Introduction
Video streaming has exploded in popularity in recent years. Services like Netflix, Hulu, and Amazon Prime Video have tens of millions of subscribers worldwide. As consumers increasingly shift to on-demand viewing, the potential for revenue growth from streaming is tremendous. This article will analyze how cinemas can tap into streaming to open up new revenue channels beyond traditional ticket sales. By launching branded streaming apps, theaters can build deeper loyalty with customers and gain data-driven insights to personalize the moviegoing experience. With a compelling content library and premium viewing experience, theater streaming services can incrementally grow revenue while complementing the core theatrical business.
The Rise of Video Streaming
Video streaming has fundamentally changed how consumers discover and watch video content. Major streaming platforms like Netflix, Hulu, Amazon Prime Video, Disney+, HBO Max and Apple TV+ have tens of millions of paid subscribers globally and account for a significant portion of TV viewing time.
According to Nielsen, streaming accounted for 25% of total TV viewing in the first quarter of 2020, up from just 10% in 2018. The average US household subscribes to four streaming video services and spends over $40 per month on streaming. Netflix alone has over 200 million subscribers worldwide as of 2022.
This growth in streaming reflects a shift in consumer viewing habits. Viewers now expect on-demand access across devices, mobile optimization, and personalized recommendations. Streaming platforms are investing heavily in original content, with Netflix expected to spend $17 billion on content in 2022.
Main Drivers of Streaming Growth
Several key factors have fueled the rise of video streaming:
- Increasing broadband internet penetration enables reliable streaming globally. 5G networks will further boost access.
- Proliferation of streaming-capable devices like smart TVs, tablets, smartphones and media players. Over 80% of US TV households have at least one internet-connected TV.
- Cord-cutting as consumers cancel traditional pay TV subscriptions in favor of streaming. Over 30 million US households are expected to cut the cord by 2024.
- Younger viewers who have grown up on streaming remain heavy users as they age. Over 60% of Gen Z and millennials use streaming most for TV viewing.
- Huge investments in original content by streaming platforms to attract and retain subscribers in a competitive market. Netflix spends over $17 billion annually on original content.
Consumer Viewing Habits
Streaming has dramatically shifted consumer viewing habits away from scheduled programming to on-demand, anytime access:
- On-demand access allows choosing what and when to watch rather than being bound to broadcast schedules.
- Binge-watching entire seasons has become common compared to weekly episode releases on linear TV. About 7 in 10 streamers regularly binge content.
- Mobile streaming now accounts for around 25% of total viewing time as consumers take streaming on the go.
- Personalized recommendations via AI-driven algorithms tailor suggestions based on individual viewing history and tastes.
Video Streaming Opportunities for Cinemas
The growth in streaming presents a major opportunity for cinemas to generate incremental revenue beyond traditional ticket sales and concessions. Branded streaming apps allow theaters to build deeper engagement with movie fans before, during and after visits to the cinema.
Specialized cinema streaming solutions like FilmGrail enable theaters to curate and deliver their own branded streaming content. This provides a new channel for monetization while collecting valuable data on viewing behaviors.
Launch Branded Streaming Apps
Cinemas can leverage white label streaming apps to offer subscribers on-demand access to a customized digital library under their brand:
- Curate a library of cinema-exclusive content like trailers, interviews and behind-the-scenes footage. AMC has created exclusive bonus content for streaming.
- Feature transactional streaming of movies after the theatrical release window.
- Tie streaming app access into existing loyalty programs to add value for members.
- Turnkey solutions from companies like FilmGrail allow launching cinema apps quickly across devices.
Build Customer Loyalty
Branded streaming apps keep the cinema top of mind while providing insights into customer preferences:
- Streaming apps extend the cinema experience before and after visiting theaters.
- Viewing data reveals insights to tailor promotions and marketing for higher conversion. Analyzing genres and actors can optimize recommendations.
- Special offers, perks and giveaways for streaming app users increases loyalty and retention.
Monetization Models
There are several options to monetize branded streaming content:
- Transaction fees for streaming movies after the theatrical release period. AMC charges $19.99 to stream new movies.
- Monthly/annual subscription fees for unlimited on-demand access. Monthly plans from $4.99 - $9.99 are common.
- Ad-supported model with pre-roll and mid-roll video ads enabling free streaming.
- Bundled access with cinema loyalty program membership to add value.
A hybrid model combining a low monthly fee with transactional fees and ads can maximize revenue.
Key Factors for Successful Streaming
Launching a compelling cinema streaming app with strong engagement requires focusing on the core streaming experience.
Robust Technology
- Streaming infrastructure must deliver reliable, high-quality video across devices. Utilizing CDN services helps optimize streaming delivery.
- Apps should be available on all major platforms - iOS, Android, Roku, Fire TV, smart TVs. Supporting Chromecast and AirPlay is also important.
- DRM protects against piracy. Multi-DRM support provides flexibility across platforms.
- Analytics provide data on streaming metrics like viewership, completion rate, and engagement.
Premium Viewing Experience
- Intuitive interface optimized for ease of discovery and viewing. Content is organized in understandable categories and sections.
- Personalization via profiles, watch history, preferences. Recommendations improve based on individual tastes.
- Social features to share titles, rate content and interact with the community.
Dynamic Content Strategy
- Regularly adding new and exclusive content to keep library fresh. Aim for weekly content updates.
- Special events like streaming movie premieres drive engagement.
- Value-added content like behind-the-scenes footage and cast interviews.
The Future of Cinema Streaming
As consumer adoption of streaming grows, cinema-focused streaming apps present an incremental revenue opportunity. Key trends to watch include:
- Original and exclusive content created by theaters could differentiate their streaming offerings. Investing in unique content is key.
- Shrinking theatrical windows may see some movies debut on streaming apps before wider release.
- Personalization powered by data will allow precision targeting of promotions and recommendations.
- Social and gamification elements could further boost engagement on cinema streaming apps.
Conclusion
Video streaming presents a huge opportunity for cinemas to generate additional revenue while deepening customer loyalty. Branded streaming apps curated with cinema-specific content offer a new channel beyond ticket and concession sales. By providing a premium viewing experience comparable to other streaming platforms, theaters can unlock growth with streaming. The key is to leverage data from streaming viewership to customize the experience. For cinemas that embrace streaming as part of their digital strategy, it promises to be an impactful new revenue stream.
Cinemas interested in launching their own branded streaming service should contact FilmGrail to learn more about how their white label solutions can help drive growth.
