In a bold move to ensure future sustainability and profit, Ster-Kinekor today, 16 March 2005, announced price cuts of over 50% to R14 a ticket for its rebranded affordable cinema chain, 'Ster-Kinekor Junction' which will see 70% of current sites rebranded by this long weekend. CEO, Ferdi Gazendam, expects cinema attendance to increase from 16.5 million to a staggering 26 million over the next financial year as a result (2005/2006, ending-June).
A more exclusive, 'Ster-Kinekor Classic', "First Class" option will be created at seven existing sites in upmarket centres nationwide - retaining the current R35 ticket price. The exclusive branded cinemas will be created at: Brooklyn, Pretoria; Cavendish, Cape Town; Cresta, Randburg; Eastgate, Johannesburg East; Gateway, Durban; Sandton City, Gauteng; and Tygervalley, Cape.
And the changeover all happens this Friday, 18 March 2005, with Ster-Kinekor expecting a box office record as a result of the dramatic change in strategy - just in time for the long weekend and Easter holidays.
The "paramount" shift in strategy, according to CEO, Gazendam, is to tap into the "emerging black market", after consistent declines in the sector of 6% annually of the more "traditional, white", audience, and the continuing lack of access by the population at large to this medium. Research had also showed, that moviegoers, consistently, thought that ticket prices were too expensive (42%).
The solution was to open up new strategic avenues to access new markets.
"We did masses of research to understand our customers... There has been no attendance growth in 18 months. To come up with sustainable growth, we needed to go beyond the traditional marketing strategies." Gazendam said a radical innovation was needed and last year, the group began testing lower pricing structures at several cinema sites around the country, with huge success.
Where Ster-Kinekor did testing with a R10 ticket option at loss-making and marginal cinema sites: Sterland, Pretoria; Carlton, Johannesburg; The Wheel, Durban; Southgate, Johannesburg; Kenilworth, Cape Town; and Chatsworth, Durban, success was instant, turning the cinema sites into profitable sites - as well as reviving some of the businesses around the cinema sites in or near the declining "inner city" malls.
The strategy was therefore premiered this week to split Ster-Kinekor into two different offerings, based on price and value, reforming the cinema group into two rebranded chains - without changing current value offerings, such as movie club and Vitality benefits (which also benefit from the lower pricing structure) - but dramatically reducing prices at the majority of the group's cinemas; and introducing exclusive new options at the remaining (seven) sites - without changing the current price of R35 a ticket there.
In total, 30 of the current Ster-Kinekor cinemas (80%) will be converted to Ster-Kinekor Junction where movies will be shown for R14, and the remaining seven cinemas in the group will be known as Ster-Kinekor Classic with ticket prices remaining at R35.
Announcing the blockbuster new business strategy for Ster-Kinekor Films, at a press conference, Wednesday, Gazendam explained: "This is great news for movie fans. It makes movie-going very affordable for everyone and it also allows consumers to choose the kind of cinema experience they want - value or luxury. We have changed nothing about the fundamental experience - efficient service, good quality sound on big screens with comfortable seating. This will remain the cornerstone of our offering at both Ster-Kinekor Junction and Ster-Kinekor Classic."
Gazendam emphasised that the group does not expect to be out of pocket with the rebranding or increase in staff and upgrade of the 'Classic' options. "Yes, there will be an increase in costs, but we are better off at the box office."
New advertising revenue streams had also been created through the introduction of plasma screens in the foyers, and several big brand advertisers - such as the soft drink manufacturers and cell phone companies - had expressed an interest in targeting the LSM 6, 7, 8, etc, group that would be a captive audience at the 'Junction' sites.
The new Ster-Kinekor Junction, with movies at just R14.00, follows the international trend of unreserved seating; with customers able to pre-book tickets through TicketLine: 082 16789, www.sterkinekor.com or in-cinema at the box office. Ster-Kinekor Junction will still show the latest movies as they are released on circuit, with the number of shows being increased to six daily.
Full movie club benefits will remain, including half-price Tuesdays (now only R7!), and Discovery Medical Aid's Vitality Club benefits.
The move to unreserved seating at Ster-Kinekor Junction is an international trend.
At the new premium Ster-Kinekor Classic, customers will be able to reserve seating through the current booking options (TicketLine and the website), in-cinema self-service terminals and at cinema box offices. Couches have been placed in foyers along with plasma screens previewing movie news, and new catering lines will be continually introduced.
Full movie club benefits and Vitality benefits remain.
New catering options will be introduced, i.e., nacho's on offer; as well as coffee machines; new uniforms for staff; and an increase in service.
The new pricing structure is also good news for the more than 1.25 million Ster-Kinekor Movie Club members who will still receive full club benefits. Half-price Tuesdays for Movie Club members remains in place at both Ster-Kinekor Junction and Ster-Kinekor Classic. Members will now earn 'moviemoola' - a 10% credit on all movie bookings, which can be then converted into free tickets at either of the two chains.
For Ster-Kinekor Vitality movie benefit members, tickets will remain at R12 at Ster-Kinekor Classic sites but at Ster-Kinekor Junction sites Vitality members will only pay R6 for their movie experience.
Ster-Kinekor piloted the Ster-Kinekor Junction project for over 12 months at five of its sites with attendances, on average, more than doubling over the period. This came against a backdrop of a 5% decline in general cinema audience attendances at Ster-Kinekor in the last six months (6% nationwide at all cinema chains).
"Our research has show than nearly half of our customers find movie-going expensive and we want to get new audiences to experience the magic of cinema. We believe The changes will be a boost for local filmmakers as well, with not only more people being able to afford movies, but making it a far less risky purchase - and we hope people will be more adventurous in their choices," concluded Gazendam.
Cinema Nouveau remains unaffected by the new pricing.
Ster-Kinekor Junction theatres are at the following sites:
Arcadia Sterland, Bayside, Carlton Centre, Carnival City, Centurion, Chatsworth, East Rand Mall, Eikestad, Fourways, George, Greenacres Bridge, Kenilworth, Key-West (Krugersdorp), Kollonade Park, Longbeach, Musgrave, Northgate, Pietersburg, Potchefstroom, Riversquare, Zone@ Rosebank, Rustenburg, Scottsville, Shelly Beach, Somerset West, Southgate, The Wheel, Tokai Blue Route, Vincent Park and Westgate.
Ster-Kinekor Classic is at the following sites:
Brooklyn, Cavendish, Cresta, Eastgate, Gateway, Sandton City and Tygervalley
Ster-Kinekor Films is the filmed and digital entertainment subsidiary of Primedia Limited, the South African JSE listed media group established in 1994. Ster-Kinekor Films houses cinema exhibition, film distribution, home entertainment and digital gaming. Ster-Kinekor is the largest cinema exhibitor in South Africa with 30 Ster-Kinekor Junction value cinemas and seven Ster-Kinekor Classic cinemas countrywide, and five drive-ins totaling 348 screens and over 50 000 seats. It operates the only dedicated "art" circuit in the world - Cinema Nouveau as well as a Bollywood circuit. It has over 1.25 million members in its Movie Club.
