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Most Of This Revenue Growth Was In The Multiplex Part Of The Market Where It ...

Most of this revenue growth was in the multiplex part of the market where it was noted that the four leading cinema groups had been able to raise their prices even in the face of declining DVD prices. This shows that demand for the cinema experience is more than just the watching of a movie and that a market does potentially exist which the larger multiplexes fail to cater for and that can be exploited by the more agile, smaller cinemas.

Future Industry Developments

The increase in other entertainment options, for instance computer games, pubs, home cinemas and the ever shrinking window between the release of a movie in the cinema and then onto DVD means that the future of the cinema industry is uncertain. The trend towards consolidation will no doubt continue, but it is interesting to note that the number of multiplexes opening has plateaued, with an average of 25 a year opening between 1998 and 2002, only 6 were opened in 2004. This perhaps signals that the multiplex market has reached its full potential and that the marketplace is stabilising.

However, the stabilisation of the market at the top end does not as yet seem to have filtered down to the smaller cinemas and as such, many continue having trouble turning a profit. It is the owners' belief that the current market is ideal for the development of a new concept which gives movie patrons an entirely unique cinema experience Gold Class.

Market Analysis

The four possible ways in which the market can be defined are: multiplex cinemas; all cinemas; all ways of watching films (including cinemas, DVDs and pay-television); and all ways of using discretionary spend (including films, going to pubs, clubs or other ways of spending time and money in or out of the home).
As noted above, it is the prospective owners' view that cinemas can no longer focus on the narrow definition of the market. Some guidance can be taken from the multiplexes which offer patrons an experience. Often these cinemas are attached to shopping centres and as such going to the cinema is simply part of a persons shopping day. Multiplexes, like the shopping centres to which they are appended, rely on the principle that if something is large and loud, no one will dare to think that it is anything but the best and it must be said that they do this well. Teenagers are particularly impressed by this logic.
However, to the same extent that teenagers are drawn to large and loud multiplexes, older patrons are repelled by them.

Market Segmentation

Cinema patrons generally fall within the 15-24 year age group with over 53% of people surveyed in this age group having attended the cinema once a month or more. This declines within the 25-34 year old age group to 34% and further within the 35+ age group to 16%.