The Future Is Now: 6 Key Trends That Will Transform the Cinema Industry in 2023
By Julien Marcel, author of Hollywood Année Zéro and CEO of The Boxoffice Company
The cinema industry is constantly evolving with new technologies and changing consumer preferences shaping the way movies are made and watched.
As we look towards 2023, there are several key trends that are poised to have a significant impact on the industry. From the growing popularity of streaming services, to the increased focus on premiumization and sustainability, these trends will shape the future of the cinema industry and determine which companies and films succeed in the coming years. Whether you’re a film lover, industry professional, or just curious about the future of cinema, these are the trends to be looking out for:
TL;DR
- 2023 Will Reshape The Exhibition Market 🍿
- Distribution Will Have to Change Too 🎞️
- A greater focus on ‘Premiumization’ 🤩
- Reimagining Movie Ticket Pricing Strategies 🎟️
- Redefine the Addressable Market 🕹️
- The Sustainability Challenge 🌎
1. 2023 Will Reshape The Exhibition Market
The exhibition market has been forced to adapt following the events of 2020. Cineworld, the second-largest cinema chain in the world, filed for Chapter 11 bankruptcy protection in the US and has been working to find a solution. AMC, the world’s largest movie theater circuit, dodged bankruptcy by a slim margin thanks to investors and nearly acquired theaters from Cineworld. CGR, France’s second-largest exhibition chain, announced that it was up for sale, with the process currently underway. Vue International’s largest creditors converted the company’s debt into an ownership stake in the company. Additionally, the PVR Inox merger in India has been given the go-ahead. The market is in a state of flux and the outcome of these changes will greatly influence its future direction. 2023 will be a crucial year for determining the market’s trajectory.
It’s difficult to predict what the next moves will be, but it’s clear that investment funds will drive changes in the industry that will differ from those brought about by industrial consolidation or newcomers. The question on many industry insiders’ minds is whether companies like Amazon will follow in the footsteps of its Whole Foods acquisition with the purchase of movie theater circuits. And, while it may not be the most likely scenario, the end of the 1948 Paramount decrees resulting from the antitrust reviews under the Trump administration have cleared the path for the possibility of consolidation between studios and movie theater circuits. It’s worth keeping an eye on large companies in the coming months and years to see if they decide to make a move in this direction.
2. Distribution Will Have to Change Too
The distribution market has undergone a significant reshaping in recent years. 2020–2021 saw a period of experimentation with risky moves, like the “day and date” release strategy, which posed a potential threat to the exclusivity of theatrical releases. However, 2022 has opened up new perspectives with companies like Amazon and Netflix emerging as potential solutions to the industry’s challenges. 2023 will establish the role that key streamers intend to play: will Amazon confirm their commitment to invest a billion dollars a year for movies that would start on the big screen? Will Netflix follow this path? The challenge now is to rebuild moviegoing habits in a market potentially facing less studio content. This will require a greater diversity in the content being produced and distributed.
This is truer in some markets than others, of course. Note that in the U.S., the top 10 movies of 2022 represented 55% of its annual box office compared to 39% in 2019. Whereas in France, the top 10 films represented 25% of admissions last year, approximately the same amount as in 2019. We should keep an eye on the evolution of the French market, where Pathé has made big bets on films such as Asterix and two episodes of the Three Musketeers, as well as the Chinese market in what could be its first post-COVID year after having lost so much weight in the global market.
3. A Greater Focus on Premiumization
The success of films like Avatar has all but confirmed the public’s appetite for a true cinematic experience, especially in premium formats like Dolby, IMAX, Ice Theaters, 4DX, and ScreenX, all of which continue to outperform standard formats. The next step in this challenge is to move from a situation in which exhibitors are questioning how many premium screens they should have in a location to one in which every single seat is considered premium in some way, shape, or form.
This could involve offering more food and beverage options, comfortable seating, enhanced sound and visual experiences, and more to make the moviegoing experience even more irresistible for customers. The industry needs to adapt to this trend and find ways to provide a premium experience for all moviegoers, not just those who can afford expensive ticket prices.
4. Reimagining Movie Ticket Pricing Strategies
The question of movie ticket pricing and the need to innovate movie theaters’ pricing strategy has been a hot topic in recent years, especially during the crisis of the last few years. Comparing the evolution of ticket prices to inflation are rational objections to this question, but are often not sufficient to satisfy most journalists and consumers. And merely highlighting that films like Top Gun or Avatar drove the highest ticket prices last year is not enough to address the issue either.
The way movies are sold and advertised is also transforming as social platforms play an increasingly important role in the industry. Therefore, there’s a need to further iterate or even reimagine the way that tickets are sold with subscriptions models and, more importantly, online ticketing. COVID was the first to truly catalyze online ticketing in many markets, and its growing relevance has made it so that buying a ticket at the box office might soon be obsolete. Key players like Fandango, Moviepass, Atom Tickets, and The Boxoffice Company, are currently reinventing themselves to meet these evolving trends.
5. Redefine the Addressable Market
The moviegoing experience is currently at a crossroads of two markets: the movie business, which also has a growing home entertainment component, and the out-of-home leisure market. The movie industry has been experimenting with new ways to reach audiences, such as the Screening Room and PVOD, and it is likely that more projects will emerge in the near future.
On the other hand, the out-of-home leisure market is a rapidly growing but atomized market, in which movie theaters could serve as a consolidation platform. Some movie theaters have already spearheaded this initiative by adding premium dining, bowling alleys, laser tag, VR experiences, and arcade gaming to their businesses. By redefining the addressable market, the moviegoing experience has the potential to evolve in new and exciting ways.
6. Last But Not Least: The Sustainability Challenge
The cinema industry is facing a sustainability challenge as the effort to make a sustainable world becomes more urgent. There is also a geopolitical constraint that has created major tensions on energy markets, making energetic sobriety a key topic around the world. The awareness around sustainability varies from country to country, but it’s clear that this awareness is growing in more consumers who expect their favorite brands and venues to combine cents and sense, value for money and value for meaning.
The cinema industry must adapt to these challenges by embracing sustainable practices and meeting the expectations of a more environmentally conscious audience. This includes looking into energy-efficient technologies, reducing waste and carbon footprint, and promoting sustainable business practices. The moviegoing experience has always had the power to bring us together, and by making it a more environmentally responsible experience, it has the power to remind us that our planet’s sustenance, much like our industry’s, depends on how well we take care of it.
