RESEARCH REPORT

In brief

In brief

  • The COVID-19 pandemic has re-shaped demand across media companies with a drastic rise in consumption of on-demand content and in-home experiences.
  • Prior to the pandemic, 2019 was the second-worst year for US movie ticket sales since 1995 while at-home content consumption continues to grow.1
  • Accenture is exploring what new experiences, fueled by technology, will be required to excite consumers and reinvigorate the industry.
  • In this paper, we explore how 5G can become the technology that harmonizes the cinematic experience with evolving consumer expectations.


With 5G-enabled experiences, you could be in the movie!

Demand across media companies being re-shaped

The COVID-19 global pandemic has meant that demand across media companies is being re-shaped at a rapid pace with a drastic rise in consumption of on-demand content and in-home experiences. This has been coupled with a sudden and universal obliteration of in-person experiences which are significantly impacting venue owners across the board, including movie theaters.

Consuming content at home has become the new normal for many. And while that is the current reality, there will be a time when consumers head back to the theaters, albeit in different ways. New experiences, fueled by next generation technology, will be required to excite consumers and compel them to "go back to the movies" in order to reinvigorate the industry.



2019 the second-worst year for US movie ticket sales

Total US admissions in 2019 declined nearly 5 percent, the second-worst year for movie ticket buying since 1995. That’s despite incredible storytelling, 3D, Imax and 4DX experiences, and visual effects and imagery that are so true to life that it’s hard to tell the difference from the real thing. At the same time, more new content is being released ever-faster – in 2018 there were 350 more movies released than in 2009. This has created a business challenge: production studios must invest significantly more to stay competitive, yet those investments are not bringing more people to the theater.

So, what changed?

Consumer expectations fueled by tremendous advances in technology. Today, consumers have unprecedented access to enormous libraries of content: anywhere, anytime and on any device. COVID-19 has driven all of us to take advantage of this access in a decisive way. And the quality of storytelling continues to improve in a highly competitive market. In fact, in an Accenture research study (pre COVID-19) surveying over 1,000 moviegoers, forty-three percent of respondents said they turn to streaming services like Netflix and Hulu most often to watch newly-released video content. That number has now exponentially increased.

43%

of respondents said they turn to streaming services like Netflix and Hulu most often to watch newly-released video content.

And while the studios are still drawing audiences to the theaters, especially for big blockbuster releases, the experience will have to be even more differentiated as audiences will be better acclimated to these other entertainment options. In addition, the production of content has been greatly impacted by COVID-19, so studios will need to extend the interest for a particular film while offering a multitude of ways to experience the feature and expand its relevancy.

The power of 5G, enabling new technology

The proliferation of 5G and the integration of existing and new technology will enable new capabilities at scale to transform the theatrical experience. For example:

Ultra-high-resolution scan and capture technology

Allows anyone’s likeness to be accurately rendered into digital video content.

Immersive experiences

Continue to evolve thanks to smooth extended reality (XR) or even hologram experiences that eliminate motion sickness when viewing.

Real-time rendering and interactive AI

Can help create characters to extend the film narrative and draw in additional audiences seeking a connection between their world and digital content.

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The cinematic experience of the future, fueled by 5G

What if going to the movies was part of a connected experience spanning multiple touchpoints that draw people into the theaters? That means before the theater experience, on the way to the theater, at the theater and back at home – or anywhere consumers are using devices.

What if consumers once again saw the theatrical experience as new and innovative, and there were reasons to go to the theater in addition to seeing the main feature? In an Accenture 5G consumer survey, 58 percent of consumers said they would be excited about a connected, end-to-end extended reality experience, and 84 percent of them would be willing to pay for it. 

58%

of customers said they would be excited about a connected, end-to-end extended reality experience.

84%

of them would be willing to pay for it.

What does the future hold?

Could harnessing 5G to create unique and compelling experiences draw audiences in for the next 50 years? The answer is yes. Now more than ever, new experiences are needed to compel customers back to the theaters in addition to the feature film itself. In 2019, the U.S./Canada box office market drew 1.24 billion admissions, generating $11.4 billion in revenue from ticket sales.2 Accounting for recent market conditions and assuming no increase in ticket prices, it is estimated that these types of 5G-enabled entertainment experiences can generate a 2% increase in ticket sales over the next 5 years. This translates to 7.2M incremental admissions annually, resulting in a potential $110M+ revenue opportunity from ticket sales & corresponding concession purchases.

Creating movie magic 

Of course, 5G is a key component of creating new experiences that will transform a trip to the movies. But it’s not the only piece of the puzzle. Bringing all the required innovations and capabilities together seamlessly to deliver a new experience for moviegoers requires coordination across a broad and complex partner ecosystem.

Creating excitement among consumers and educating them about the new experiences before, during and after the movie theater is only the first step. Disrupting the cinematic experience by engaging with the consumer throughout the end-to-end connected experience requires studios and theaters to innovate, operate and market differently. Being able to pilot new ideas quickly is crucial and there are several key determinants that must be factored into this pivot.

Firstly, public safety and of course security and privacy concerns, are critical in the upfront considerations of the design and implementation of these new experiences. Additionally, the right partners who can work with pace and agility to develop concepts into scaled applications will be critical to the success of these new movie-going experiences. 5G opens up entirely new potential for entertainment. It’s not a matter of if, but when these connected experiences are available.

The technologies are feasible, and the network capabilities are ever closer. Get excited, change your perspective…coming soon to a theater near you!



Jefferson Wang

Managing Director, Global 5g Strategy Lead, Technology Strategy & Advisory (TS&A) – Accenture


Jennifer McLaughlin

Managing Director – Accenture Communications, Media, Technology and Innovation


Jeff Bauer

Group Director of Client Innovation

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