Alternative
Content Market to Grow 150% by 2015
November
28, 2011 Source: Dodona Research
Consumers
worldwide spent $162 million in 2010 attending non-film events in cinemas, according
to a new report from analysts Dodona Research. More than half of this, $88 million,
was accounted for by a single market, the United States.
The report observes
that the business of showing events like opera, sports and rock concerts in cinemas
figured almost as an afterthought in the business plans of 'integrators' - the
firms which were set up to finance and execute the introduction of digital projection
technology in cinemas in place of 35mm opto-mechanical projectors, the internationally
accepted standard since 1909. To their core business of financing, installing
and maintaining digital projectors and delivering digital copies of films to them,
these firms often added ancillary businesses in screen advertising and distributing
so-called 'alternative content'.
Dodona regards a string of deals undertaken
by one of these companies, Cinedigm, as marking a decisive shift away from this
catch-all model towards greater specialisation and focus on the different needs
of these disparate activities. Cinedigm sold its screen advertising business to
Screenvision, its film delivery business to Technicolor, while it and Technicolor
pooled their alternative content activities, all in early 2011.
Pointing to
the currently small scale of the industry, and the tendency of alternative content
distributors to get involved in different types of product, often on an ad hoc
basis, Dodona argues that more focus and structure is exactly what this market
needs if it is to fulfil its potential.
The biggest success story so far
has, perhaps surprisingly, been opera, thanks to the commitment and energy with
which New York's Metropolitan Opera and its distributor, BY Experience, have approached
the market. Worried by its aging audience, the Met saw that distributing operas
to cinemas could be the key to broadening its audience for the future. In the
current, 2011-2012 season, it is distributing 11 operas to 1,600 cinemas in 54
countries in live and 'encore' performances which will be seen by more than three
million people.
With little money available for marketing compared to feature
films, and generally significantly higher ticket prices, alternative content relies
heavily on creating a sense of event. Live performances - previously impossible
using 35mm technology - have proved a key element in this. As the benefits of
live performances have been recognised and more and more cinemas been equipped
with satellite dishes, the share of live events in the United States has climbed
from a quarter in 2007 to more than half in 2010.
While a huge range of
content types have been shown, three main streams stand out as having established
themselves particularly quickly: opera and its cultural cousins, ballet and theatre;
sports; and popular music concerts. In the longer term it is likely that the broader
needs of rights owners will be important factors in the development of the market.
For cultural institutions which already sell out their performances, and where
there may be political pressure to make their cultural products more widely available,
broadening distribution through cinemas is a no-brainer. The music industry, however,
has yet to figure out exactly where cinemas might figure in its post Napster marketing
landscape; while sports can pose problems such as the preferred audience behaviour
of fans of some sports and scheduling.
Successful non-consumer areas include
business meeting and presentations (with big screens to show - and large foyers
to allow interaction with - new products, cinemas can be particularly suited to
launches); and, in the United States, worship services. No fewer than three million
Americans attended worship services in NCM Fathom-affiliated cinemas in 2010.
Business and worship events generated $28 million in revenue for US cinemas in
2010.
Dodona forecasts that the alternative content market as a whole will
reach a value of $400 million by 2015, 150% more than 2010's figure. Although
these figures exclude ancillary sales, notably from DVDs of events which, as in
the movie business, provide an additional revenue stream, the analysts note that
realistically the market remains tiny. According to report author, Melissa Keeping:
"the final shape of this industry won't become clear until it passes the
billion-dollar mark, but on the plus side, that's almost certainly coming before
the decade is out."
Alternative Content, available from www.dodona.co.uk
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