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People Have A Limited Amount Of Disposable Income And A Limited Amount Of ...

People have a limited amount of disposable income and a limited amount of time which can be spent on entertainment. As such, cinemas are also competing with bars, sporting events, home cinemas, travel and restaurants. It is submitted that Gold Class cinemas would be a strong competitor in the general entertainment market at a niche level.

Competition Strengths

The main competitor for the proposed Gold Class cinema is the multiplex cinema in Shepherd's Bush. The multiplexes strength lies in its buying power and the cinema chain's ability to obtain the latest blockbusters at the earliest possible opportunity. Due to the multiplexes size, it has the flexibility to offer promotions and tie-ins beyond anything that a small cinema can offer.

In the broader sense, the cinema's other competition comes from the various restaurants and pubs found in the surrounding vicinity. However, they are not necessarily direct competitors and are not mutually exclusive unlike the multiplex (ie a person may go to Gold Class and then a pub, but they are unlikely to go to the multiplex and then Gold Class). That said, the fact that Gold Class will offer food and alcohol means that competition between the cinema and restaurants and pubs in the vicinity will increase.

Competition Weaknesses

The multiplexes main weakness is that it does not cater particularly well to the older market of cinema patron. Furthermore, at present it does not offer a Gold Class experience and due to its business model of trying to fill large cinemas, it is unlikely that it would move towards a model which relied on creating smaller, more intimate cinemas.
Likewise, it is difficult to imagine restaurants and pubs being able to compete directly with a cinema. They both offer sufficiently different experiences to customers and it is more difficult for restaurants and pubs to add on a movie-like equivalent than it is for a cinema to offer food and alcohol.

Development and Production

Sales and Marketing

Unique selling point

At present cinemas in the UK do not offer a dedicated Gold Class or VIP cinema going experience. In cases in which such an offering has been tried in the UK, for example, the UGC chain, the idea has met with problems due to the fact that a single cinema isn't dedicated to the Gold Class experience, rather, premium seating is attached to the back section of a standard cinema. In this case, the intention is for the West London cinema to have three cinema screens dedicated for premium customers.

The prospective owners recognise the demographic shift in the area around the cinema. With house prices steadily rising, the area around Hammersmith has transformed into a hub for city working people with large amounts of disposable income. This change has been mirrored in the types of new shops and eateries opening up to cater to them. These new residents are willing to spend money for a premium and individual experience.