Industry Report: Distribution and Exhibition
Digital Cinema Experience
by Peacefulfish (Media Consulting Group)
- LCEEI, the Lapland Centre of Expertise for the Experience Industry and Peacefulfish developed a research project to identify the challenges and opportunities facing the film market in digitalising cinema.
LEO, the Lapland Centre of Expertise for the Experience Industry, and peacefulfish, the consultancy for financing the content industry have joined forces to conduct a unique piece of qualitative research to better understand the opportunities of the digital cinema switch from an experience point of view.
Financing the switch to digital cinema is a challenge for the exhibition market. Based on the experiences that have been gathered on the sites that are already equipped with DCI-conform (conform to the recommendations of the Digital Cinema Initiative) digital cinema technology, many assume that consumers won’t be willing to pay a premium for the novelty of digital screening in the long run. This study explores cinema-going from the Experience Economy point of view in order to find out how the Digital Cinema Experience can be enriched.
First, cinemas are competing in the same market place with other experiences, not just other ways of seeing a film. This means the cinema must be a relevant and meaningful experience that people are willing to spend their time on and pay for. Hence, it is vital to understand which needs are expected to be satisfied by going to the cinema in terms of personal development and social interaction. Secondly, the cinema experience must be understood as a complex experience, starting with the decision to go to the cinema and ending when the memories start to fade. This is the time consumers spend with the experience. The total experience must be managed and can be utilized for creating revenue.
On the significance of cinema, two main points emerge. One is the quality and atmosphere of cinema screening, and the other one is its social significance. Which point has more weight depends on the customer’s age and situation in life.
Where advertising is concerned, younger audiences relate more positively to it than other groups, but often find the current manner of advertising irrelevant and boring. In general, advertisements were seen mainly as something to be endured rather than enjoyed. All of the groups felt inspired and influenced by movies to some extent, but were adamant that advertisements themselves had no influence on them.
With regard to social significance, we found that cinema visits are done primarily as a group activity. For the majority, the cinema visit is a collective experience. What happens after the movie is a central part of sharing the experience. The feeling of belonging to a group during the cinema experience is an important aspect; however, this does not translate to meeting other people at the cinema. Only in the Third Age group people didn’t mind going to the movies alone.
The focus groups participants did not have many ideas about new services, and mainly suggested alternative content such as games and events, restaurant services, and products. An important find was the realization that consumers do not think cinemas could offer anything very interesting in terms of innovativeness. When prompted, most were interested in additional digital services such as film-related information, additional materials, soundtracks, and customized marketing. They were also frustrated with the inflexibility of programming and would have liked to have an influence on the screening times and programme. This shows that cinemas need not only to reduce frustration as much as they can, but also that they need to regain their original role of being pioneers for technological invention in their professional area of “film”.
In order to improve this situation CRM systems need to be integrated to a greater extend into the exhibition business. Based on this information it will be possible for exhibitors to select from the ever growing number of content offers, formats and platforms available. In order to manage alternative platforms such as mobile or online in the cinema context content management systems need to be adapted. Especially in regard to the already existing Theatre Management Systems the question is how these can be developed further to cater for the arising needs by today’s customers.
Based on the expert interviews it becomes clear that each industry has its very own agenda and that they are at times diametrically opposed. Exhibitors are naturally the ones most involved in testing the opportunities that come with the new technology, albeit only those with enough money for the needed investments or who get financing from other sources, e.g. public support. On the other hand, other industries are looking into their options with new digital technology for the screening of films, but also for the screenings of advertisements as well as cinema management systems and customer relationship tools. There are three major issues: 1) which digital technology package most benefits the cinema, 2) how will the new equipment be financed and 3) which business model(s) can accommodate most interests of the players involved. The first and last issues will resolve themselves or be tested in pilots or experiments; the second issue is treated on a national level by associations and commissions as well as integrators and service/solutions providers. The time horizon is still not clearly defined, although country-wide roll-outs in Europe could start as early as 2009.
Digital cinema technology enables cinemas to offer a richer experience to their customers. Together with other digital technology that involves other platforms such as mobile and online, the experience can be enriched even more to benefit all engaged players: customers, exhibitors, advertisers and all other participating parties.
More information and ordering of the study at www.dodona.co.uk/experience.htm. For further enquiries contact Frauke Feuer, consultant, at firstname.lastname@example.org
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