آیا سینما محکوم به فنا است؟ آیا غرفه داران تصویر بزرگ از دست دادن مزیت نسبی خود در تئاتر را می بینند؟

After three straight years of decline, movie theaters in the US may have recently ended a period of crisis with an increase in annual admissions (+ 3%) in 2006. This article argues, however, that major problems are not over for the industry. Most movie theaters in the multiplex era have adopted a remarkably similar strategy, one which is also very vulnerable to recent trends such as the explosion of home cinema, pay TV, video-on-demand (VOD), discounting by mass merchandisers of DVDs, computer games, and the collapse of video windows. Just as technological convergence has created a challenge for movie theaters, as it has in the past, so too can new technologies and creative use of assets (combined with multiple target marketing) offer a counter measure for at least some movie theaters; at least, until the next challenge arises. What is unlikely to succeed is the status quo, especially when so many multiplexes offer the same format as their competitors, appear to adopt a narrow definition of what business they are in, and manifest a ‘one-size-should-fit-all’ approach to customers. The industry has employed differentiation and niche marketing much less than other industries. As the extensive variety of necessary strategies cannot comprehensively be explored herein, this article focuses on two new technologies from the IMAX Corporation, DMX and MPX, as an example of how a theater operator might counter audience declines.

After three straight years of decline, movie theaters in the US may have recently ended a period of crisis with an increase in annual admissions (+ 3%) in 2006. This article argues, however, that major problems are not over for the industry. Most movie theaters in the multiplex era have adopted a remarkably similar strategy, one which is also very vulnerable to recent trends such as the explosion of home cinema, pay TV, video-on-demand (VOD), discounting by mass merchandisers of DVDs, computer games, and the collapse of video windows. Just as technological convergence has created a challenge for movie theaters, as it has in the past, so too can new technologies and creative use of assets (combined with multiple target marketing) offer a counter measure for at least some movie theaters; at least, until the next challenge arises. What is unlikely to succeed is the status quo, especially when so many multiplexes offer the same format as their competitors, appear to adopt a narrow definition of what business they are in, and manifest a ‘one-size-should-fit-all’ approach to customers. The industry has employed differentiation and niche marketing much less than other industries. As the extensive variety of necessary strategies cannot comprehensively be explored herein, this article focuses on two new technologies from the IMAX Corporation, DMX and MPX, as an example of how a theater operator might counter audience declines. Keywords * Cinema; * Movie theaters; * Strategy; * IMAX; * Home entertainment 1. The impact of new technologies on movie attendance Innovation is fundamental to continued business survival (Schumpeter, 1975). A sustainable competitive advantage facilitates long term firm profitability (Aaker, 1998), but relies upon ongoing environmental consonance and the position of defendability that is achieved if the advantage provides value that cannot be copied, substituted, or eroded by competitors (Barney, 1991 and Porter, 1980). Now a century old, the cinema has historically enjoyed a competitive advantage over other forms of entertainment, as built upon two foundations which are currently being undermined. During the movie industry’s first century, movie theaters represented the first-release retail market for the American film industry. Until movies were first broadcast on television in the late 1950s, and later became available on video, they could only be seen in a movie theater. Moreover, until the recent introduction of alternative digital delivery technologies and big screen televisions, the primary medium for watching movies on large, wide screens has also been in movie theaters. American movie theater attendance has, in the past, been impacted by the emergence of competition from product substitutes created by technological innovation. During the Great Depression, commercial radio provided Americans with free home entertainment. As a result, annual theater admissions declined from 1930 to 1936, with Fox Film President, William Fox, attributing the deleterious effect to the influence of radio (Sinclair, 1933). Booming once again following World War II, the box office racked up an almost two-fold increase in annual attendance between 1937 and 1946. Then, during the 1950s, American families migrated to the newly developing suburbs in search of cheap housing, an exodus which coincided with the widespread diffusion of television into American homes (Sklar, 1978). Annual movie attendance declined steeply as the weekly cinema-going audience began staying home to watch TV (Puttnam, 1998). The impact of this cultural and technological phenomenon was highlighted by a 1951 New York Times survey across 100 cities hosting television stations: movie attendance had declined between 20% and 40% in those locations (Gould, 1951). As summarized by Sklar (1978, p. 272), “By 1953, when 46% of American families were estimated to own television sets, motion picture attendance had dropped to almost exactly half of the 1946 high water mark.” Fig. 1 plots annual US movie admissions from 1920 to 2005 and illustrates that the introduction of new competing technologies (radio and TV) broadly corresponds to declining movie theater attendance over time. It also indicates that the mass movie-going audience fragmented after World War II as more product substitutes (black and white TV, color TV, Pay TV, home video, PCs) emerged over time to provide alternative entertainment options.Owing to the relatively recent, dynamic growth of the home video market, current release windows between movie theaters and videos have been shrinking. As such, movie theaters are facing an uncertain future, one in which they might well no longer hold the firm competitive advantage that they’ve historically enjoyed. This article considers how the US movie theater industry, in light of direct threats from new technologies, can re-establish a sustainable competitive advantage today. In addition, it identifies some innovations that may be relevant toward that end.

A lesson from both schools of strategic thought is that all firms within an industry should not adopt the same strategy. Porter argues against imitation in strategy, while RBV advocates note that different resource assortments suggest targeting different market segments and/or competing against different competitors (Hunt & Morgan, 1995). Clearly, IMAX is not a panacea for the movie theater industry, but it represents a viable strategy for some theater operators to combine resources in a unique way in order to differentiate themselves. One insight provided by the RBV approach is that operators must identify a durable source of value for consumers. Providing a giant screen and an immersive big sound experience that cannot be reproduced in the home is one way of doing this. Cinema-goers are diverse, and this should be reflected in the strategies adopted by the industry. Yet, the investment explosion of the past decade in US cinemas has produced thousands of multiplex theaters, most of which are remarkably similar. History demonstrates that a fatal strategic mistake is to not define competition broadly enough; in this case, home entertainment systems and not just other cinemas. For those consumers who have a home entertainment system, the cinema must offer an experience that the home system cannot replicate. Finally, most movie theaters have made little or no attempt to attract non-traditional audiences at non-peak times. Digital projection will enable exhibition of live concerts or major sporting events, and could provide a venue for business, social, cultural, or religious organizations. The movie theater industry can survive — if it can shrug off the straitjacket of the standard multiplex experience by embracing new technologies and more diverse target markets. With product substitutes siphoning off movie audiences and aging baby boomers entering retirement, however, the biggest threat to theaters may be marketing myopia. Theater operators should be asking the classic question: What business are we in?