The cinema industry is undergoing a major evolution. While movie theaters once enjoyed reliable crowds flocking to the latest blockbusters, attendance has declined in recent years as at-home streaming services like Netflix and Hulu have surged in popularity. This disruption has created real challenges for theaters - but with the right strategies, streaming video can actually present creative opportunities for cinemas to grow their audiences and revenue.
By leveraging data analytics, enhancing the in-theater experience, and utilizing streaming to drive promotions, forward-thinking movie theaters can thrive amidst the rise of streaming. Rather than view streaming as a threat, innovators are finding ways to embrace it. With the help of cinema-focused solutions providers like Filmgrail, theaters can turn streaming into a driver of sustainable success.
In this article, we'll explore exactly how streaming is impacting theaters, both positively and negatively. We'll then dive into the key tactics for theaters to not only adapt, but harness streaming video to engage existing audiences and attract new ones. The data makes clear that an exciting future lies ahead for the cinema industry by creatively leveraging streaming video on demand.
Understanding Streaming Video's Impact on Theaters
Streaming video has profoundly disrupted the traditional cinema model. On-demand services like Netflix and Hulu have fundamentally shifted how audiences consume entertainment, providing affordable, convenient at-home viewing options. While theater attendance has declined as a result, streaming has also raised consumer expectations around access, choice, and personalization that forward-looking cinemas can cater to.
The Rise of Streaming Video
Streaming video services have seen meteoric growth over the past decade. Netflix hit over 220 million subscribers globally in 2021, while Amazon Prime Video reached more than 200 million. Even newer services like Disney+ gained over 130 million subscribers within two years of launch. This growth has given consumers more on-demand viewing choices than ever before.
Importantly, younger audiences like Millennials and Gen Z tend to prefer streaming services over theater-going. Streaming allows them to watch buzzworthy releases like Stranger Things, The Mandalorian, and Netflix original films on their own time. The convenience and flexibility streaming offers appeals strongly to these demographics.
With streaming platforms investing billions in exclusive content, they can now compete directly with theaters for major releases. Netflix spent $19 billion on content in 2021 alone. This emergence of premium streaming-exclusive content has put added pressure on theaters.
Shifts in Consumer Viewing Habits
The rise of streaming has significantly impacted how audiences choose to watch films and shows. According to Deloitte surveys, the number of movies watched per month increased 22% from 2015 to 2019. However, theater visits over the same period declined. Consumers are clearly watching more content, just increasingly from home.
Access is a huge factor driving the popularity of streaming. While theater-going requires travel, streaming is available on-demand with just a few clicks. Platforms like Netflix are designed for binge watching, with features like personalized recommendations and autoplay. This caters perfectly to modern lifestyles where convenience and personalization are highly valued.
While theaters were initially slow to adapt to these changing consumer preferences, streaming services understood them immediately. By emphasizing access, choice and seamless user experiences, they've attracted audiences away from traditional cinema.
New Competitive Pressures for Theaters
With streaming services now offering extensive libraries of films and shows on demand, they've become direct competition to theaters for audiences' entertainment time and budgets. For smaller independent cinemas, fewer ticket sales due to streaming competition can be existentially threatening. Even major cinema chains face real pressure.
According to an Eventbrite survey, 28% of millennials said streaming services like Netflix prevent them from going to see movies in theaters. And real-world data shows this impact. Regal Cinemas reported a 22% decline in attendance in its 2018 annual report. While larger chains are more insulated, declining ticket sales strain their business models long-term.
Streaming video has clearly disrupted the cinema industry. But with the right innovations, theaters can actually embrace streaming to drive growth rather than simply struggle against its ongoing rise.
Strategies for Theaters to Adapt and Thrive
Rather than view streaming as a threat, forward-thinking movie theaters are finding ways to leverage it as an opportunity to better understand audiences, enhance experiences, and grow their reach. By innovating with streaming-based data, promotions and partnerships, theaters can thrive in the streaming era.
Services like Filmgrail provide resources to help theaters creatively adapt, from cinema apps to build engagement to analytics tapping into streaming data. With the right strategies and technology partners, theaters can embrace streaming to create sustainable success.
Using Data and Analytics
Streaming provides hugely valuable data that theaters can now tap into to understand changing consumer preferences better. Detailed analytics on streaming consumption patterns help theaters program content and experiences their audiences will love.
For example, a small independent theater was seeing declining ticket sales for classic films. By analyzing local Netflix streaming data, they found that interest in classic genres was still high. However, audiences preferred late-night showtimes. By shifting their classic film programming to 10pm showtimes, their revenue from these showings increased 22% over 6 months.
Specialized cinema analytics services like Filmgrail Analytics integrate streaming, social media and box office data to offer theaters tailored insights to optimize programming, concessions, staffing and more to delight audiences.
Enhancing the In-Theater Experience
While streaming provides convenience, theaters can offer premium experiences that households simply can't match. Upgrading amenities like luxury seating, expanded bars/menus, and cutting-edge audiovisual tech enhances theaters' value.
Immersive cinema innovations like 4DX motion seating and 270-degree ScreenX expand how audiences connect with films. Reframing theaters as destinations for nights out on the town also caters to consumer desire for memorable experiences streaming can't provide.
Mobile apps and loyalty programs from companies like Filmgrail further allow theaters to personalize perks and enhance engagement with audiences before, during and after visits. With the right premium amenities and technology, theaters can give audiences experiences they can't get at home.
For example, Alamo Drafthouse Cinema offers special movie-themed menus, luxury recliners, and an adults-only environment, which has driven their success.
Growing Audiences via Streaming
Interestingly, streaming video also offers promotional opportunities for theaters. Partnering with streaming services on trailers and clips helps market upcoming theatrical releases.
Theaters can also encourage fans to see films on the big screen after previewing them at home to experience greater visuals and sound. For example, New York's Quad Cinema had success promoting Netflix original movies being screened theatrically to drive ticket sales.
And services like Filmgrail allow theaters to launch branded streaming apps to build buzz around new releases. Forward-looking cinemas are finding creative ways to leverage streaming video content to drive audiences to the box office.
Key Takeaways on Embracing Streaming Video
While initially disruptive to the cinema industry, streaming video also brings enormous opportunities for growth and innovation. By strategically leveraging streaming data, enhancing the in-theater experience, and building promotions around streaming content, movie theaters can thrive in the modern era.
Forward-thinking cinemas are partnering with solutions providers like Filmgrail to help unlock the potential of streaming video. Rather than view streaming as a threat, these innovative theaters embrace it to better understand audiences, boost engagement, and expand reach.
The future is bright for theaters creatively leveraging streaming video on demand to create sustainable success. With the right strategies and technology partners, cinemas can continue offering irreplaceable in-person experiences for decades to come. By harnessing data, enhancing experiences, and utilizing streaming for growth, theaters can thrive amidst the ongoing rise of at-home viewing.