Assignment Details:

Cinemas Saw 7% Dip in Attendance Last Year

Experts, operators cite factors like increasing ticket costs and rise of video streaming sites

Despite big blockbusters such as Star Wars: The Last Jedi and Thor: Ragnarok screening in cinemas here, fewer people went to the movies last year.

According to the latest figures from the Singapore Department of Statistics, cinema attendance in Singapore fell from 21.9 million in 2016 to 20.4 million last year, a 7 percent drop from the previous year.

Online video streaming sites such as Netflix – which arrived in Singapore in January 2016 – and the rising cost of movie tickets are among the factors that cinema operators and experts cited as possible factors contributing to this decline.

“This isn’t an entirely new phenomenon as we have seen fluctuations in cinema attendance numbers some years ago,” said a Golden Village (GV) spokesman. The most recent decline in cinema attendance before last year was in 2014, when it fell by about 2 per cent to 21.6 million from 22.1 million the year before.

The GV spokesman added that online streaming services, with their “low entry barriers”, “offer viewers a variety of content, ease of viewing (and) reduced cost”, and “circumvent age restrictions for rated content”, unlike in a cinema where age checks are enforced. But beyond video streaming sites, there could be other factors contributing to the current situation.

In a poll conducted by The Straits Times on its Twitter page last year, 11 percent of 1,500 respondents said that they preferred to watch movies on paid streaming services such as Netflix. But this was lower than the 32 percent of respondents who said that they preferred to watch movies in the cinema. Some 40 percent of respondents claimed that they would rather
stream the movies online for free.

The problem is exacerbated by the high classificationcation ratings imposed on several movie releases and the lackluster slate of movies released last year, the Golden Village spokesman added.

The relatively lower cost of online streaming sites, coupled with rising ticket prices, may also have led consumers to perceive movie ticket prices as “too expensive”, said Mr Gui Kai Chong, an instructor in media studies from the Department of Communications and New Media at the National University of Singapore’s (NUS) Faculty of Arts and Social Sciences.

A standard 2D film ticket at Golden Village cinemas costs between $8.50 and $9.50 from Mondays to Thursdays, and $13 on Fridays, weekends and public holidays. When Singapore’s first multiplex, Golden Village’s Yishun 10, opened in May 1992, a ticket cost just $5.

“The current generation of audiences may prefer the convenience of watching movies in the comfort of their own homes, rather than having to go through the hassle of watching them at a fixed location and at fixed times,” Mr Gui added.

In addition, watching television or film content on smaller screens is no longer considered a “significantly inferior” experience as audiences have become used to it, he said.

Associate Professor Leonard Lee, from the Department of Marketing at NUS Business School, believes that consumers have also substituted moviegoing with other forms of recreation, such as watching TV series like Korean dramas, engaging in social media, playing video games and shopping.

He suggested that cinema operators could introduce more attractive loyalty programmes to retain existing customers, including perks such as heavily discounted tickets for companions, as well as invitations to preview screenings and exclusive events.

Other methods could include improving the overall moviegoing experience by giving consumers free access to related online content for a limited time, such as behind-the-scenes shorts, books and interviews.

Golden Village said it has expanded the variety of screenings content and formats, including showing live concerts, and improving cinema hardware, such as using laser projectors at its newest cinema in Paya Lebar. Laser projectors provide a higher contrast and colour saturation, as well as clearer, crisper images compared with traditional digital projections, the spokesman said.

For movie buffs like Mr Nick Wang, 40, going to the cinema for selected movies still beats watching them at home any time.

“At the end of the day I still love visual effects on the big screen and you’re not watching it alone – it’s a heartfelt experience,” said the laboratory technician, who makes sure he catches the latest blockbusters and contemporary dramas in theatres every few months with friends.

Question 1
Assuming that you have been tasked by Golden Village to conduct a market research to determine if the company should continue to operate its cineplexes and the decision alternatives that it has, describe, with elaboration, the six (6) steps in the marketing research process.
(28 marks)

Question 2
Discuss the four (4) distinctive characteristics of services for a company like Golden Village and employ two (2) price adaptation strategies that could help Golden Village increase its cinema patronage.
(32 marks)