The transformation of cinemas into entertainment centers!

Cinemas are undergoing a transformation, evolving far beyond their traditional role of showing films. Faced with increasing competition from streaming platforms and changing consumer habits, cinema operators are innovating to attract new audiences. One of the most significant developments in the industry is the conversion of movie theaters into comprehensive entertainment centers, offering a range of activities that extend beyond simply watching movies. These cinematic entertainment centers (CECs) are positioning themselves as must-visit leisure destinations, incorporating dining, gaming, and sometimes even sports activities.

Indeed, there is a crisis in the cinema industry

The COVID-19 pandemic exacerbated the already deep crisis facing cinemas in the face of the rise of streaming platforms like Netflix. Movie theater attendance plummeted, with declines of up to 40% in the United States between 2019 and 2021. The global box office felt the impact.

Meanwhile, streaming platforms have seen their popularity soar, with Netflix reaching 231 million subscribers in 2022, while video streaming revenue jumped 21% to around $71 billion in 2021. This period has also been marked by an evolution in the film distribution model, with simultaneous releases in theaters and on streaming platforms, thus eroding the traditional exclusivity of cinemas.

The reasons for this decline in movie theater attendance include the increased convenience of home streaming, the high cost of theatrical releases, the rising quality of original productions on streaming platforms, and the diminishing exclusivity of movie theaters. In this challenging environment, the film industry is forced to rethink its model to remain competitive in the face of an ever-expanding array of home entertainment options.

Two opening models: franchise or white label

How ?

To accommodate these new activities, cinemas had to completely rethink their layouts. This sometimes involved removing some screening rooms to create spaces dedicated to leisure activities. These redesigns allowed for the introduction of bowling alleys, laser tag, virtual reality, amusement rides, arcade games, and action games. In addition to these activities, food services were added, offering a richer and more complete experience for visitors. This strategic shift not only extends the length of visits but also diversifies revenue streams.

Why this change?

The goal behind this diversification is clear: to increase customer retention, boost attendance during slower time slots, and attract a wider and more diverse clientele. By offering a variety of activities, cinemas hope not only to retain their existing customers but also to attract new market segments who might not otherwise have considered going to the movies.

What are the results?

The initial results of these transformations are promising. Cinemas that have adopted this diversification model are reporting a significant increase in attendance. Multifunctional spaces are attracting not only film enthusiasts but also those seeking a more complete entertainment experience. For example, chains like Santikos Entertainment have seen their attendance increase by approximately 24% thanks to these additions, thus strengthening their market position.

Why is this a winning strategy?

Cinemas possess an undeniable competitive advantage: their locations. Often situated in prime areas, with high visibility and accessibility, they are ideally positioned to attract a wide audience. Their large size and spatial configuration also allow them to offer experiences that few other spaces can provide. By transforming cinemas into diverse entertainment spaces, they maximize the use of their location and enhance their appeal, making them a sound long-term investment for owners.

source: https://www.amiens-tourisme.com/cinema-pathe/amiens/loipic080fs0005d

A French example!

The transformation of cinemas into entertainment centers is not limited to the United States; it is also beginning to take hold in France. A recent example is the Pathé franchise, which launched an innovative initiative at its Plan de Campagne location in Marseille. This space was redesigned to include a restaurant, the Pathé Café, thus following the trend of cinemas reinventing themselves to attract a wider audience.

Are you affected? Do you want to invest?

If you are facing this situation or are considering investing in transforming your cinemas into entertainment centers, we are here to help. With our expertise in the leisure industry, we have already assisted over 1,000 parks worldwide, representing more than 4 million square meters of operating space and attracting over 42 million visitors annually. Thanks to our experience and unique market presence, we are ideally positioned to advise and guide you in bringing your projects to fruition.

Whether you're looking for innovative ideas to reinvent your spaces or ready to take the plunge into investment, we offer a turnkey service, from design to implementation, to transform your cinemas into attractive and sustainable entertainment destinations. Contact us to discuss your projects and discover how we can help you maximize the potential of your venues.