FIndings of an industry workshop into how to build cinema audiences. Commissioned by UK cinema body Cinema First. This research appears on leading media audience site www.sampomedia.com, which is gathering feedback from anyone interested in the field.

1. CINEMA FIRST
INDUSTRY WORKSHOP
MAY 2012
BAFTA, LONDON
SUMMARY NOTES

2. OUR OBJECTIVE FOR TODAY
• …is not to arrive at any answers
• It is to explore as a group whether there is value in shared thinking,
learning and exploration about how to profitably increase cinema
admissions
• And where that value might lie
• We are not looking in this session for commitment to shared action

3. If something is going to be better, it is new, and if
it’s new you are confronting problems and
challenges you don’t have references for.
To solve and address those requires a
remarkable focus. There’s a sense of being
inquisitive and optimistic, and you don’t see
those in combination
very often
Jonathan Ive

4. A SUGGESTED MINDSET FOR TODAY:
Can If
vs.
Can‟t because

5. CINEMA AT A
CROSSROADS

6. Our Objectives for today
• To explore as a group whether there is value in
collectively thinking about how to increase
cinema admissions
• Where that value might lie
• Help frame the future strategy of Cinema First

7. Today’s session
Cos
Where are we at? Some numbers

8. UK Film Revenues
Million 2004 2005 2006 2007 2008 2009 2010 2011
£
Cinema 769 776 762 821 854 943 1006 1080
Home 2953 2708 2559 2644 2628 2386 2325 2180
Ent
VOD 0 0 0.20 0.8 7.7 24.8 45.2 59.6
Total 3722 3484 3321 3465 3490 3354 3376 3320
Again a decline in overall value of circa 10%

9. Cinema Admissions
Million 2004 2005 2006 2007 2008 2009 2010 2011
West. 948 852 875 858 862 915 814 890
Europe
North 1,484 1,376 1,395 1,401 1,356 1,418 1,341 1,261
America
World 7,415 7,365 7,689 7,064 7,103 6,951 6,834 6,674
741 million visits lost since 2004 – 10% decline world wide

10. UK Admissions
Million 2004 2005 2006 2007 2008 2009 2010 2011
UK 171 164 156 162 164 173 169 171
Despite large investments admissions are flat-lining.

11. But more films are being made then
ever
Number of 2002 2010
films
produced
Europe 1102 1508
World 3792 5543
Over supply of films into a declining market place

12. Some conclusions
Total value of film is in decline.
The value of cinema as a % of the value chain is
increasing. By 2014 it will be equal with all
home entertainment in Europe. (At
approximately $10 billion each)
Cinema admissions world wide are at best level
and maybe in gentle decline.

13. Where do we stand?
Wondering…?.

14. Crises
Can we see it coming? When do we act?

15. Things change quickly

16. PETER: CINEMA AT A CROSSROADS
• Pressure for change
• £7bn 2004  £8.4bn 2011
• Decline in gross revenue
• Larger in US than UK
• Admissions also declining
• Generally, not an increasing market
• Despite large investment
• Yet, an increasing number of films being produced each
year
• Total value of film is in decline (including home
entertainment)

17. DISCUSSION

18. DISCUSSION
• How do we know if we are in a crisis? Can we see it coming?
• Things change very quickly
• Need to respond to early indicators
• E.g. NY headlines
• £200m invested in digital in last 18 months – haven‟t yet seen
return
• We‟re fishing from the same pond
• Need to drive organic growth
• Saturation point with increasing prices (yet can‟t compromise
theatre experience)
• We are reactionary – need to be forward-thinking
• E.g. Avatar 3D (2010) - „flavour of the month‟ one moment, the
next 3D was receiving bad press
• Older audience

19. DISCUSSION
• How engaged are the youth?
• E.g. Gaming is huge among teens
• This should ring alarm bells for us
• Disappointment around the films
• Off-putting for future films
• What films belong in cinema?
• Need to be „choiceful‟
• Opportunity with digital
• Getting young people in the habit
• Volume of films is misleading: same number of big films released, but
getting „bigger‟
• Many small films getting lost. Should we include breadth?
• Making the experience bigger than the film

20. DISCUSSION
• Demographic is constantly changing, e.g. ageing population
• Opportunity with niche audiences
• There are many solutions – not just „one size fits all‟
• Different challenges per group
• Orange Wednesdays – wanted to broaden choice, but this didn‟t
• We weren‟t aligned with Orange
• Cinema-going competing with other lifestyle activities
• Time free for teens changes across the year (e.g. Exams, school
holidays, etc)
• Consumption is huge (e.g. using different technology simultaneously)
• Other pressures
• Different groups within teens
• Membership – you can gamble on a risky film without the same
disappointment of having paid full price for a ticket

21. DISCUSSION
• Frequency
• Look to other countries with high frequency
• Loyalty card
• Experience
• Games industry – a distraction for us?
• More people NOT going, than going
• Need to target these people (organic growth)
• We need to agree on the issue
• Targeting frequency and demographic
• Need more strategic data – esp. on those going vs. not going
• Value for experience
• Need to invest in brilliant basics
• Need to share data

22. DISCUSSION
• Gaming + TV have evolved hugely over the past few years – community,
internet streaming, etc
• Cinema hasn‟t...
• Standards + expectations have grown
• Investment is often just to keep infrastructure updated to „standard‟
• Films that appeal to different audiences – not just youth
• Quality vs. volume
• Disconnect between production + exhibitors/ distributors
• Need to bring them together
• (Although can‟t blame this disconnect entirely, as production +
distribution are often the same)
• Industry model
• Public funding
• Updating our business practices – changing how we work as an industry

23. DISCUSSION
• Single vision – harness energy for desire to change
• Research the types of people going to the big hits (and not other films)
• Encourage second viewing by utilising e-mail databases, for example
• 3D receiving negative press – we need a consistent story to back it
• Communicate overall “Isn‟t cinema great?” story
• Quality of experience
• Admissions – heavy cinema goers would see all if they had time
• Therefore there is more potential in those going every so often...
• Make a night of it – could see two films for less, for example
• Green Witch campaign grew admissions
• Which marketing works?
• Need to experiment

24. ARE THERE GOOD REASONS TO LOOK AT
HOW TO INCREASE ADMISSIONS?
YES NO

25. DISCUSSION
• Need to agree our compelling case
• Customer journey
• Or about looking after current consumers?
• Technology  cinema more than just seeing films
• Especially pertinent re: access (outside London)
• Population growing – yet admissions static
• Value in a shared approach

26. OVERALL

27. DISTRIBUTORS

28. EXHIBITORS

29. Area Specific comments
Improve/ create great We‟re in the experience economy
consumer experience From selling the tickets to delivery of the film
Vs other competitive activities (future proofing)
Selling customer experience, in context of competitors (external
competition and other channels of film watching)
Deliver basics brilliantly (experience) each time or money back
Redesign cinema experience around best of hospitality business
Perception vs. Reality
Youth customer experience
Better Understanding Better Understanding of consumers expectations (already done?)
of consumers Understanding our audience and creating a common language for all
to use
Better understanding our consumer – why are they watching
elsewhere?
What irritates them, and how do we get around that?
Understanding consumers‟ needs
Proper segmentation around usage, and fit within contemporary media
landscape
Routinely measure key drivers of satisfaction/ dissatisfaction vs other
alternatives.... quarterly U&A?

30. Area Specific comments
Target particular a) Youth
audiences Developing a diverse film watching habit while young
Make cinemas more welcoming to young
b) Older
Older – filling screens weekdays
Supporting each other in connecting with older group and bringing them
back more often
Community Use screens to help out local schools
Invite participation and contribution to what‟s showing when

31. Area Specific comments
Focused/ Proper Current promotional model past its sell-by date: need proper marketing
marketing and today
communication Building and utilising consumer databases
Deliver integrated Marketing Plan celebrating virtues and value of
cinema
Major campaign, broadly supported about cinema being the best place
to experience film
Working together to deliver end to end CRM
Better CRM – Amazon „like‟ recommendations
Direct local marketing support
Ease/ choice/ Make purchasing and booking of tickets easy/ spontaneous
flexibility New distribution for impulse buys
Provide consumers with greater choice, on their terms
Creating demand for choice and flex as well as delivering it
Improve access and choice, esp outside South East
Offer choice of product
Innovation and Isolate lowest cinema-going region and prototype radical ideas to boost
protoyping admissions
Innovation for youth
Paperless ticketing

32. Area Specific comments
Other Broadening the perceived offering
Converting consumer demand at its peak
Prototyped ideas
Lapsed consumers/ reappraisal
Communicate that cinema offers good VFM vs competition
Increase social nature of cinema-going: group benefits + social media
Promote as if „no release window‟
Focus on potential or infrequent users, not cognoscenti
Filmcard for young people
Communicate range of product more clearly
Find out what‟s not working, and have a positive attitude to dealing with it
Create high level industry forums to discuss key issues
Link with book clubs to offer deals on upcoming films

33. WORDLES: BUILDS
• Customer experience
• May be based on previous experiences – we need consistency
• Tailored to suit each individual
• Who is talking to the audience?
• Lots of different dialogues
• Make it personal – twitter conversations, not databases
• Distributors + exhibitors to work more closely to share knowledge and
come up with new ideas
• Growing the market is very important as costs/ etc are increasing
• Availability of alternative content – digital
• Non-film content
• Innovative with my relationship with the consumer
• Shared learnings – e.g. Teen screen

34. AGREEMENTS FROM
THIS MORNING

35. SUMMARY OF SUCCESS/FAILURE FACTORS
Pressure for
Change + A shared
vision +
Capacity to
change +
Realistic
workplan = Success
+ A shared
vision +
Capacity to
change +
Realistic
workplan = Slow death
Pressure for
Change
+ + Capacity to
change +
Realistic
workplan = Anarchy
Pressure for
Change +
A shared
vision + +
Realistic
workplan = Nervous
breakdown
Pressure for
Change + A shared
vision + Capacity to
change + = Great hype
No results
Source: Michael Hay/ IKEA

36. AGREEMENTS FROM THIS MORNING
1. There are strong reasons to want to look at how to profitably increase
cinema admissions
2. There would be a value in formally articulating that case and prompting
the industry to address that issue
3. And then in sharing an approach to addressing it
4. The time is right, then, for Distributors and Exhibitors and Producers to
work together more closely on this in the UK than they have till now
5. It needs to start on clear foundations. Knowledge, not just data. In a
common language

37. AGREEMENTS FROM THIS MORNING
6. From this would need to emerge a common sense of what the issues and
their underlying causes really were
7. We are clear that there will not be „one size fits all‟ solutions
8. We have started to identify some key areas (like Experience) that might
then benefit from a shared understanding
9. As we move forward, there are useful learnings and stimuli to be gained
from other categories who have faced similar challenges and overcome
them
10. There would be real value for Cinema First in being a sharer of existing
data and knowledge, existing but not widely shared/ used, in addition to
helping originate new knowledge

38. BUILDS
• Profitability, including admissions
• Value chain  exhibitors, distributors, production
• Especially re: what the market wants
• Shared understanding
• Pressure for change must be clearly articulated
• Info sharing – what goal?
• Responding quickly
• Brand loyalty
• Tends to be actors – what about exhibitors?

39. AFTERNOON
EXERCISES

40. WHY ARE WE DOING THESE?
• We want to explore the potential for working together
• Clearly realistic about the degree to which we can really get to powerful
solutions in 30 minutes‟
• This next half hour is more about collectively getting a feel for how
productive we might be as an industry in collaboratively tackling different
opportunities around increasing cinema admissions
• ...Opportunities you yourselves have identified in your answers to our email
leading up to this day together

41. GROUP A: FIRM FOUNDATIONS

42. FIRM FOUNDATIONS
• This exercise is about establishing enough underlying rigour and
knowledge to give us all confidence that we would be tackling the right
issues, in the right order, with enough insight into the underlying causes
• What do we need to have more data on as an industry to allow us to be
sure we are tackling the right problem(s) and opportunities in boosting
overall admission figures?
• What more data needed to know tackling ?? problems?
• Understanding what a good + bad experience is, and track this
• Share all existing data and analysing it to increase knowledge
• Really analyse where best to put efforts in cinema going, e.g. Heavy
on light cinema goers
• Data on industry ?? Where from and trends? E.g. Warlord.
• What is the ideal consumer „state‟ over the year, and where are there
gaps?
• Team up with P&D + DCM as they are looking for consumer data
+ gaps
• Resource getting the data – like Tesco

43. FIRM FOUNDATIONS
2. Which of these kinds of data would it be useful for us to take a
collaborative approach to collecting, analysing and sharing?
• All of them
3. What might be the first three steps we wanted to consider in taking this
further?
• Talk to the sales houses re: other plans
• Do an industry ?? and collate and analyse it
• Commission some customer experience + tracking survey
(innovatively)

44. GROUP B: ENRICHING CINEMA-GOING AS A
CUSTOMER EXPERIENCE

45. ENRICHING CINEMA-GOING AS A
CUSTOMER EXPERIENCE
• Why might enriching the cinema-going experience help increase overall
admission figures?
• “All about the experience”
• Social, OOH, spectacle, competitive edge = market edge
• Competitors innovate – part of what people expect
• Positive – end-to-end
• Small things make a big difference
• Social – shared – enhances
• Q. How multiply enjoyment?
• Experience increases frequency – how to define what the experience
is
Retailer – compelled to innovate
• Danger = we get complacent
•  Command a premium

46. ENRICHING CINEMA-GOING AS A
CUSTOMER EXPERIENCE
• What kinds of experiential enrichment in particular might be particularly
powerful to help us do this?
• Before
• Ticket purchase
• Location – mall, out of town, high street
• How to ensure their activity is in-sync? Environment
cohesion, end-to-end
• During
• Social experience – before/ after
• How welcomed, how feel, remove irritation, paperless ticketing,
impulse-buying – other distribution points
• More personalised experience – booking online, understanding/
sharing the data
• Feed anticipation – encourage to tweet/ share. Buttons on way out
to share views
• After
• Customer service
• Ushers

47. ENRICHING CINEMA-GOING AS A
CUSTOMER EXPERIENCE
• Which other industries could we usefully learn from here?
• Social media experience – how learn from TV/ Twitter?
• Customer service/ hospitality – airlines, e.g. Virgin
• Experience
• Apple – staff empowered to take lead
• Hamley‟s
• Fast food – McDonald‟s re-branding
• Pret – staff engaged and friendly
• Online
• Amazon (and put customer first; present right choices, ask for
feedback)

48. ENRICHING CINEMA-GOING AS A
CUSTOMER EXPERIENCE
• Where might the benefit lie in taking a more collaborative approach as an
industry on this issue?
• Does improved experience enhance enjoyment of the film?
• Testing
• Learning from elsewhere stimulates as individuals
• Out of which comes possible collective innovations to test
• Learn about audiences and stakeholders
• Potential solutions – trial simple ideas

49. GROUP C: MAKE CINEMA GOING A MUCH
EASIER CUSTOMER EXPERIENCE

50. MAKE CINEMA GOING A MUCH EASIER
CUSTOMER EXPERIENCE
• Why might making the cinema-going experience an easier one from start to
finish help increase overall admission figures?
• Cinema as escapism – away from the drudgery
• Must be easier than competing offers
• What moments in particular during the customers cinema-going experience
might be particularly influential in helping us increase overall admissions?
• Booking – lack of a central booking hub
• Lack of lead-in time – “Buy it now” messages don‟t work. Reminders?
• Do you need to book to screen?
• A role for aggregators
• Lessons from airlines
• Impulse customers lost?

51. MAKE CINEMA GOING A MUCH EASIER
CUSTOMER EXPERIENCE
• In-cinema experience
• Queuing – lack of box offices
• Lessons to learn from Top Table, etc
• Theatre – maybe more relevant – less price-related
• Mobile ticketing – QR codes
• Staff training – Indies vs. circuits?
• B&Q – employing older staff
• Social experience = socially experienced
• Self check-outs
• Choice
• Often too limited
• Choice of seat? Can you change? Can you add?
• Negative lessons
• Live concerts
• Theatre

52. GROUP D: MAKE THE CINEMA THE
COMMUNITY HUB

53. MAKE THE CINEMA THE COMMUNITY HUB
• Why might making the local cinema more of a hub for the community
increase overall admission figures?
• Drive engagement/ share identity/ experience
• Drive goodwill/ positivity

54. MAKE THE CINEMA THE COMMUNITY HUB
• What ways in which we might do this might be particularly influential in
helping us increase overall admissions?
• Drive 2-way communications to improve
• Service the community in a way that suits the catchment: service,
price, choice
• Priority: time + effort into understanding
• Resource stuff
• Bottom up  top down
• Outreach „touch points‟
• Businesses – public + private
• Schools, libraries, clubs, sports, doctors – micro-environment
knowledge and comms

55. MAKE THE CINEMA THE COMMUNITY HUB
• PR/ coverage
• Transportation (20 mins)
• Competing activation
• Family groups/ clubs
• Create advocates
• Bars/ restaurants
• Social media
• Cost + benefit
• Volunteers?

56. MAKE THE CINEMA THE COMMUNITY HUB
• Which other industries could we usefully learn from here?
• Waitrose (ethical, charities)
• Majestic wine
• B&Q
• Where might the benefit lie in taking a more collaborative approach as an
industry on this issue?
• Distributors + exhibitors - test + learn + share

57. GROUP E: DEVELOPING CRM PROGRAMMES

58. DEVELOPING CRM PROGRAMMES
• Why might developing strong CRM programmes against specific types of
cinema goers help increase overall admission figures?
• Specific audiences – knowledge and recommendation
• Which consumer types might be particularly important, if we could influence
them in this way, in helping us increase overall admissions?
• Everyone!
• In particular: families, adults, students

59. DEVELOPING CRM PROGRAMMES
• Which other industries could we usefully learn from here?
• Retail: Amazon (recommendation)
• Music
• Tickets – e.g. SeeTickets, TicketMaster, Evention
• Songkick
• Insurance – Compare the Market
• Wine – Naked Wines (collective, community)
• Travel – Trip Advisor, Experia

60. DEVELOPING CRM PROGRAMMES
• Where might the benefit lie in taking a more collaborative approach as an
industry on this issue?
• Common knowledge/ language
• E.g. Film centre, audience types, film tagging
• Efficient use of funds
• All embody...
• All...
• BFI
• ...
• DCM iPad - ...
• ...
• BUA
• Investor trusts/ FDA/ ...

61. BUILDS
• Film-makers – exhibitors disconnect
• Strategic partnerships – being proactive to get more big films
• Catalyst for joining up
• Exhibitor: seat capacity no. 1
• Opportunity to show things other than film
• Community?
• Olympics opportunity
• Behavioural data in digital can be harnessed
• Many channels
• Community – could link a number of factors. Should not be used in
isolation.
• What is it that consumers „dig‟ in their cinema?
• Why do some sell out every show? What are they doing well that we
can borrow?
• Marketing, PR – keep it local

62. BUILDS
• Using relevant channels for the relevant audience
• Focus
• Convenience, ease – big potential, especially impulse buys
• More people would book online if it was easy
• Need to implement the entire journey – get rid of paper tickets!
• Reminders
• We need to communicate internally what we‟re doing first
• If we don‟t know, how will our customers know?
• Opening week – huge demand. We manage this well!
• Hotel industry – build image around the smart, big city locations.