Today’s post is inspired by an article on CBC that reported that Cineplex lost $98.9-million in the second quarter, which represents a 90% decrease in revenue. To further the woes, the previously announced Cineworld takeover is now scrapped.
You may notice that I put a lot of emphasis on Cineplex, as they control the largest percentage of movie goers in Canada, as well as offer a competitive loyalty program called Scene Rewards.
We are a blog about rewarding Canadians, so Cineplex will get more attention than the other movie theatre companies. But this post is more generic which applies to movie theatres in general.
Short Term Horizon
Even though we are seeing movie theatres slowly reopening, there are so many factors working against them. They are unable to operate at full capacity. They cannot open everywhere. Demand for online streaming at home is going up (e.g. Netflix increasing subscribers).
I also suspect that many people are setting up a more comfortable home theatre setting (e.g. larger TV, built in speakers, more comfortable chairs, etc.).
In short (pun intended), movie theatres are probably fighting for survival at this point in time and depending on government subsidies (if they are receiving any).
For movie theatres to recover, not only do they need the lockdowns to be lifted, they also need exciting movies, which filming has slowed down as well.
I still think that there will be an eventual demand for people wanting to go to the theatres. Pre-pandemic, I hear lost of people complain about the high cost of going to the theatre, especially for drinks and popcorn, yet I’m sure you still see a lineup every time you want to buy popcorn.
Even time I see a lineup with people paying full price, I keep thinking, if no one lined up for popcorn, I’m sure they will decrease the price.
Either way, there is going to a lot of loss revenue to catch back up on.
Personally, I like going to the movies, as well as getting a drink and popcorn… yes… the whole experience. I either redeem my Scene points or Air Miles for movies passes (including drink and popcorn).
Even though the Air Miles redemption may not be the best value, that’s one of my small splurges that I am willing to do. I guess I am still old school, wherever I enjoy the whole movie experience. I just don’t like paying for it with my hard earned cash, but I am willing to redeem my rewards for it!
I am still uncomfortable to go to the movies, but I do anticipate to go back at some point in time.
What it means for Scene Rewards and going forward
Even though I cannot predict the future, I really do feel that people will eventually go back to the movies in person. After all, I cannot be the only one?
I think the biggest reason to go back to the movies is the overall “outing” experience that cannot be replicated by watching a movie at home, since that would not be an outing.
Furthermore, we are already seeing theatres offering incentives for movie goers to come back.
So the way I see it is, either their business will either pick back up naturally, or just like what’s happening with the airline industry, movie theatres will eventually increase their promotions if business does not pick back up.
Either way, I expect movie theatres to do what they can to recover. I don’t see them throwing in the towel prematurely.
What are you thoughts about going to the movies going forward? When will you feel comfortable going back to the theatres, if you do?