In 2014, PricewaterhouseCoopers released a report stating that video on-demand entertainment services will be the biggest revenue contributor to the American film industry by 2017, reaching $14 billion, $1.6 billion more than earned at the traditional theater box office. It’s good news for the film industry, but a major concern for theatric-focused movie studios with films taking the traditional route into theaters.
As we look back at 2015, theatric-focused film studios made money, thanks to box office record-breaking mega hits like Star Wars: The Force Awakens, and an increase in ticket prices. However, theater attendance was the third lowest in 20 years. In parallel, video on-demand services continued their rapid growth. In fact, video on-demand subscribers are predicted to reach 333 million by 2019.
The theater industry’s answer to this trend has been to boost the value of a movie ticket and the theater-going experience. Theaters are offering things like 3D and IMAX screenings, amenities like comfortable seating and greater dining options, but few can argue with the comfort of home.
And then there’s the price of a ticket.
Given the fact that consumers can subscribe to services like Netflix for as low as $8 per month for their family to enjoy, it’s hard to predict a future when a rise in the already $8.34 average domestic per person theater ticket price can be a viable, long-term solution for growing revenue.
While these quick fixes provided a temporary rebound from 2014’s dismal performance, there is little indication that these tactics will suffice. It’s clear that a more methodical understanding of the consumer and how to grow their desire to see first-run films in the theater versus waiting for them to come out on video, is needed.
How do you create this desire?
The easy answer might be to invest more in advertising and promotion to reach the masses, but that’s become less effective and more expensive due to audience fragmentation, compressed promotional windows and more. According to McKinsey, traditional advertising techniques will reach less than 1% of Millennials.
For today’s consumers, the only viable long-term solution is to leverage the power of online influencers to target niche audiences across every stage of the film development process. When you target online influencers, you are harnessing their ability to reach critical audiences and create conversation that's more likely than an advertisement to motivate consumers to buy a theater ticket.
Today’s consumers discover, trust and share information when delivered through credible peers and trusted networks, not through advertisements or even the news. When it comes to movies, this is amplified. In fact, according to Nielsen, 87 percent of Twitter users over the age of 13 said that Tweets influenced their movie choices and 60% often post comments about movies on their social networking sites.
How does one get started with engaging online influencers? We wrote a book on it, and I encourage you to download it.
In the meantime, I can only hope that the major film studios can catch-up and quickly embrace this fundamental but inevitable shift in how consumers discover films and share information about them. If they don’t, they risk doing what Netflix CEO, Reed Hastings stated in a 2011 blog post, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.”
To learn more about how VizSense is solving and simplifying the influencer marketing conundrum for today’s most visionary filmmakers, contact us. We invite you to learn more about how to discover, understand and engage influencers at VizSense's Influencer Tradecraft Workshop by registering here.
