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Market Insight

Cineplex Entertainment's popcorn and F&B to connect cinema with VOD audiences at home

December 13, 2019

Pablo Carrera Pablo Carrera Principal Research Analyst – Cinema, IHS Markit

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Canadian exhibitor group Cineplex has added 130 of its 168 cinemas as food providers in the food delivery system SkipTheDishes, alongside burger, pizza and sushi restaurants. Cineplex operates 1,718 screens in Canada as at September 2019 according to IHS Markit Technology, now part of Informa Tech.

SkipTheDishes clients in Canada can now buy from popcorn to drinks to hotdogs prepared in the Cineplex locations, but also can get vouchers to rent a film in Cineplex Store HD, the TVOD platform that the operator launched in 2010, for CAD 5.99. 

 

Our analysis

Cineplex already has nurtured a relationship with its clients beyond the cinema and into their homes since 2010 with their TVOD platform. The offering of food and beverage to go with that experience is one step forward in the same direction.

Cineplex will surely cross-promote this to its cinema and TVOD customers, and viceversa. AMC in the US is a candidate after the launch of its AMC Theatres on Demand, an online platform to buy or rent films, in October this year. It would be a bigger leap however for other cinemas to do the same without a TVOD or other offering that linked the cinema experience with the home.

This move aims to capture some more spending capacity of their own TVOD audiences, but also those of other TVOD and even SVOD services because there isn’t similar film, TV or online video entertainment branded food available. To this regard, it is a smart step in that it leverages the overlap between cinema and SVOD audiences, evidenced in IHS Markit Technology recent customer surveys.

But it is not only about capturing those audiences at home. From a pure P&L perspective this move follows the strategy of restauration businesses: it brings more customers, but the sales will not increase the fixed costs of the F&B installation and staff, but only produce costs, which represent a very low percentage in these light food and drinks products anyway. The result (if marketing costs don’t eat it all) is more profits from that line of business.

Geography
Canada
Organization
Cineplex Entertainment
Research by Market
Media & Advertising
Category
Cinema
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