Lights, camera… real estate action
Total Property - Issue 6 2017
Can New Zealand's movie-going habit be saved? Cinemas are luring a new generation of movie-goers with upgraded screens, seats and snacks. Total Property looks at what that means for their property footprint.
Cinema’s “golden age” is in the past. Or is it? Every year, figures show that young people are shunning the box office as online viewing continues to grow in popularity. With younger audiences turning away from the multiplexes and immersing themselves in other forms of entertainment, cinema-operators are trying everything they can to see what sticks.
A survey by movie guide website flicks.co.nz found that 51 per cent of Kiwis regularly watch movies online, up from 41 per cent in 2011. Of those, 43 per cent admitted to usually watching movies from an illegal source, which was down from 2011 when 87 per cent said they regularly pirated films.
This has major implications for the movie industry’s property footprint. Anyone who doubts that should count the number of video rental stores on their high street.
Blockbuster Video was once the king of the home entertainment market. At its peak in 2004, it had 9,094 stores worldwide, but by 2013 a shift in consumer behaviour and the emergence of disruptor businesses brought Blockbuster to its knees and the chain retreated from bricks and mortar.
But there is reason to believe that cinema-going in New Zealand can avoid that fate.
A Total Property survey of cinema operators in New Zealand suggests the industry is in good health and optimistic about its future.
According to the survey, most cinema operators (62 percent) do not believe streaming sites such as Netflix are a threat to their business. The prevailing sentiment is that cinemas still offer a movie experience like no other, and that they are still the only place audiences can view the latest release legally.
However, many operators are concerned about illegal downloading sites, with some arguing that a lack of political action on the issue is hurting the movie industry.
Encouragingly, the survey found that the majority of cinema operators (57 percent) had recently made upgrades to their business, such as investing in digital projectors and new screens, renovating their auditoriums and lobbies and offering dine-in services, luxury seating and alcohol.
Audiences are willing to pay a premium for a higher-quality viewing experience, and many cinema operators are seeking to turn a trip to the movies into a plush date night. Almost a fifth of New Zealand cinemas (18 percent) offer a dine-in or luxury experience while more than half (54 percent) are licensed to sell alcohol. Most cinemas are also located on sites that offer car-parking or are close to parking spots.
The survey found there are 127 working cinemas in New Zealand (above the 116 registered with the industry’s official body, New Zealand Screen Association).
Cinema levels have held steady since 2011, while the number of screens had been increasing until Kaikoura earthquakes of last year resulted in the temporary closure of Reefton Cinema in the West Coast and Reading Cinema in central Wellington and the permanent closure of Event Queensgate in Lower Hutt and the Mayfair Theatre in Kaikoura.
Combined, New Zealand’s cinemas house 451 screens - 1 screen for 10,210 people. To put that in perspective, the world's largest cinema market, the US, has 1 screen for 8,034 people, while the ratio for the UK and Australia is 1 per 15,620 and 1 per 11,586 respectively.
While Auckland boasts the most cinemas (26) and most multiplexes (14), the data suggests that Wellington/Hutt Valley is the real heart of cinema in New Zealand. It has a higher screen-to-population ratio than either Auckland and Canterbury, and is home to more independently-owned cinemas and cinemas screening independent/arthouse movies than any other major region in New Zealand.
Surprisingly, the region’s screen ratio is higher than cities New York, Los Angeles and London - 1 per 8,705 compared to 1 per 21,881 for New York, 1 per 9,425 for Los Angeles and 1 per 9,784 for London.
Rural and regional New Zealand is also well served, perhaps the result of the country’s unique geography. There are cinemas as far north as Kerikeri and multiplexes as far south as Invercargill. Many are community run, housed in renovated, pre-1950s town halls or theatres and serve as are focal point for their scattered communities.
The Coromandel has a high screen-to-population ratio (1 screen for 4,733 people) as do Gisborne (1 per 7,983), Marlborough (1 per 6,500), the West Coast (1 per 4,657) and Otago (1 per 5,433).
Bayleys figures also show:
• 70 percent of cinema businesses are owned by independent operators or community trusts; • 35 percent screen mainly independent or arthouse movies; • 56 percent operate more than two screens and occupy more than 1,000m2; • 21 percent are situated in a mall or shopping complex; and • 47 percent of cinema operators own the buildings they occupy.
Read more market insights from Total Property
Subscribe to receive the latest commercial news and insights from Bayleys Total Property