By Paul Nyasulu

The recent premiers of Fatsani and Hibrow movies rocked almost every big screen fan in the country, and indeed couldn’t come at a better time.

On sad note some of the premiers took place in conference auditoriums due to lack movie theaters. Movie theaters are buildings that have auditoriums speciafically madefor viewing movies for entertainment.

There are many types of movie theaters but the major ones fall into the following categories- firstly are the first run theaters which typically show major films at their time of release, secondly are the second –run theaters which specialize in movies that have already been shown by second run theaters, and thirdly are the drive –in movie theaters in outdoor areas which show films on large screens to viewers who park and watch from their cars.

 Malawi is said to be among several African countries that are most under-served in the world of movie theaters.  A UNESCO report on African movies states that there is only one Movie Theatre per 787,402 people on the continent and of course there is zero in Malawi.

The report however states that movie theatre industry could create over 20 million jobs and contribute $20 billion to the continent’s combined Gross Domestic Product. Studies have found that Movie Theatre industry contributes to the achievement of the UN’s Sustainable Development Goals (SDGs). 

For example, SDG 8 focuses on decent work and economic growth, where creativity and innovation are indispensable – the theatre industry calls for creativeness (scriptwriter) and technical skills (cameramen, sound engineers).

So why is the movie theatre industry not flourishing in Malawi? Back in the days the country used to have movie theatres in the name of Apollo Cinema in down town Blantyre, 5 Star Drive–In near Money men in Blantyre and another Drive – In in Lilongwe. Siphiwe Lino actress from the movie Hibrow contributes the death of movie theatre industry in the country to failure by theatre owners in meeting consumer needs and their poor customer service.

She cites poor equipment used to view the movies, the notion of showing old movies, showing poor quality and/or pirated movies as some of the main factors that made movie goers to stop patronizing movie theatres. Malawi has untapped market for cinema industry.

However, movie theater owners in the country seems to fall short of the right business models to sustain the industry. Movie theaters are built around the notion that when a new show is released to the market, the movie theater then has the right to allow audience to view this movie.

Normally the movie theater does not actually purchase the movie that they are showing, but instead they enter into a deal with the production companies that made the movies. In between the production company and movie theater there is a distributor. 

The parties work on a process known as “Split the Gate” in which the movie theater has to give a portion of  ticket they sell to the production company of each movie through the distributor.

The distributor will get a good portion of each ticket and the movie theater will take the reminder. In most case scenarios the percentage will be around half of the ticket price. For example, if your ticket is MK 800 (US$10), then MK400 ($5) will go the movie distributor and MK400 (US$5) will go the movie theater. Half of your movie ticket cost that goes to a movie theater caters only their overhead expenses.

The main movie theater expenses include; splits paid to movie owners, wages and salaries paid to staff, marketing and promotion, land purchases or leases, building and equipment, energy cost and utilities.

So you can imagine that for a movie theater to give away half of its revenue can be difficult. Well this has been the typical business model of Malawi Movie Theaters hence their downfall.

Here some of the strategies and business models our movie theaters might have adopted to stay in the industry and keep us rocking with latest box office shows until today.

Firstly, movie theaters should first conduct surveys of local communities to determine what kinds of movies people watch.

Secondly, movie theatres will to focus on customer service including exciting attendees with latest releases. Movies goers would not want to go to a theater and watch antic movies like Coming to America 1, Missing in Action and Terminator.

Movies goers would want to go to a theater that has all the newest and best movies. In order to get new releases a movie theater would have to negotiate the best deals with movie creators.

The negotiation hinges on the number of people waiting for the release, the overall costs to produce the movie, and how much money the movie creators are expecting to make.

Secondly, our movie theater industry should leverage on emerging technology to fend off competition from home entertainment theaters such as the DSTV Box offices. 

Many players in the industry believe that technology is main factor in driving consumers to the theaters. The famed 3-D content cinema for instance brings together laser projection, beautiful screen, booming sound, a big screen experience which cannot be replicated at home.

Here the differentiation is a powerful competitive advantage for movie theaters and it may be key to survive the threats from home theaters.

There is just something about the emerging technological equipment which attracts movies goers. It is likened to analogy in which everybody has a kitchen in their house, yet they still go out to eat.

As one movie fan puts it, movie goers need wonderful, pin sharp projection that knocks their socks off. Movie goers need loud sound that can be felt in their chests.

They also need to laugh, cry and be scared with an audience of strangers. That can happen only with latest technological equipment that brings anticipation as the lights drop in the theater.

Thirdly, movie theaters would have to pay attention to concessions and dine – ins. Dine-Ins and Concessions such as popcorn, snacks, and soft drinks at movie theater can be largest source of profits.

Why? Concessions and fast foods can be marked up at very high price than the market price. For example, popcorn and coca cola can be very inexpensive for a theater owner to purchase but can be sold to moviegoers at higher price than its wholesale value.

Fourth is the subscription business model in which moviegoers buy passes valid for certain amount of time that allows them entrance to number of movies at theater.

Fifth, movie theaters would have to promote and market their products vigorously to compete with other forms of entertainments for time and customer attention.

The sixth strategy calls for theaters to partner with other stake holders in the community to offer series of screening on a particular topic.

Seventh is the funding issue –the theater owners will have to lobby for government financial support through their parliament representatives or caucuses.

In South Africa for example besides offering up to 70% funding to the industry the government offers tax rebate to the industry on equipment and facilities.

After all, if the industry begins thriving and bearing fruits the government could be one of the major beneficiaries.

For instance, the movie theater industry brings the much needed government income in form of taxation including the government sweetheart Value Added Tax (VAT).

The government will also need to set up an organization such as a Movie Commission tasked withsustaining the industry and connecting movie theater owners with major international funding institutions such as the European Union, the Canadian Alter-Ciné Foundation, Hubert Bals Fund, World Cinema Fund and many more.

The local wannabe theater owners would also have to look into theater chains that offer franchise opportunities, in which they can put up the money to open in the chain’s name. Movies Theater chains like the USA Alamo Drafthouse Cinema and the South African Ster-Kinekor offer great franchise opportunities.

The South African Ster-Kinekor is said to be already mulling the rollout of a franchising model in a neighbouring country Lesotho.

Lastly, independent movie theaters can generate more revenues by renting out some of their space for events like birthdays, weddings and meetings. So potential movie theater investors contact Malawi Investment and Trade Centre (www.mitc.mw) to get the sneak peak of the investment requirements because we can’t wait to see and hear your pre-movie adverts especially that most famed and exciting one ” Coming soon to a theater near you”.

About the Author: Paul Nyasulu is an adjunct faculty at Malawi Institute of Management. He often writes on investment opportunities in leisure industry

Feedback: paulnayasulu@gmail.com

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