When I read about IMAX Theatres at 20th Century Plaza being raided by auctioneers, I was disheartened.
It’s always hard to imagine and experience the blow, from a job and business loss perspective at least.
Clearly, the ban on social gatherings has taken its toll on the business. Research estimates Sh250 million as lost revenues in the past for months – almost two-thirds of what was made in the previous year.
But that said, even without the harsh effects of Covid-19, the theatrical side of the movie business has for a while been the “sick man of the industry”.
Its short and long-term relevance has remained questionable. And the Motion Pictures Association (MPA) 2019 Report testifies to this.
Take for instance, since 2015, the report shows that while the global theatrical market (box office) increased by eight percent, the home/mobile entertainment market (content released digitally and on disc) increased by a whopping 62 percent.
It further highlights that while the theatrical market accounted for 42 percent of the combined theatrical and home/mobile entrainment market last year, it is still a climb down from 51 percent recorded in 2015.
Currently, the digital market commands the biggest chunk at 48 percent. This simply means that as the industry topped new highs with over Sh10 trillion (Sh3 trillion excluding US/Canada) in global revenues last year, movie theatres got a smaller share percentage wise compared to previous years.
In the same report, the future was made apparent—it is streaming.
Though once only a small part of the industry, streaming is now without doubt an increasingly large part of the industry’s bright future.
The number of subscriptions to online video services, such as Netflix and Amazon Prime, around the world increased to 863.9 million last year - a 28 percent increase from the previous year.
Besides, as the global home/mobile entertainment market (content released digitally and on disc) reached Sh6 trillion last year - a 14 percent increase compared to 2018 – the change was notably driven by the digital market [video-on-demand (VOD) and subscription streaming].
This trend is getting by another sub-trend; frequent moviegoers, who are generally young people, now tend to own more key technology products (computers, smartphones, disc players, tablets, video-streaming devices and video game systems) than the general population of adults.
MPA shows that nearly three-quarters of all frequent moviegoers (73 percent) own at least four different types of key technology products, compared to 58 percent of the total adult population.
In the US for example, about 85 percent of children and more than 55 percent of adults watch movies and/or TV shows on their mobile device.
There’s no doubt the consumption of entertainment content is slowly shifting to the on-the-go mode. On the contrary, global total cinema screens increased only by seven percent last year to reach past 200,000. In Kenya, there are an estimated 30 screens only, mostly spread across the major cities.
So, while cinemas in the country and around the world slowly begin to reopen after months of coronavirus lockdown, a big question remains over the film industry: Will movie theatres survive the ongoing changes?
I think not. MPA reports have made it clear: The future is streaming. That’s the bad news for the theatres.
Mr Mwanyasi is the managing director of Canaan Capital