If there were an Oscar for the best-performing cinema market, the winner would undoubtedly be China, where box office receipts have grown by more than 30% a year for the past decade.
With over 25,000 screens currently open, and reports of 100 new ones being built every week, the Chinese cinema market is showing no signs of slowing. Some forecasters predict the Chinese box office to surpass the US by 2018.
This surge has not gone unnoticed in Hollywood, either. The last installment of the "Iron Man" franchise, for example, included a special scene featuring Chinese A-list actors that was only seen in China. The fourth installment of Michael Bay’s "Transformers" series was largely set in China, and its premiere was held in Hong Kong. The film went on to top last year’s global box office with US$1.087bn.
Indonesia is also enjoying a good run at the movies. At the end of 2012, Cinema 21 Group, Indonesia’s largest cinema chain network, operated a total of 571 screens in 31 cities across Indonesia, including the country’s very first IMAX theatre. According to "Film Journal International", the number of screens at the end of 2014 was closer to 750.
The growth in Asia is driven by the availability of better quality content, better movies and better cinemas, suggests Adil Zaim, CEO Carat China.
"There’s been quite a bit of a turnaround in cinema," he says. "People are consuming more, going out more and spending more in shopping malls. And they’re engaging in lots more outdoor activities, compared to in the past where people were glued to TV."
More crucially, though, says Ben Hawker, commercial partnership director, Asia-Pacific, at Yummi Media Group, cinema remains a social experience. "Cinema retains the ability to create face-to-face discussion amongst friends and family groups in a way that most digital formats will struggle to achieve," he says.
So what does Asia’s resurgent cinema crowd mean for advertisers? At Carat, Zaim says that a significant number of clients across all sectors, from automotive through FMCG to, finance are investing more in cinema advertising. With box office revenues growing at about 30 to 40% annually in China, Zaim suggests that in terms of advertising spend "it’s growing even higher".
"Advertising in cinema is now a serious consideration, which it wasn’t before," he says. "Go back five years and cinema wasn’t really considered a viable option for large scale advertisers."
In Malaysia, cinema advertising also "grew leaps and bounds" in the last two years, says Tho Tuck Woh, MD at media and entertainment group Redberry Ambient.
"We changed the way advertising should be at cinemas, aggressively," he says. "Cinemas have gone fully digital, making it more accessible and affordable. Beyond customary screen ads, cinemas are applying activation more, plus hall adoption. And we’re exploring new formats other than just on screen."
Those "new formats" are being driven largely by technology and brands. Yummi Media Group offers interactive solutions with smartphones before the start of a film. Using Yummi’s technology platform, brands including HTC, Playstation and BMW have created interactive content for cinema audiences.
"Advertisers are looking toward interactive technologies that enable the jump from the screen onto the audience’s handset," says Hawker. "This not only captures attention, but provides the brand with a channel to reconnect with the audience after they have left the cinema. This extends the value cinema can deliver and enables genuine accountability which has been missing from cinema advertising in the past."
Last year Yummi partnered with "China Times," the exclusive advertising partner of Wanda Cinema Line, China’s largest theatre chain to launch Wedong, an interactive cinema app.
"We hope to build a virtual space in Wedong for movie-goers to extend and maximise the ads experience," says Lulu Zhou, business development director of China Times. "Interactive ads are very new in China, we need to educate and develop behaviour."
Zhou says that increased interactivity may eventually lead to cinema audiences choosing alternate endings to movies or personalised ads for themselves.
In December last year, JCDecaux Singapore ran a study on cinema-goers’ attitudes and behavior towards advertising. The results found 74% ad recall among interviews and 80% saying they enjoyed cinema ads.
"The immersive nature of cinema advertising is unparalleled," says Hawker. "The big screen enables above-the-line ads with real impact that can leave a lasting impression on the audience in a way that TV or digital cannot."
There are challenges, of course, the biggest being that in most markets buying cinema media at scale is a complex and time-consuming process.
"Buyers and planners often need to make agreements with multiple exhibitors or sales houses to buy the scale they desire," says Hawker. "More consolidation would push the percent of spend on cinema up."
Zaim concludes that cinema advertising in Asia is considered more of an upscale brand channel: "We think it’s going to continue to grow significantly, but as a total percentage of the total ad spend, of course the share is going to remain small, partially because there’s obviously reach factor when you’re redirecting spend from TV or online, to cinema."
This article first appeared on campaignasia.com.