Scent of money in new cinema tech
FOR the 1960 release of Scent of Mystery, US cinemas piped aromas including rose and tobacco smoke into their auditoriums at key moments to complement the film’s narrative. The stunt failed spectacularly. Audiences complained that the technology was out of sync with the action and the odours mixed together in unpleasant ways.
Five decades later and cinemas are still experimenting — scents included. But this time round, they are having more success and movie theatres are evolving at an unprecedented pace. New technology, from satellite-connected digital projectors to 3D and 4D cinema, is allowing them to provide a wider range of experiences to moviegoers than ever before.
Competition from TV, online piracy and the rise of services such as Netflix and Amazon Prime has increased the pressure on cinema operators to provide more than simply the latest Hollywood blockbuster on a big screen.
Says David Hancock, cinema analyst at IHS: “All aspects of the cinema experience and the cinema business are now open to change.”
For the world's biggest cinema operators — including Cineworld, Vue and Odeon & UCI — innovation is critical as box office revenues in mature markets such as the UK are stagnating. There were about 3,900 cinema screens in the UK by the end of 2013, representing growth of just 1%, according to the Cinema Exhibitors Association.
In a highly significant trend, almost all cinemas have in recent years replaced their traditional tools of 35mm film and mechanical projectors with digital technology. This allows exhibitors to screen any type of content imaginable — including live sport, concerts and opera. Broadcasts from the Metropolitan Opera, which this year screened its live performances in more than 2,000 cinemas across 67 countries, sold more than 2.4million tickets and highlights the rise of “event cinema”.
The income generated from such events can be substantial. In the UK, which has embraced event cinema more than any other European country, tickets to screenings of “alternative content” typically cost £15£20, three times the price of admittance to a standard film. The estimated gross revenue for all events in the UK was £12.5m in 2012.
Exhibitors are also boosting ticket prices by offering premium auditoriums with giant screens and more sophisticated sound systems.
The latest innovation is 4D, where the seats inside a movie theatre respond to the onscreen action. As well as moving and rumbling, the seats can spray water and emit bursts of air, allowing them to simulate effects such as a bullet whistling past your neck. Philip Bowcock, chief financial officer of Cineworld, says 4D technology is a niche proposition but an important one. “I’d love to say it’s a pleasant experience for a man of my age, but after about 15 minutes I’d had enough,” he says. “But the kids love it.”
CJ 4DPLEX, the South Korean company that created the so-called 4DX technology used by Cineworld, has installed the system in more than 100 theatres across 25 countries since it started five years ago. It expects to triple that figure to 300 by the end of 2015. But Hollywood blockbusters and sales of popcorn and Coca-Cola still account for the majority of cinema revenues and few people in the industry expect that to change anytime soon.
Thanks to digital technology, an industry that for decades has provided mass entertainment is starting to evolve into something more diverse.
Cineworld made its name building and buying multiplex cinemas across the UK.
But with growth slowing in its home market, over the past 18 months it has moved into smaller cinemas and emerging markets.
Cineworld plans to open 400 screens in central and eastern Europe over the next three years.
“There’s limited growth in western Europe," says Cineworld’s Bowcock,
But even in the UK, where it already controls about 27% of the film theatre market, Cineworld is still opening new cinemas. © 2014 The Financial Times Ltd.