Ster-Kinekor CEO Mark Sardi said rather than seeing streaming services as competitors, the movie industry sees an opportunity to collaborate.
Sardi told Business Day TV that the movie industry is uniquely resilient in the face of technological disruptions, as many believed the advent of streaming would mean the end of the traditional theatre experience.
“I don’t think there’s a streamer on the planet that makes money – all of them lose money,” he said.
According to IndieWire, Netflix and Hulu are the only two major streaming services that made a profit by the end of 2022.
Other major streamers like Peacock, Disney+, Max (HBO Max), and Paramount+ reported billions of dollars in losses in EBITDA.
Sardi said streaming services provide a partnership opportunity for companies like Ster-Kinekor, rather than competition.
“There’s going to be a whole host of consolidation in that space, and we treat the streamers as our friends, not the enemy.”
From an economic perspective, Sardi believes there is a longer-term benefit for the movie format, but the industry needs to be “part of the solution” – “don’t fight the streamers, partner with them”.
Post-pandemic, home viewers are more likely to place a higher value on movies they know were first released theatrically, opening up opportunities with streaming services.
Sardi explained that a movie or series premiering in theatres would be “stickier” than if released solely on a streaming service.
People expect streaming services to overtake the movie industry because of the difference in pricing.
The price people pay to watch one movie in theatres is often equal to or even more than a one-month subscription to a streaming service.
However, Sardi said the pricing for a theatre movie is comparable to the pricing at a restaurant, as consumers pay for the product and the experience.
He said Ster-Kinekor has also compared its pricing to international benchmarks and found that it averages around $5 while prices abroad average $10 to $12.
“That is cold comfort in a country that has its own unique challenges, but we still believe – relative to other forms of entertainment here in South Africa – we will remain relevant as long as we deliver good content, beautifully done, great moments at their greatest.”