Premium formats are continually growing in presence and importance across the cinema industry. From new full sensory experiences with 4DX to the classic Gold Class that Village Cinemas has been running for nearly 25 years, there are more and more ways to differentiate cinema experiences, and doing so is becoming more and more integral to businesses.
Recently, we sat down with Nic Robin, Executive General Manager, Revenue & Growth for Village Cinemas Australia, in an interview on the Behind the Screens podcast. Overseeing marketing content and sales, Nic is especially well positioned to know what moviegoers expect and look for from exhibitors today, not just in terms of films, but services and facilities that are key to the ‘premiumisation of cinema’.
It’s all about taking customer experience to the next level. “Pioneering and innovation have been at the heart of Village Roadshow for the better part of seven decades,” Nic said, “and I think it’s the key to Village’s success. Even with branching out into production, distribution, and theme parks, at the core it’s always about entertaining customers and delivering great guest experience.”
Defining premiumisation
Premiumisation, as Nic defined it for cinema, is “going above and beyond the big screen and popcorn.” While big screens and big sound have always brought the wow factor to cinema, competition with increasingly high-fidelity home entertainment makes going beyond that all the more important. Village Cinemas currently operate nine different cinema concepts (Gold Class, Vmax, Vpremium, Vjunior, 4DX, Cinema Europa, Vsuite, and Drive-in retro and throwback experiences), and these premium screens account for more than half their box office revenue. At the top of the list, Gold Class accounts for about 30% alone.
Stellar guest experience has always been at the forefront of the cinema world, and there is a clear desire for moviegoers to elevate their cinemagoing experiences. These concepts are how Village provides that opportunity to a number of different customer desires, but the differences in their provided experiences also raise their own challenges, such as marketing them all appropriately and effectively.
Across nine different premium concepts there’s a wide range of differentiation; luxury cinema experience with Gold Class, café experiences with bespoke programming in Cinema Europa, and experiences tailored to specific audiences such as families or date nights. With so many customer personas in mind for different experiences, marketing and differentiation of premium offerings becomes very important.
“A large part [of that marketing] comes back to our partnerships with studios,” Nic explained. “We have to work tirelessly to ensure that, as a cinema brand, we’re elevating the experience of cinemagoing. Studios and distributors have an innate strength with promoting the film product, which is vitally important to the industry. But as an exhibitor, we take that strength and pair it with the experience. It comes down to working with our studio partners to bring together the product sell of the film and the experience sell of the concept.”
Pairing different service delivery models to premium concepts is one significant way Village enhances and differentiates their premium experiences. “Gold Class is our best example,” Nic said. “It’s our most premium cinema offering, and the guest experience is complemented by the delivery model—in-foyer ordering from a more diverse and upscale menu with in-seat delivery of F&B.”
Obviously, in-seat delivery—like many of the services that enhance premium offerings—comes with additional payroll costs that have to be balanced. But because that high-quality guest experience is driving guest’s decisions to choose these premium tickets, the tickets are able to ensure a high yield is realised because of that experience.
Making premium experiences successful
To keep an eye on the success of premium experiences, Nic looks at three key pillars: quality, price, and convenience. Across the world, and certainly in the Australian market, the quality of cinema in screens, sound, and service, is high and always climbing higher. Cinemagoers in many markets are blessed with countless great cinemas and a plethora of choice.
Price raises a number of points. “I completely agree that price plays into the decision of whether to go to a movie or not,” Nic said. “Is it worth leaving the house for $20 when there’s great content available at home?” In a market such as Australia, where ticket prices are among the highest average around the world, quality needs to rise to meet the price.
But the real key pillar now, according to Nic, is convenience. Convenience is the battleground with home content consumption, with all entertainment competing for the share of consumers’ time and wallets. “It’s that last golden goose. Trying to compete for that time economy with convenience is where we’re going to see the most improvement over the next 5-10 years.”
Entertainment outside the cinema industry has moved at incredible paces over recent decades, as Nic pointed out, with YouTube, Netflix, and newer streaming offerings for home entertainment. “Sporting events have continued to evolve too,” he added. “I think the key takeaway is that to stand still and not evolve is essentially moving backwards. We might see staying still as an opportunity gain now, but by not moving, it’s actually an opportunity loss.”
Marketing premium experiences
Technological shifts and the impact of the pandemic may have accelerated pre-pandemic strategies in adapting the customer experience, but that wasn’t the only key change Nic has noticed over recent years.
One other key change he pointed to was studio release alignment. “[It is] really ensuring that we’re making the most of our valuable data as a retailer, and combining the media assets that we have on hand to find efficiencies for our studio partners. To ensure we’re converting high-propensity audiences by title.”
Pairing film—the obvious driver of moviegoing—to the experience is key. Nic emphasised that Village works with their studio partners to align the product sell of a film and the experience sell of a cinemagoing concept. “Customer decisions start with seeing a great film product and saying ‘I want to see that film’. We aim to tie that to ‘I want to see that film in that experience’ and tie that emotional connection that the customer has with cinema.”
The second key change was reactivation. “Pre-pandemic, frequency was the key driver of success for most cinema loyalty programs,” Nic explained. “We always wanted one more visit. But loyalty programs allowed us an incredible tool and asset to rebound out of COVID to be able to market to customers in an incredibly efficient manner and start to rebuild our active loyalty populations.”
Loyalty programs provide a greater and more nuanced connection with your cinema audience. “They’re paramount to the success of an exhibitor. For us, a member’s annual value is three times that of a non-member. That allows us to take a different view of the value in our membership base; looking at frequency over one-time transactions. From our perspective it’s really about trying to obtain more valuable insights and engage outside of the loyalty program.”
Nic pointed to commercialization as the next seed in the loyalty space. “Commercialization can be either internal, trying to drive higher yield through population growth, frequency, and price, or it can be external. We’re starting to look at how Village could utilise its loyalty program to try and drive third-party business where partners would pay for the privilege of rewarding via rewards points to engage and activate their customers.
“I think for cinemas it’s a space that’s key for growth.”
With how long Village has stood in the industry, and the strength of its offerings like Gold Class, Nic had rich insights into the real impact and strategy of premiumising cinema experiences. To hear even more insights, listen to our complete interview with Nic Robin on the Behind The Screens podcast.
