiences than film can alone.

Village Cinemas chief executive Kirk Edwards says it means cinemas “have to go well beyond the screen”.

Jane Hastings, CEO of Event Hospitality and Entertainment, operator of Event and Greater Union cinemas, says the pressure on exhibitors to be customer-centric is intensifying.

Hoyts Group chief executive Damian Keogh agrees and says that attracting audiences — particularly younger ones — means cinemas have to respond rapidly to the caprices of the zeitgeist.

“They’re less about material goods than they are about having experiences that they can share on social media. They want to be seen leading an exciting life,” Keogh argues.

To meet the challenge, cinemas have made large investments in innovation. They range from smartphone apps and online portals that make visiting cinemas as painless as possible to cutting edge seating concepts and technology.

The pew style seating of the mega-complex is rapidly being supplanted by luxury, powered reclining seats, and strategies to match in-home viewing has taken interesting directions.

In South Korea some operators have completely recreated bedrooms and forest scenes in their auditoriums, and single- and double-day beds have also started to become common in Australian cinemas. Event’s Hastings says day beds are proving hugely popular.

However, the humble seat has also started to play a central role in one of the most ambitious innovations in cinema experience to date. Exhibitors have started investing in seating technology that delivers extra-sensory stimulation synchronised with on-screen action.

For instance, Hoyts has invested in the D-Box, a seat which can simulate motion and vibration.

Event and Village have bet on a Korean seating technology called 4DX. 4DX seats also move and vibrate, however, they’re integrated into auditoriums that also produce other sensory effects, including fog, wind, simulated lightning flashes, light mists and rain, and even scent.

In 2018 Village and Event entered a joint venture to introduce them at their flagship cinemas, Village’s Century City in Melbourne and Event’s George Street venue in Sydney.

4DX’s South Korean owner CJ 4DPlex provides software code for around 80 films per year. Edwards said the technology had proved particularly effective and popular for atmospherically rich titles Jurassic World: Fallen Kingdom and Avengers End Game.

The expense associated with 4DX has required a cautious approach to its roll out. However, Event will expand it into Event Cinemas in Pacific Fair and Chermside in Queensland, and Event Cinemas in Parramatta, NSW in time for the release of Star Wars on December 19th.

Keogh says that the hardware innovations have to be matched by those that minimise pain points for consumers, particularly queues.

“Today’s consumers aren’t often in situations where they’re queuing, so they find it a really negative experience,” he says.

It’s now common for cinemas to offer customers the ability to order food and beverages using smartphone apps to avoid queues.

Hoyts has also developed an interactive candy bar experience it calls “Treat Cities” not dissimilar to experimental candy bar market places introduced by Event. Keogh likens it to a duty-free shopping experience; customers freely serve themselves before heading to the checkout. (And, he says Amazon’s “Amazon Go” checkout-free shopping model hasn’t gone unnoticed).

However, arguably the biggest innovation challenge cinemas face is the increasingly customised needs of audiences, particularly in the luxury and family markets.

“All guests must be considered unique — the experience is not one size fits all. In an era where availability of content and quality of technology within the home has never been greater, it is imperative for movie theatres to provide customers with rich and varied experiences,” Edwards says.

Village has developed a concept called “World of Movie Experiences” while Event describes their strategy as “Your Cinema, Your Way”. Hoyts also has a strong focus on offering tailored experiences.

Most consumers would be familiar with these: standard sessions, immersive viewing experiences such as IMAX and V-Max, and premium sessions which couple luxury seating with sophisticated food and beverage service.

However, exhibitors are fine tuning these services to target consumers in a more granular way. For instance, in 2015 Village started offering Vpremium sessions, which sit between its Gold Class and standard sessions.

More recently, Event has developed what is describes as an “ultra-premium” offering called Event Boutique. It offers premium style seating but within the atmosphere of a bespoke, themed auditorium design with a menu supported by high-end food and beverage brands.

Australian exhibitors have also been leaders in developing cinema experiences that address the pain points for young families. If premium offerings are an attempt to compete with the home, then family offerings are an attempt to compete with the playground.

For instance, in addition to letting parents choose kid-friendly seating options such as sofa bean bags or day beds, auditoriums are fitted with typical play equipment, including slides, netted climbing gyms, interactive dance spaces and digital interactive games. In the case of Event’s offering, Event Junior, atmospheric light and sound has been modified to be more suitable for children under 8 years old and sessions include a 10-minute intermission for playtime and bathroom breaks.

Edwards said that the concept behind Village’s offering, Vjunior, was to create sessions more tolerant of behaviour unlikely to be welcome in more austere adult cinema environments.

“Our aim was to create a warm, inviting brand for families that complimented a richer, more meaningful experience with Vjunior and we think we achieved that,” says Edwards.

And, let’s face it, a trip to the cinema is a lot more fun than trying to deal with the aftermath of a malicious software lurking on an illegal online movie sharing networks.


Andrew Colley is a freelance business journalist specialising in technology, telecommunications and media. He has been writing about the sectors and the relationship between them for over 20 years, including ten as a senior reporter for a national broadsheet.