Where is Theatrical Exhibition Heading?

Despite the VOD/streaming revolution that has clearly gained steam during the Covid-19 pandemic period for obvious reasons, increasingly there are signs that theatrical exhibition is resurrecting itself from the pandemic’s ravages. Recent major studio releases like Eternals, Encanto, Venom: Let there be Carnage, No Time to Die, and Ghostbusters: Afterlife, among others, debuted as cinema-only releases, with more on the way, according to various studio calendars. In the wake of Covid and the fact that consumers now have a wealth of alternative options for viewing content in their homes, however, an examination of the strategies the cinema industry is using to bounce back is useful. According to Carl Rijsbrack, Chief Marketing Officer and Head of Digital Innovation for Cinionic, a global joint venture between cinema technology manufacturers Barco, CGS, and ALPD, the cinema world is currently showing “incredible resiliency” as it systematically attempts “to build the next wave of the industry.”

 He adds that such an agenda was very much a point of discussion at industry events that resumed in-person this year that Cinionic participated in, including CineEurope in Barcelona this past October and CinemaCon 2021 in Las Vegas last August.

 One thing Rijsbrack says he has been learning is that the pandemic-caused shutdown of cinemas ended up having one unintended, but useful, result— “the industry has used this time to come together on the side of building a future for the industry. It’s an industry that has always had the ability to re-invent itself, and I expect this time will be no different. The simple premise is that we have to offer [consumers] a safe, social out-of-home experience while enjoying great content that they cannot get anywhere else.”

 One positive, Rijsbrack suggests, is that production is back in full swing and that “there is literally an incredible amount of amazing content coming out of the studios—it’s almost overwhelming.” Secondly, he adds, the global cinema industry has done a solid job adhering to local safety protocols related to Covid and improving their safety equipment and methodologies. Indeed, in the United States, the National Association of Theater Owners (NATO), has offered the industry a set of protocols for safe returns to theaters in the form of its CinemaSafe initiative, and it monitors theatrical chains to see how well they comply with, or exceed, such protocols. The CinemaSafe site also indicates that all but three U.S. states were, at press-time, back to 100 percent occupancy for movie theaters.

 Thirdly, he emphasizes that much of the industry strategically used the down time during the height of the pandemic to begin or enhance a wide range of educational and training programs for their employees and the industry at large on all sorts of challenges the industry faces, and how to deal with them. Cinionic, for example, now routinely produces online videos on numerous topics for viewers to learn more about technology, protocols, industry trends, and more.

 “We changed the way we interact with the industry,” Rijsbrack says, referring to Cinionic’s various programs. “We spend a lot more time educating our people, training them, helping them to understand operational efficiencies and procedures both when they are open and when they are not open. Along with how to use new digital tools and remote-control technology, for example, and how to monitor and maintain and service their equipment in the best condition—things of that nature. There has also been lots of interaction on learning about new technologies to change how we do things going forward as we re-start, particularly remote capabilities for equipment and facilities.”

 Rijsbrack adds that he has seen “a big acceleration in the use of smart technology, the digital experience generally” for cinema operations and management. “The number of digital meetings, payments, equipment monitoring and control, remote interactions—it’s all been increasing recently. Certain areas like remote sensing of [equipment] status are things the industry is investing a lot of money in. Simple things like filter management and power consumption control with projectors on ‘eco mode,’ and things like that—these can all be done remotely now and save exhibitors money, time, and make the environment safer for everyone.”

 Probably the most important technological advancement Rijsbrack expects the industry to embrace more fully in coming years is the spread of new and improved laser projection technologies, not just for 3D presentations, but for virtually all presentations in cinemas.

 “For generations, the changing of lamps [in traditional cinema projectors] has required many hours and raised costs [in terms of overhead] significantly,” he points out. “Now, we have laser machines that dramatically reduce daily maintenance costs, with no decay and no flickering, and solid standards and safety protocols. That is a technology to help us all move forward. It saves on the total cost of ownership and saves energy, as well. Having equipment that lasts for years without needing to [change parts] and is brighter and greener in terms of power savings, I think that is a major step forward.

 “The great example is 3D, because laser has allowed [3D imagery] to be brighter and crisper and better quality than in the past. But we really see laser for all cinemas. At Cinionic, we have become an all-laser company, in fact—we have stopped supplying projectors with lamps. I think every segment in the market—normal cineplexes, small theaters, boutique theaters, drive-ins, and huge premium theaters—will eventually be all laser.”

In fact, among other developments, in late 2020, updated safety standards from the International Electrotechnical Commission (IEC) for all cinematic projection technology essentially brought the heightened safety demands that have been imposed on laser technology for some time to the world of lamp-based projection, as well. This suggests it is inevitable that, sooner or later, many major exhibition venues will need to enhance or replace their projection technology anyway, meaning increased proliferation of state-of-the-art laser projection tools is likely across the industry in coming years.

 But at the end of the day, Rijsbrack suggests that “a better viewing experience and more amenities, premium amenities” are what will be necessary to lure consumers to the next-generation version of the cinematic experience. He refers to the need for a combination of amenities that together make up “an ecosystem that works best if everything comes together” for movie theaters. “That means great technology, yes, like immersive sound systems and laser projection, but it also means improved seating, great food and drink, more offerings, and so on,” he says.

 Rijsbrack refers to the pursuit of such amenities as a “premiumization process” for the cinema industry. “The whole point is to differentiate for the movie-goer the cinema experience from everything else.”

 All of these factors, however, combined with current conditions and the fact that the pandemic is not yet behind us, mean that in cinema, as in many other areas, the notion of “returning to normal” still remains unlikely any time soon, if ever. Permanent changes of one type or another are here to stay. Major cinema chains are working hard to lure movie-goers back to their theaters as we speak, of course, and are using major advertising campaigns and state-of-the-art digital marketing techniques to restore interest, among other approaches. But Rijsbrack adds that a crucial evolution for the exhibition industry will come in the area of developing new business models to begin with.

 “Revenue streams changed all of a sudden,” he says. “They were getting ticket money, and now, there is less ticket money. So, you have to work with customers to understand what your new business model should be as you restart. One area where you will see new things happening is an area that comes from the software industry—the service business model and new financing approaches. Do I need to ‘own’ a machine, or can I just [subscribe] to a service that provides use of the machine, performing at its highest standards?”

 Related to the notion of new business models is the notion of new applications for movie theaters themselves. In particular, Rijsbrack sees an uptick in the private rental of movie theaters for small groups and organizations as a reliable, quality revenue stream.

 “Rent a theater for you and your bubble—people are experimenting with that,” he says. “Special screenings and settings only for you and your dedicated community, for example. People can keep their distance, be safe, and the industry can innovate with this idea.”

 Another new approach where Rijsbrack sees an uptick is in the resurrection of the concept of the drive-in theater. Pop-up and temporary drive-ins, of course, became popular during the pandemic, but Rijsbrack suggests more permanent drive-in facilities will be reopened and retrofitted, and some new ones could start taking the field, as well.

 “This idea is getting a lot of attention as an alternative for people who do not want to sit inside cinemas,” he says. “There are territories that are pouring resources into this idea. Of course, one of the big challenges with a drive-in application is that you have to shoot light a long distance—solid, constant, bright light. That is another area where laser projection could have an impact. We have already seen an increase in the adoption of lasers specifically for drive-in theaters.”

 Indeed, a 2020 Bloomberg article suggested that the summer of 2020—the height of the pandemic—took a big step forward in rejuvenating drive-ins, as several across the U.S. reopened after having closed in recent years. Such facilities, the article elaborates, have the potential to be both pandemic-safe, entertaining, and available for a wide range of applications beyond traditional movie-going. One drive-in in Texas, the article states, was used to live-stream a socially distanced wedding to an “audience” of some 85 automobiles, for example.

 In looking ahead for the exhibition industry, Rijsbrack emphasizes that no one can predict the future or unforeseen circumstances like the pandemic. However, he says current indicators like improved box-office numbers, reopened theaters at full capacity, the availability of reams of high-end content, and so on, suggest to him that “people are coming back. As we add in the newest technology, more immersiveness, more laser projectors, better seating, better food options, and all those things, I think we are in a setting now where many people will want to go out and try [returning to cinemas]. The big thing will be if the repeat numbers go up—if people will go, enjoy it, and come back again. If we prove we can do it safely and offer something they can’t get elsewhere, I’m confident the industry will have a good future.”