Christof Papousek CFO and Co-Shareholder of the Austrian Cineplexx Cinema Group and Member of the ACROSS Advisory Board, Credit: Cineplexx

The Importance of Cinemas in Malls

"Multiple trips to cinemas help familiarize people with the malls into which they are integrated."

By Christof Papousek

Generally speaking, leisure activities are of considerable importance to people, depending on society and orientation. A municipal indoor swimming pool or an artificial ice skating rink in winter, temporary amusement parks (fairs), as well as typical sports facilities, such as soccer fields, are very important to people. These leisure facilities are not only used for entertainment, but they also serve as essential meeting and communication points. In this context, of course, cinemas also play an important role. Historically, cinemas – even in small towns – have served as both places of entertainment for film lovers and places to see news and images from the “entire world”.  

Today, many things have changed, and the ever decreasing time resources of most people has, particularly, resulted in change. New technologies have dramatically changed television, and streaming services now enable unrestricted access to content at any time of day or night. Accordingly, leisure facility offerings have also changed and can be classified into three categories: sports facilities, family entertainment, and entertainment centers dedicated to film and music. In this context, I would like to exclude the broad field of gastronomy, as this is worthy of consideration in its own right. Nowadays, sports facilities also feature large entertainment components – such as indoor soccer fields, trampoline parks, climbing halls, and state-of-the-art fitness centers – and can no longer survive without infotainment and music. As all leisure activities are in fierce competition with each other, things that are thrilling and challenging have become more and more essential as those things score more in terms of attractiveness, thereby resulting in greater use by consumers. Compact areas ensure that these facilities are compatible with shopping malls as well. It goes without saying that family entertainment includes the broad spectrum of children’s entertainment, such as indoor playgrounds, ceramic painting workshops, and professional role-playing games (e.g., KidZania). In many cases, combined family offers are also available as part of the aforementioned sports facilities. Often, children’s birthday parties are offered and publicized at such locations.

Last but not least, what is the importance of film and music facilities? In this regard, the primary emphasis is on the technological and collective differentiation of the offerings compared to what is available in one’ s own home. Out-of-home consumption of film and music clearly differs from what is possible at home. Cinemas offer projection onto screens of well over 100 sq m, 3-dimensional sound, and premium technologies, such as IMAX and Dolby Cinema. These offers are not available in homes and are therefore – in spite of all the negative press reviews – consistently vigorously consumed. For example, 2018 marked the strongest cinema year in the history of cinema sales worldwide, and all historical records were also broken in traditional markets, such as the USA and the UK. This was achieved despite the increasing attractiveness of streaming services. The same can be said of music offerings: Streaming services allow unrestricted access to all kinds of music. Nevertheless, live concerts or broadcasts of such concerts are very popular – in some cases, at prices far in excess of a 1-year subscription to a streaming service.

Cinemas, as well as the other facilities previously mentioned, are of great importance to shopping malls. The reason has to do with the fact that they create frequency and turn malls into extended meeting places – as mentioned at the beginning with regard to the original leisure facilities. As a result, shopping centers have become regular leisure facilities for people within the catchment areas – beyond the standard retail offering. Multiple trips to cinemas help familiarize people with the malls into which they are integrated. Access routes are memorized and fewer barriers exist. Naturally, this also holds true the other way round. Attractive retail offers, which lead to higher footfall, also reduce barriers to the use of leisure facilities in the corresponding shopping centers. This represents a typical synergetic cycle. When both work, malls are very successful.

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