As movie streaming becomes a hallmark of contemporary life, traditional cinemas have to work hard to retain their audiences. Picture: ISTOCK

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THE cultural and creative industries have been acknowledged in the National Development Plan for their contribution to economic growth. But when it comes to the survival of traditional cinemas, even a commendation of this calibre won’t cut it.

Disruptive technology is rewriting the script of cinemas, featuring plots and players we would never have contemplated about a decade ago.

ShowMax, Netflix, FrontRow, OnTapTV.com and others — which stream movies via mobile devices, televisions and game consoles — are posing a serious threat to traditional cinema chains such as Nu Metro and Ster-Kinekor.

Cinemas are no longer the darlings of film distribution — most films barely break even at the box office. Rather, studios rely on DVD sales and, to a lesser extent, on-demand rentals, to recoup their investment. It is only because of the hype produced by high-profile film premieres that cinemas are part of the distribution process. The release of a DVD doesn’t elicit the same amount of excitement.

The US media and entertainment market — the biggest in the world — was estimated to have reached about $546bn last year, according to the 2013 Entertainment & Media Outlook by PwC.

According to a 2013 study by the National Film and Video Foundation, an agency of the Department of Arts and Culture, the South African film and television industry contributes R3.5bn annually to the economy.

In 1995, when the country first became a viable location for movie and television production, the industry provided jobs for about 4,000 people. This has now grown to about 25,000 people.

The viability of cinema chains is therefore critical, but is their existence sustainable?

When dealing with disrupters, the caveat lies in the way in which their traditional counterparts react.

When London taxi drivers went on strike after the emergence of Uber, the extensive media coverage — and Uber’s offer of a 50% discount during that period — resulted in an 850% increase in Uber subscriptions.

Rather than focusing on fighting the newcomer, the taxi drivers should have created a competitive app to leverage — and maybe even increase — their market share.

Understanding and responding to customers’ needs is critical to gaining and retaining market share. Dwindling audience numbers have clearly jolted cinemas into action.

While increasing ticket prices may have been necessary but possibly counterproductive, Ster-Kinekor’s introduction of a different level of experience through Cine Prestige seems like a smart move.

Moviegoers at these seven cinemas are treated to an exclusive VIP lounge, a delectable menu and luxurious leather recliners with fitted snack trays and refrigerated cup holders.

Though this does give Ster-Kinekor an edge over home cinema, they still face the challenges of losing monopoly over new movie releases and home theatre technology having become more advanced and affordable.

A recent price comparison by Mybroadband of watching four movies at the cinema in one month versus streaming the films at home revealed that OnTapTV cost R189, FrontRow R227, Nu Metro 2D R260 and Ster-Kinekor 2D R264.

Excluded from this comparison were the price of four Cine Prestige tickets, which would set you back R480, and ShowMax, which charges a mere R99 to watch a limitless number of movies.

When it comes to price, SA’s cinema chains cannot begin to compete with online movies.

For traditional cinemas, the consolation lies in the fact that people throughout the world — though their numbers are dwindling — visit the cinema for the unique experience it offers.

Whether the lure of the likes of ShowMax will soon have the credits rolling on this once-thriving industry remains to be seen.

In the meantime, though, the show must go on.

• Morar is senior principal at IQ Business.