The impact of Netflix on movie theatres in South Africa

15 February 2019

Content - Television

Going to the movies has been one of the most popular forms of entertainment for over a century.

Despite continued innovation in the entertainment industry – such as television, VHS tapes, and DVDs – cinema has stood the test of time.

However, with the affordability and mass access provided by streaming services like Netflix and Showmax, cinema faces arguably its biggest challenge yet.

These services provide users with the ability to sit on their couch and scroll through an extensive catalogue of high-quality movies, all for a monthly price similar to a single trip to the cinema.

To find out how streaming services are affecting the cinema business in South Africa, MyBroadband spoke to Nu Metro. Nu Metro’s marketing and content executive Chantelle Burrows told MyBroadband that the company continues to show growth locally. “We have seen increases in both box office sales and average customer spend over the past year, bucking general industry trends,” said Burrows.

In 2018, Nu Metro opened new cineplexes in Maputo and Mamelodi, and has more scheduled to open in Giyani in Limpopo and in Zambia in the coming months.

Burrows added that legal streaming services like Netflix aren’t perceived by Nu Metro as a big threat. “These industries operate in a parallel domain to the cinema industry. Some research shows that heavy downloaders or streamers are also ardent cinemagoers,” Burrows explained.

According to this research, covered by Variety, people who go to the movies nine or more times per year consume more streamed video content than those who only visit the movies once or twice per year.

Burrows added that comparing cinemas to Netflix or Showmax is like comparing live music performances to downloading or buying music.

“The experience of watching a movie in a cinema on a big screen with premium quality sound completely overshadows owning or viewing a film on a laptop, mobile, or TV screen,” said Burrows.

Netflix has acknowledged this to a degree by showing select movies at cinemas before they become available on its streaming service.

A more pressing matter is piracy, said Burrows, adding that Nu Metro supports efforts taken by authorities to deal with piracy. “Piracy has a damaging effect on the livelihood of all roleplayers in the film and cinema industries,” Burrows added.

Nu Metro told MyBroadband in April 2018 that they support the blocking of piracy sites in South Africa.

Nu Metro’s comments came after a report by Russia’s telecommunications regulator, which stated that cinema attendance and revenues increased by 11% after 8,000 pirate sites were blocked in the country.

However, a new study has shown that post-release movie piracy actually increases box office popularity.

Source: MyBroadband