A look at the experiences of theaters in Canada, Europe, Singapore, Thailand, India and Australia. (Part I of this two-part report examined effects of the economic downturn on giant screen theaters at three venues in the US.)
by Judith Rubin (October 14, 2009)
This summer, unusually cool weather was more of a damper on visitor numbers at the Montreal Science Centre and its 380-seat Telus IMAX Theater than was the recession, according to Julie LaRoche, director of sales, busi-ness and entertainment. Chilly, rainy conditions kept people away from the normally busy Old Port of Montreal during the evenings, and numbers at the theater were down from last year. “During the day my shows are sold out, ” said LaRoche in July, “and museum results have exceeded expectations, but after 7 p.m. it goes down.”
You don’t go to a rainy port for date night, and as a result, the schedule was curtailed: where last year they added an 11 p.m. screening on the busiest nights, this year the last show was at 9 p.m. Sundays through Wednesdays, and 10 p.m. Thursdays, Fridays, and Saturdays. The theater is showing U2 3D and Under the Sea 3D. “The 9 p.m. show of Under the Sea is not sold out either, ” notes LaRoche. In past years evening shows usually sold out until 11 pm.
“All the commerce around us is also suffering, ” says LaRoche. “More people are waiting until the last minute to buy tickets. What I have been seeing and hearing is that everybody is last-minute everywhere. The weather forecast changes and their plans change. The recession has hit in Montreal everywhere: hotels, the tourist industry, bouti-ques. People are being careful, but based on what we hear in the news, I don’t think it is affecting us so much as in American cities.” For her venue, strong daytime numbers, steady school group attendance, and healthy corporate event bookings have kept things going. It also helps that most of her usual clientele are locals and daytrippers. “There are fewer tourists coming to Montreal, ” says LaRoche, citing a 17% decrease in hotel occupancy in June, “but for us everything is going relatively well.”
Group sales were up, and LaRoche credited a marketing strategy that positions the venue well for bad-weather days. “We make sure that day camps know we can be ‘Plan B’ if it rains on a day they have scheduled a trip to an amusement park.”
LaRoche says that the Telus IMAX Theater, which opened in 1988, is the number-one attraction in the Old Port. It differentiates itself from the IMAX theater at the Cineplex Odeon downtown by emphasizing educational docu-mentaries over DMR. The science center, which opened in May 2000, is still building traffic, and LaRoche reports that it is drawing well with the current water-themed exhibition, Aqua.
Crossing over to Europe, we spoke with Euromax president Christian Scheidegger about what he has heard and observed in the industry, including the 424-seat 2D IMAX theater he manages at the Swiss Transport Museum in Lucerne. In general, he sees a decline in numbers at giant-screen theaters in Europe and cites a shortage of good films as the main culprit.
“There is a loss of visitors from year to year. Maybe once in a while with good films you can make it up a little bit, but the general tendency in decreasing visitor numbers is still there.” Scheidegger mentioned three prominent theaters all with IMAX Dome systems: L’Hemisferic, in the City of Arts and Sciences in Valencia, “got off to a hard start this year but was doing better by summer.” Another, the Omniversum in The Hague, Netherlands, was “keeping level or a little bit above last year, ” with a rotation of nine films including Sea Monsters, Van Gogh, Deep Sea, The Alps, and Everest. Cosmonova in Stockholm, Sweden, was “struggling a little bit” while showing Deep Sea, Grand Canyon Adventure, Fly Me to the Moon, and Sea Monsters.
At his own theater, numbers are up, largely due to the expanded programming made possible by the installations of a new Dolby Digital 3D projection system last November. The museum’s average yearly attendance has been about half a million, with the IMAX theater getting 300, 000–350, 000 visits. “We were 11% up against last year through the end of June, ” reports Scheidegger. “After introducing the new 3D system, it took a while until we saw an effect, but it led to a very strong rise in attendance in late March when we opened Wild Ocean. Now we have the potential to get more content than we have ever had in that theater.”
“For the first half of the year we had about 43% of the schedule in classic IMAX 2D documentaries and 57% in digital 3D documentaries, ” explains Scheidegger. “In May, we started another business in the evening, with regular cinema movies using the digital system.” To further build evening business, the facility, which is located on the shores of Lake Lucerne, opened a new restaurant and bar, so that visitors can make a night of it. In the first three weeks of July, evening screenings of Ice Age 3 in digital brought in 7% of the gross box office, with the theater op-erating at 96% capacity.
Scheidegger sees this as ensuring the future of his theater. “Ice Age has been huge. IMAX documentaries are still our core business during the day; they fit very well with the core audience of museum visitors. But there are simply not enough new giant-screen films of good quality to enable us to stay with the IMAX model exclusively. Dolby Digital is an open system, not proprietary. It gives us much more choice in what we do. We take care to differentiate in our marketing whether a film is in IMAX 2D or digital 3D. The IMAX film presentation and the digital presenta-tion are both about immersiveness. Our screen is 25 meters wide and 19 meters high (82 by 52 feet). Of that 25 me-ters, the digital picture is 24 meters (79 feet) wide and about 12 to13 meters (39 to 42 feet) high.”
He adds, “I think 3D is very important. In Switzerland there are about 25 3D screens for the whole country, out of a total of about 500 screens. Those 25 screens that are 3D for a particular film are responsible for 50% of the box office of the whole country. There are people in our community trying to do 3D digital on the dome now. It’s a huge challenge. And there are many questions. How long will 3D be a portion of the cinema business? How quickly will people adapt to it? Will there be enough 3D films in the future even for regular cinema? Will more theaters go 3D and will this lead to more 3D films? Will there be 3D TV sets at home as well?”
The museum has also embraced digital technology in its planetarium, which features a Sky-Skan SkyVision full-dome system coupled with a Zeiss opto-mechanical starball.
The recession and the swine flu are both affecting tourism in Switzerland, Scheidegger reports. About 10–15% of visitors at the Swiss Museum of Transport are tourists. “One positive effect of the recession is that many Swiss didn’t go abroad for the holidays, and our institution provided an inexpensive leisure option. We have to wait and see how the autumn goes. What could be a problem in the future is that the flu has reached Lucerne and might be-come a bigger threat if a large percentage of the Swiss population is affected.”
Another cause for concern is that funding sources are starting to dry up. “Sponsorship is important to create new exhibitions and fund marketing. When we launch films, it is getting tougher to obtain sponsorship money, and that will eventually affect attendance numbers. I don’t know if we have yet seen the worst.”
Dr. Chew Tuan Chiong, is director of the Singapore Science Center, which has a 276-seat IMAX Dome theater. He noted that Singapore’s economy is heavily globalized, and therefore has been more affected by the economic downturn than its neighbors. Even after government stimulus spending, Singapore’s economy has contracted by several percentage points.
But he adds, “The effect on the Singapore Science Center’s business is less obvious.” The fiscal year from April 2008 to March 2009 saw record attendance, and the period since April is just as strong, buoyed by an exhibition entitled Da Vinci: The Genius. “The IMAX theater, which strongly depends on the basic science center traffic, ma-naged to stay on an even keel, dipping only slightly in June, but that was clearly because of the threat of the H1N1 bug, ” which caused schools to suspend all field trips. The theater is currently showing Bears, Space Station, Van Gogh, and Sea Monsters.
Chew says, “I believe the main reason for visitor numbers staying up was because of the key blockbuster exhibi-tions. The decline in foreign tourists was compensated by locals who chose not to travel, or traveled less, for their holidays. The expenditure per customer was also not adversely affected. For the IMAX theater, the visitor break-down is about 70% locals and 30% tourists.”
For the last five years, the IMAX dome has just about broken even or generated a small surplus. The center re-cently added digital 3D projection capability to its 500-seat multi-purpose auditorium. Chew says he sees the IMAX theater “as an asset of medium importance that helps enhance the attractiveness and branding of the overall com-plex.” So a new giant-screen theater is included in plans being developed for a revamped science center, but so are other theater formats.
In response to the economic situation, the Singapore Science Center is being more careful in its discretionary spending, and is working more closely with its partners, such as the national television corporation, whose support for the Da Vinci exhibit Chew credits for much of its success. But he notes, “There is this strange, almost surreal sense of ‘business as usual’ despite major events taking place in the financial markets and other parts of the econo-my. Being essentially in the educational sector is a strong stabilizing force in this climate.”
He has seen a weekday boost in the number of parents, especially fathers. Chew believes this is “a result of some industry sectors practicing shortened work weeks, and in some cases, voluntary short term no-pay leave.” Unlike the U.S., Singapore’s unemployment rate has not risen, because of government measures to keep people employed.
About the future, Chew says, “The economy appears to be picking up, especially with the impending opening of two big integrated resorts that will draw tourists to the country. For my institution, we are relieved to have come through relatively unscathed so far, and are looking forward to sunny days ahead.”
Thailand & India
Jim Patterson is a giant-screen veteran who has opened several IMAX theaters in Asia in his two decades in the business. He is the director of the Krungsri IMAX Theater in Bangkok, Thailand, and the Aeren R IMAX Theatre in Kolkata, India. Both are commercial GT 3D theaters with more than 400 seats.
About the general economic conditions, Patterson says, “Thailand has been one of the harder hit countries. Low exports, big drops in tourism, and flu concerns have contributed to about a 20% decline in [conventional] cinema attendance. Our IMAX theater, however, is up 30% this year over last and about 50% over two years ago.” He cre-dits this success to “an extensive sponsorship and promotion program that grows without corresponding growth in costs. Therefore we have not had to cut back on promotions. Still, sponsorship is noticeably more difficult to get, as are screen ads.”
He has recently renegotiated the theater’s naming agreement with Krungsri, a leading Thai bank, and although the overall deal was lower than previous rounds, “they still extended for three years at about US$350, 000 per year for the cash portion.”
The IMAX theater is performing better than the conventional screens in the multiplex. “IMAX is 29% up and 35mm is down 20.4% over last year.” He tried something new with the IMAX edition of Transformers: Revenge of the Fallen — running shows at 2:00 a.m. — and sold about 100 tickets per show. He believes most of these customers were “in the night entertainment business coming after they got off work.”
Patterson believes the economic challenges have honed his business practices in Bangkok. “We were well posi-tioned, but we have sought more school groups and group sales, for example. One interesting tactic that we have been using is getting third parties to do promotions with us. In this tough economy, it is a better alternative for them to promote at low cost via the IMAX and other entertainment channels.”
The economic conditions in India, where Patterson opened the Kolkata theater in January, are not as dire as in Thailand. India’s GDP growth rate has fallen to about 7%, which most countries would consider excellent. He says, “It shows that a downturn is relative. The Indian reporters and business people talk continually about the economy and tough times.” He notes that because of dramatic reductions in marketing expenditures, the price of billboards in Kolkata has fallen 80% in the past six months.
As far as the IMAX theater is concerned, he says, “In India many moviegoers only want Bollywood films, so we must actively build up awareness and loyalty through multiple promotions, PR, our Web site, other Web Sites, and an IMAX Club that we formed.”
The Kolkata theater is in a new, medium-size mall with three conventional cinemas. Patterson says the IMAX is doing relatively well, but many of the mall’s tenants are finding it hard to pay rents they agreed to in better times, and some have failed. “So far the mall owner has remained fixed, but time will tell if the economy will support the rents or not.”
He has faced unusual challenges in the area of sponsorship. “Over the years, I have usually been quite successful at getting sponsorship and support for theaters I open. In this case, sponsorship had to be put on hold [because] many potential promoters wanted to be paid to communicate offers to their customers, instead of paying us.” School groups have also proven elusive in this new market, partly because concern about the flu has resulted in a ban on field trips.
He adds, “Unlike the Bangkok IMAX, which has been open for several years, the Kolkata theater is going to have to invest over the next few years in building up a following in a price-sensitive market. The owners of the theater are real estate developers, so they are getting hit in a variety of ways by the economy. Funding a long-term marketing plan is gong to be challenging until sponsorship is found.”
But he concludes, “There are many positive signs in the huge Indian economy, so hopefully, as confidence re-turns, the situation will improve.”
The IMAX Theatre Melbourne is a 478-seat GT 3D theater located in the Melbourne Museum. General manager Richard Morrison explains that “although contained within the museum, the theater is run almost completely separately to the museum. We have our own independent cinema ticketing systems, marketing, operations, group sales and customer service staff. We are run purely as a commercial business, generating revenue for the museum.”
About the general economic conditions, Morrison says, “Australia has proven to be remarkably resilient to the global economic downturn. Reserve bank interest rate cuts and government stimulus package cash payments have kept consumer sentiment and outlook positive, and we are definitely on the way back up. Housing values were hardly affected and continue to climb in most regions.”
However, the picture at the IMAX theater is not as positive. “In January this year we fell a staggering 33% short of our admissions targets in what is supposed to be one of our busiest times of the year: the summer school holiday period. Consumers were sitting tight and being very discriminating with their entertainment money.” Although the theater booked two new films, the result was the worst for that holiday period in the theater’s 11 years. “Scary stuff, ” Morrison says.
School field trips and corporate bookings for the entire museum were heavily affected. The drops in both numbers and amount spent were mirrored industry-wide in Australia. Morrison says, “Sponsorship dollars were all but impossible to find, and a large Melbourne Museum touring exhibition failed to find anticipated sponsorship funding during this time.” However, he says that the Melbourne Aquarium reported strong admissions, thanks to a new multi-million-dollar exhibit on Antarctica which was accompanied by a major marketing campaign.
His organization responded with an expansion of the management team “to better resource the group sales, operations, and marketing/promotions aspects of the business.” Although he admits to being “a little nervous, ” he felt it was important “to keep the theater expanding in all relevant areas.”
A major impetus for this effort was the new IMAX digital theater that opened nearby in December 2008. Morri-son hired a branding company to develop a rebranding campaign “to differentiate our theater not only from the new digital IMAX, but also from other regular cinema screens that we compete with.” He feels the campaign worked and has been vital to the recent success of the theater. “We are midway through this rebranding and our latest investments revolve around a new Web site and generic advertising campaign, not tied to any particular film, rolling out between now and the end of 2009.” The theater is using the tagline, “World’s 3rd Largest IMAX Screen.” (The two largest are in Sydney and Poitiers, France.)
The theater is also increasing its use of new media and social media. “We pushed out a ‘Free Friend in Feb’ ticket offer that encouraged customers to subscribe to our online newsletter to receive a two-for-one ticket. We leapt head-long into social media marketing with Facebook and Twitter, and watched these areas of the business grow quickly. Communicating through Facebook and Twitter really gave us some personal contact with this demographic and let us find out what they thought of us and what they wanted. We’ve become real converts.”
Despite the slump in January, the theater set a record for the fiscal year ending in June. Admissions and revenues exceeded expectations from February on, thanks largely to DMR titles, with help from some traditional IMAX 3D films.
Asked how the future looks, Morrison responds, “Very good… fingers crossed. The worst is well over here in Australia.”
First published in LF Examiner, fall 2009. (C) 2009 by Cinergetics, LLC.
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