With the latest Bond still delayed and Godzilla vs Kong forced to premiere on Amazon, cinema – and cinema advertising – has been decimated by the coronavirus. But as theaters around the globe tentatively prepare to reopen, can cinema advertising bounce back to ‘normal’ or will chains and brands alike be stung by a Covid-19 hangover?
Cinema’s appeal is so much broader than the film being projected on to the screen. The communal experience of shared viewing – regardless of the quality of the movie – is something that’s hard to replicate, for studios and brands alike.
It’s no wonder, then, that the cinema is consistently cited as one of the activities the public are most keen to return to after lockdown, ranking alongside holidays and seeing friends.
For cinema chains and the marketers that advertise around their tentpole releases, there’s no shortage of appetite from consumers to squish into a red seat with a big box of popcorn.
However, the pandemic’s freeze on releases – and thereby ad spend – will have long-lasting implications. So what can media planners, buyers and marketers expect cinema to look like as restrictions begin to ease?
The day after tomorrow
Unsurprisingly, UK cinema ad spend collapsed in 2020, down 80% compared on 2019.
Starcom’s head of AV, Bryony Lawler, says that few advertisers saw the value in spending on cinema over the past year: ”The only advertisers that have really been spending were those that already had bookings in and were happy to run them on the few occasions cinemas were open and in business.
”I imagine a lot of advertisers across the industry have either had their money refunded or are still sitting on money that they hope to activate again once the cinemas open.”
She states that even the big brands, such as automotive giants, have lain fallow over the past 12 months.
Indications are that while global cinema ad spend is set to return over the course of the next few years, it won’t return to 2019 levels until at least 2025. That’s despite some of the largest territories for box office revenue reopening, with APAC in particular accounting for nearly 78% of global box office revenue since August.
Sanchit Jain, technology and media analyst for Enders Analysis, says the year has been spent mitigating damage. Many titles, such as the latest James Bond instalment No Time to Die, were set for wide release and then postponed.
Others went to subscription video-on-demand (VOD) services, with Wonder Woman 1984 and The Woman in the Window among the movies that studios effectively cut their losses on to keep the pipeline clear for future releases.
All this means the amount of money studios have spent to market their own releases has sharply decreased, with efforts including the Doritos tie-up for WW84 and Heineken’s No Time to Die partnership leading to orphaned products as the release dates shifted.
These anticlimaxes, coupled with the reality that much of a release’s financial success is tied to its opening weekend, means studios have a big incentive to shift back to wide theatrical releases as soon as possible. Advertisers too are keen to see a return to huge opens as they cannot usually gain a big enough foothold on VOD platforms.
The relative success of outdoor cinema – even in the UK, which traditionally doesn’t have a culture of drive-ins – is also indicative of a pent-up desire for wide theatrical releases among audiences and distributors. That is in part behind Digital Cinema Media’s (DCM) advertising partnership with outdoor cinema company Hideaway Cinema.
Karen Stacy, DCM’s chief executive of cinema sales house, argues that the commercial success of Godzilla vs Kong will hasten any return to ”normality”.
“This is evident from the bounce back we have seen from the global box office as cinemas have been reopening in other markets. Godzilla vs Kong has topped $300m worldwide in two weeks. This stacks up extremely well against its pre-pandemic predecessor Godzilla: King of the Monsters and is on track to surpass its $387m worldwide total next week.”
Return of the king
For his part, Jain believes that one of the biggest pandemic aftershocks for cinema and the brands that prop it up may come from a lack of supply, rather than demand.
While AMC got an unexpected bailout from traders on Reddit, other franchises such as Cineworld have weathered losses in the billions due to lockdown. Some chains have ceased to exist entirely. Jain asserts that forecasts about audiences quickly returning to theatres are based on self-reported surveys and that the closure of high street retail chains will negatively impact cinemas in town centers, meaning many closures.
There has been much buzz about a transition to digital-first releases, driven by Warner Brothers among others moving entire 2021 slates to streaming services. Netflix too has spent vast amounts to acquire first streaming rights. PWC also forecasts that 2020 would be the year in which VOD revenue outpaced cinema revenue.
Despite this, analysts tell The Drum this is unlikely to outlast the pandemic. As highlighted above, the financial incentives still favor wide theatrical releases.
What might change, however, is the length of time between theatrical and VOD releases, which could shorten from around nine weeks to five or six.
Kathryn Jacob, the chief executive of Pearl & Dean, says: “The shortening of the windows to 45 days or 60 days is much more cognizant of the fact that most films take 80% of their box office in the first three weeks.”
Similarly, Lawler believes that far from cannibalizing cinema audiences, audiences that choose to watch on VOD first are additive for the advertising industry.
Additionally, only the largest creators that also own distribution channels can benefit from digital-first distribution, with much of the supposed success of even Disney’s Mulan remake predicated on it having driven subscribers to Disney+ rather than being a commercial success in its own right.
Instead, it’s likely that VOD has enabled a bifurcation of cinematic content creation, from the huge tentpole releases that will continue to sustain cinema chains to the new brand of straight-to-VOD releases from Blumhouse and Randall Emmett.
For audiences, the strength of cinema and cinema advertising lies in an irreplicable communal experience. While Netflix and Amazon have experimented with shared viewing options digitally, audiences are still hungry for those in-theatre experiences.
There are issues around supply and individual films’ releases in the short-term, but the medium of cinema looks set to build itself back to health over the next few years.