When. Cinema. Works.

“[T]he big screen. That is its natural habitat—the only place, you might say, where its proud and leonine presence has any meaning. Anything more cramped is a cage, as Jon Stewart showed during this year’s Oscar ceremony. At one point, we found him gazing at his iPhone. “I’m watching ‘Lawrence of Arabia.’ It’s just awesome,” he said, adding, “To really appreciate it, you have to see it in the wide screen.” And he turned the phone on its side. Deserts of vast eternity, reduced to three inches by two.”

– Anthony Lane, The New Yorker

Film can sometimes be a mercurial medium. Especially nowadays. It encompasses multiple genres, and, like food, is meant for different occasions, for different needs. Of course, sometimes we go to bad restaurants, or order in, and the experience is terrible. Uber-flop John Carter cost Disney a cool $200m, and wasted many a precious dollar and hour for those that went to see it (admittedly few). But sometimes it’s like a great burger and fries – Die Hard springs to mind – and sometimes it’s a sumptuous 6-course meal cooked by a Michelin-starrred chef – Lawrence of Arabia, or All the King’s Men. Film can stimulate us, it can teach us, and it can be a breezy bit of consumption to pass the time, like a coffee at Starbucks. Moreover, as with food, it can be consumed in different places and circumstances. There are times when the right way to watch a certain film is on your iPad in a cramped airline seat. Pure escapism. But cinema has a crucial place too.

It was interesting today, when Zeitgeist went to see a movie, that it was preceded by an announcement showing an empty cinema, covered in cobwebs and dust, bemoaning the death of the medium at the hands of pirates. Its aim was to take the audience on a guilt trip: ‘Why are you illegally downloading films?’ ‘Why aren’t you coming to see more films at the cinema?’ it pleaded. There are a couple of things strategically wrong with this approach. Firstly, what is the principle problem here? Alright, people are not going to the cinema as often as we would like. Zeitgeist remembers in a brief stint working for Fox several years ago that people went to the cinema 1.8 times a year in the UK. The Economist reports that the share of Americans who attend cinema at least once a month has declined from 30% in 2000 to 10% in 2011. The assumption is that people are instead pirating films at home, thereby depriving studios of money (ignoring research that suggests those that pirate are often avid cinema-goers, and optimistically equating every film downloaded to ticket revenue lost). Well, one quick way to address this is to make films legally available – at a sizeable premium – on multiple platforms day and date. We’ve argued this before, and entertainment trade Variety has used our argument for a lead editorial. It should be recognised, that, although the most prominent face of the film industry, cinema is not what makes the studio money; for years the bulk of profits have been made in home entertainment consumption. Furthermore, there are two fallacies here. One is that cinemas make most of their profit from the snacks people buy at the cinema, not the films themselves. If you want to increase margins, there should be a much more prominent focus on food options, and that means offering a wider, more tempting range of food to be eaten, which is then promoted more effectively. The way such snacks are currently promoted – “Let’s all go the lobby” – has not altered for a half century. Lastly and most egregiously, the communication is completely misdirected, talking to the very audience who is already doing what the ad asks them to do. The ad is shown nowhere but the cinema, therefore only people who go to the cinema will be subject to this guilt trip. To avoid feeling guilty, one can avoid the ad by avoiding the cinema. The logic is completely twisted. Negative communications have been shown to be much less effective in influencing behaviour than positive affirmation. So let’s think about a way to promote cinema that goes beyond a highlight reel of what movies are on in a particular season. More robust revenue streams will have to be found soon. Less people are turning out to the cinema, and in foreign markets, which are doing relatively well, a far smaller chunk of box-office receipts go to the studios.

What also played during the reel before the film started was a short film by Disney Animation that has been nominated for an Academy Award, called Paperman (see trailer above). Zeitgeist had watched the short some days ago on his iPhone after coming across it on Twitter, and enjoyed it thoroughly. It was exciting and convenient to be able to consume something so quickly after hearing about it. Moreover, it was instantly shareable with the 400-odd people who follow our tweets when we retweeted the link. Seeing it in the cinema today though really reinforced the power of the big screen; the detail you couldn’t see on the iPhone, the great sound, and the shared laughter and enjoyment from those around you. “Grandeur is a far from simple blessing”, writes Anthony Lane in the same article quoted at the beginning of this post, in The New Yorker back in 2008. The pleasure of watching something in the cinema is ultimately an irrational benefit, which can be hard to quantify, but even harder to ignore.

UPDATE (06.12.13): The Economist featured a good article on how cinemas are seeking new revenue streams around the world, here.

A serving of experiential

Recently, those boffins over at Leo Burnett came up with an intriguing idea for the low-cost food store Lidl. They invited a prominent chef to cook a meal using food from the store and then serve it aboard a flight to Cancun. Adverblog notes, “Sure, it’s a nice case study, I love the idea… But I’m not sure the effort is worth the result. Creative geeks like us will celebrate the idea, but how many consumers actually were exposed to it?” That’s true; it was only a plane full of people who were exposed to the meal. But the story was followed through in TV spots and recipe books, creating a nice thread of a tale.

Last month in New York, travellers on the subway were treated to a similar gastronomic delight when they were served a delectable six-course meal, in-transit. Both events show how something experiential can sometimes be far more memorable than other forms of marketing. In both these cases, the events involved defying expectations by creating special experiences in spaces that are otherwise seen as ephemeral, rather than being a destination in of themselves.

Out (of pocket) for a byte to eat

“One cannot think well, love well, sleep well, if one has not dined well”, wrote Virginia Woolf. A friend of Zeitgeist’s is coming to town on Friday for what will surely be a sybaritic weekend. For the first time, Zeitgeist found themselves on Toptable booking dinner at a very nice restaurant nestled in London’s Mayfair district. The reservation came with an offer of 50% off the usual a la carte menu price. What had Zeitgeist done to deserve this? Nothing. So what is in it for the restaurant? See previous answer, perhaps. As any Toptable devotee knows, offers like this are plentiful, and reflect the state of the restaurant industry as a whole, particularly in the premium sector.

Zeitgeist was walking in Notting Hill about eighteen months ago with, as it happens, this same friend. We happened to pass Nicole Farhi’s restaurant, which sits next to a Daylesford Organic. Both were teeming with people literally overflowing into the streets enjoying their expensive brunches. “Credit crunch, what credit crunch?” my observant friend quipped at the time. It was hard to disagree. The numerous plates of food and cups of coffee being consumed by these Chloé- and Zegna-wearing denizens were totally out of sync with the times. Perhaps what these people had been doing though is downtrading. Instead of going out somewhere special for a dinner, they had instead chosen to go somewhere more informal for brunch. Or perhaps instead of going away on holiday for a weekend break, they had decided to stay at home and enjoy the fruits of London. This is an anecdotal example but the argument is supported by the reams of analysis conducted by those boffins at places like Forrester and Datamonitor; JWT’s AnxietyIndex wrote in May “Ostentation is out, practicality is in.” Witness brands like Starbucks and Louis Vuitton.

It’s this lack of ostentation and sense of frugality (which, for the most part, still pervades) that perhaps explains why, writes The Economist, “Visits to posh restaurants in America declined by 15% between May 2008 and May this year… Fast-food restaurants, on the other hand, saw traffic decline only 2%.”. It would be nice to know how a “posh” restaurant is defined, but otherwise it makes for an interesting statement. The decline at both ends of the dining spectrum lends credence to the notion that there is a “cocooning” going on where people are quite happy to order in or to cook their own meals, surrounded by their HDTVs and microwaves. Clearly though it is the high end that is fairing particularly poorly.

The article notes that Restaurant Week – held during the dog days of summer in Manhattan, when the city fills with tourists and any sensible residents have escaped northward – lasts for six weeks this year, and notes that the 21 Club “usually sees its business increase by around 25-40%” during the Week. So, similar to Taste of London, the event must attract those who would not usually consider dining at such a place (for such a price). Are these the customers the restaurant wants though? No mention is made in the article as to retention rates. As pointed out in the Wall Street Journal, (which contains details of several interesting promotions),

“‘Having dollar menus and value menus has become unsustainable, from an operating profit standpoint, so restaurants need to be able to establish consumer continuity with loyalty programs. Instead of getting customers in three or four times per year for special events, they need to get them in two to three times per month,’ says Burt P. Flickinger III, managing director of Strategic Resource Group, a consumer consulting firm.”

The industry has had to adapt though as the Internet plays an increasingly dominant role in people’s lives, not only exposing the consumer and restaurant to every bad review detailing every morsel of undercooked food and every supercilious waiter, but also forcing the establishments to adapt to people’s psychology when shopping online, which mostly falls under the category of ‘bargain hunter’. A similar thing has happened with high-end fashion. Members-only sites offering significant discounts on luxury brands have sprung up everywhere. The Economist reports that two of these, Gilt and Rue La La, have begun offering restaurant discounts as well:

“Gilt, for example, recently sold a four-course meal at the Tribeca Grill, a restaurant owned by Robert De Niro, an actor, for $160 (36% off). Shopping sites like these attract image-conscious restaurants, because only the site’s members can see that the restaurant has started to offer leaner prices.”

The other lure for the restaurant in this case is knowing that those whom the offer will be seen by are likely to be a suitable target audience for your establishment; at the very least a more specific one than might be found on somewhere like Toptable. These restaurants are innovating (mostly because they have to). The prospect of drawing crowds is an attractive one. Sites like Groupon offer significant discounts on meals, but which only become active once enough people have signed up to the offer. Foursquare similarly relies on encouraging a group of people doing virtual battle in order to obtain a mayorship that grants them free coffee at Starbucks or free champagne and a great seat at Galvin’s Windows. In the long term, having offers that keep the customer loyal (and accustomed to a consistently-priced menu) will hopefully, for the sake of the restaurants, trump the savage discounting some have become imbroiled in. For Zeitgeist, value-add to the proposition is far more attractive than saving on a regular meal. Let’s hope others think the same.