Interesting Tid-Bits

CONNECTED TVs SURGE

The latest stage in the evolution of the TV is the arrival of internet
connectivity, which has surged as improved bandwith and usability allow people access to the vast world of content on the internet.

Strategy Analytics, a media research company, recently conducted a survey of over 5000 respondents in the U.S. and Europe which found that "connected TVs are being purchased at a very fast pace, with over 42 million homes now connected for the purpose of watching TV shows and movies".    We are in day one of the connected TV revolution as UltraViolet (see prior post of UltraViolet) launches its individualized video "locker" concept and Apple considers its own streaming movie service. Connected TVs are going to proliferate, and will be the cinema exhibition industry's greatest threat and competition in the not to distant future.

KODAK & IMAX MAKE DEAL ON PATENTS

In a deal between Eastman Kodak and IMAX, Kodak will license a portion of its patents for an upfront fee of approx. $50 million from IMAX. Reported in a prior Cinema Mucho Gusto post, (see Kodak's Hidden Treasure - 20 September 2011) Kodak has over 10,000 patents which are essentially more valuable than the company itself.
Under the deal IMAX will also pay recurring royalties as it uses Kodak's patents in its  products. IMAX is exclusively licensing 100 patents related to laser projection technology and will get the cinema rights to the bulk of Kodak's remaining patents.  These patents will allow IMAX to deliver digital content to its largest screens, which it previously hadn't been able to convert from film.  For Kodak, the infusion of cash will be welcomed as it transitions into a company that sells digital consumer and commercial printers.

NETFLIX BREAKS PROMISE.......and it costs them

When giving the Cinema Training Central (www.cinema-training.com) seminar on Cinema Management, one of the topics discussed is Branding and Corporate Identity.  A company's brand is essentially a promise.  A promise that it will provide a product or service that it has "promised to deliver".  But once that promise is broken it is very difficult to get it back.  Case in point: Netflix, which last month decided to raise pricing on mail order videos in an effort to force customers to use streaming as the cheaper alternative.  Big mistake.  The Netflix brand (promise) was broken and customers - to the tune of  3 million - stopped using Netflix.  To recover, Netflix had to regroup and publicly renounce its new policy. In the meantime its share price dropped over $100.
Branding and corporate identity are crucial elements in marketing and developing brand equity.  If your company isn't or doesn't brand itself call us for information on our Management Training Workshop on Marketing.

IMPULSE OR SURGICAL ?

According to ShopperTrak, impulse buying by consumers is waning in favor of surgical shopping.  Impulse purchases require people to browse, and that is happening less and less because tech-savvy consumers use the web to get info on the product they want and simply go and buy it and leave the store.
Termed "mission shoppers" , these consumers are visiting stores less which lessens the chance of the impulse purchase.  The research points to the fact that Americans are turning into "surgical shoppers" vs. impulse shoppers.   And while mission shoppers were almost always men women are now adopting this practice.

Cinemas should pay close attention to the so-called conversion rate (the percentage of people that actually buy concession after walking into the cinema). As Americans make fewer trips to the cinema, each moviegoer becomes more valuable and coaxing them to buy more concession becomes more crucial. 

12 foot WebTV

Currently, because of the d-cinema conversion and the recession many cinema operators stopped refurbishing, hired less staff, and posponed needed repairs and upgrades.  Now, because of the coming proliferation of content streaming and inevitable shrinking of the theatrical release window, cinemas are going to have to move quickly to improve the movie-going experience - with upgraded technology, and improved service and superior merchandising - to better engage their customers.

Cinemas have let the consumer get too far ahead of them and now they are going to have to scramble to fix that situation.  We have many prior posts to this blog recommending just that: installing pay-by-phone, adding wireless Internet networks, using smart phone technology to check inventories, having staff spend more time with moviegoers, going back to the use of  customer greeters, and on and on.  Its a return to old-world service but using high tech tools to do it.

My fear is that the cinema experience gets no better or becomes gimmicky while the in-home entertainment experience gets better and more immersive- accelerating the migration away from the cinema.

Best and Happy Movie Going
Jim Lavorato