By William Brederode
Africa-Press – South-Africa. It’s a rough time for cinemas in South Africa, as movie attendance is still substantially below pre-pandemic levels, predominantly owing to a lack of Hollywood blockbusters, load shedding, and “franchise fatigue”.
This according to Mark Sardi, the CEO of Ster-Kinekor, Africa’s largest cinema company which has more than 60% of South Africa’s market share.
At the moment, cinema attendance at Ster-Kinekor is below 50% of the level it was at in 2019.
Sardi said it was highly unlikely Ster-Kinekor was unique in this.
He said the South African box office, which is a measure of the amount of money spent at cinemas, was at just over 60% of the level it was in 2019.
Sardi added the goal was to get attendance to around two-thirds of the pre-pandemic level.
“Then we will know that we will be on a trajectory with long-term profitability and sustainability. At the moment, it’s going to be bumpy.”
Indeed, it has been a bumpy few years for the cinema industry.
Cinemas worldwide were left reeling following the lockdown restrictions that were implemented during the Covid-19 pandemic, which prevented them from opening or imposed strict restrictions when they were opened.
Ster-Kinekor entered voluntary business rescue in January 2021.
Restriction of public gatherings domestically and the rescheduling of blockbuster films internationally meant the company was operating at a loss and there would be a lack of content for the months ahead.
Ster-Kinekor was thrown a lifeline though as asset managers from the UK and Cape Town invested R250 million in the company, bringing it out of business rescue and saving 800 jobs in the process.
Six months on, movie attendance was still not where it needed to be said Sardi, but there are also some reasons to be optimistic.
Here are the three main reasons that attendance is lacking according to Sardi.
Lack of Hollywood blockbusters
He said there were not nearly as many Hollywood blockbuster movies being released as before the pandemic in 2019, meaning there was not as much content for South African movie theatres to display as before.
Sardi added before the pandemic, cinemas could expect between 130 and 140 Hollywood blockbusters per year.
In the whole of 2023, Sardi expects between 70 and 80 blockbusters to be released.
He said the movie industry was looking forward to the point where 100 to 110 were released over a year, adding South Africa was “heavily reliant on the content that comes out of the US”.
Sardi added:
This was unlike India, he said, which had a “tonne of local content”.
Sardi added India was already at more than 100% of pre-pandemic levels, “because Bollywood is huge and there is a thriving local industry”.
He said this was not the same in South Africa which was “heavily reliant on the US”.
So, a lack of content to display at the moment means there are fewer feet coming through the door.
Load shedding
Sardi said load shedding was affecting attendance and Ster-Kinekor had had to spend a lot to avoid the worst effects of this.
He added people did not feel comfortable leaving their homes to drive to the cinema in the dark to watch a movie when they were not 100% sure whether the cinema would have power.
But ensuring the movie experience is uninterrupted by backing up cinema sites still has a measurable impact on attendance.
So, Ster-Kinekor spent between R20 million and R30 million on making 31 of its sites uninterrupted by load shedding.
Sardi said:
Fifteen of its sites do not have generators installed.
Without committing to the exact numbers, Sardi said in those cinemas, which have the capability to screen uninterrupted through load shedding the attendance can be at around 40%, whereas at those cinemas without the capability, the attendance could sit at 30% of pre-pandemic levels.
He added Ster-Kinekor was making use of targeted advertising to the areas where people were in proximity to a cinema which would not be interrupted by load shedding to ensure those residents were aware of that capability.
Franchise fatigue
Sardi said he thought there was an international phenomenon where people were getting tired of franchises that have been running for a long time.
Fast and the Furious 10, John Wick 4, Mission Impossible 7 and Indiana Jones 5 are all coming out this year.
He added this caused franchise fatigue where people were not as motivated to go and see the latest edition of a movie series they have been aware of for a while.
Weathering the storm
There are several initiatives Ster-Kinekor have in the pipeline or have put in place to weather the storm and boost attendance.
Sardi said Ster-Kinekor’s partnerships were incredibly valuable.
Its partnership with Discovery, which allowed clients up to 50% off movie ticket prices, was invaluable, said Sardi.
Just under 30% of Ster-Kinekor’s ticket sales come through Discovery.
It also has partnerships with Edgars and its own SK club loyalty offerings.
Loyalty programmes helped to remind people of “what we call the primacy of the format”, said Sardi.
In addition to this, Ster-Kinekor had been engaged in talks with shopping centres to try and renegotiate the leases “in a manner that reflects the economic reality that both of us are enduring”, said Sardi.
Ster-Kinekor is also considering featuring other content, including series and e-sports, to drive more people to come to the cinema.
“Repositioning the business away from just being a theatrical business or a cinema business to an entertainment business – what other forms of entertainment can you put in these massive boxes that we have?” he added.
Ster-Kinekor could also look at introducing movie passes that allow you to go to the cinema “as often as you like after paying an upfront fee. We firmly believe that movie-going begets movie-going. The more you go, the more you will continue to go”, Sardi said.
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