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Sun 6 Sep 2020 01:00 PM

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Cinemas are not in competition with Netflix, says MAF Entertainments CEO

Streaming services have seen subscriber numbers surge as a result of coronavirus-enforced lockdowns

Cinemas are not in competition with Netflix, says MAF Entertainments CEO

Venues in the UAE, Saudi Arabia, Egypt and Qatar are all welcoming movie goers back, albeit at restricted capacity, with hopes that sites in Kuwait, Bahrain and Oman will follow suit in the next month.

Cinemas can survive the streaming service boom that coronavirus has given the likes of Netflix, as audiences finally return to movie theatres to enjoy the big screen experience.

Cameron Mitchell, CEO of Majid Al Futtaim Cinema Entertainment Leisure, revealed that occupancy levels in its VOX Cinemas - the biggest exhibition chain in the Middle East operating some 550 screens across the region – is currently around 10–15 percent following a period of closure as part of measures aimed at curbing the spread of Covid-19.

Venues in the UAE, Saudi Arabia, Egypt and Qatar are all welcoming movie goers back, albeit at restricted capacity, with hopes that sites in Kuwait, Bahrain and Oman will follow suit in the next month.

Since the onset of the pandemic, however, with curfews and lockdown measures introduced, the popularity of streaming services has increased dramatically.

In the space of three months, from April to June, the number of subscribers to the OSN streaming app, jumped by 500 percent.

While the number of people in the UAE logging on to watch their favourite movies and shows on Netflix increased by 26 percent in March at the outset of the country’s national sterilisation programme and nationwide lockdown.

But Mitchell told Arabian Business: “Without a question the pandemic has been a boon for the streamers, which is a good thing, because obviously people have been locked up and at home with their families with little to do. There’s been a number of studies that have come out of the US that have shown that the streaming platforms actually help cinema exhibition, because it teaches people to love movies.

Five things we’ve learned:

  • Cinema audiences are returning in increased numbers week-on-week, from shut down to around 15 percent
  • Streaming will not take the place of cinemas
  • Competition within streaming services could benefit cinemas
  • Cinema continues to be a family experience that transcends generations
  • Quality of offering will dictate which cinemas prosper going forward

“When you grew up it was a treat going to the cinemas and we’ll take our kids to the cinemas and continue the cycle. Having streaming platforms teaching people to love movies the way we love them, we think actually helps us.”

As well as services such as the OSN streaming app and Netflix, there are a host of other players in the streaming market, including Amazon Prime Video, Apple TV, StarzPlay, Hulu, Disney Plus, YouTube TV and a myriad of others.

Mitchell believed the level of competition could end up benefiting cinemas.

He explained “Whereas previously there were one or two incredibly dominant platforms that were almost monopolising, now there’s five, six or seven of them, each of them has their own content, so you can’t go to one place to watch all content. You can’t afford to have five subscriptions, so it keeps cinemas being that place I can go to and I can watch the newest film on a 20m screen with service, with food, with all those other bells and whistles.

“We think we can exist alongside eachother. The cinema window is important. The traditional model is it plays in cinemas and then after two or three months then it’s available to screen everywhere else. Effectively the studios are selling the same content to different platforms, which works for them as well.”The Numbers

  • 10 to 15 percent: Vox Cinemas occupancy level
  • 500 percent: OSN streaming app subscriber jump between April to June
  • 26 percent: Netflix's audience increase in March

Ultimately, however, with budgets continuing to be strained as a result of the economic impacts of Covid, he said it will come down to those offering the very best service, something which applies in the entertainment industry as much as all other industries.

And that’s where Dubai, with its reputation for five-star luxury, is ahead of the game, according to Mitchell.

“I think the markets that will struggle to reclaim part of their business are those older markets where they’ve failed to invest and where it’s a box with seats in it. You don’t want to go and pay to sit in a box with seats, I may as well watch it at home,” he said.

“I think one thing that’s going to come out of this pandemic for all businesses is people realise now they don’t need to accept average any more – I’m more susceptible to charge me whatever you like because it’s amazing. If it’s not amazing, you’re going to be very price-focused and if I’m price-focused I may as well order it online and have it delivered,” he added.

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