This trend is reflected in the numbers. Streaming platforms such as Netflix, Max, Disney and Amazon Prime earn more than movie theaters. By the end of 2023 alone, video-on-demand companies reported revenues of 25.7 billion pesos while movie theaters reported 14.6 billion pesos, 11.1 billion pesos less, according to data from the consulting firm Statista.
The glaring revenue gap between streaming and theaters stems from low attendance at movie theaters. Chains like Cinemex and Cinepolis sold 218 million tickets at the end of last year, a 19.9% increase compared to the 181 million tickets in 2022, but still below the more than 300 million tickets they sold before the pandemic.
“We see that sometimes cinemas have a sales increase for certain films, but this does not mean that they are recovering. On the contrary, they show great difficulty in getting people to return to the cinema and this is because streaming is now the way to watch films and series,” said Radamés Camargo, an analyst at the consultancy The Ciu.
The cost of going to the movies
The cost of going to the movies is one of the main reasons why cinema is failing to regain its box office profits and instead helps position streaming platforms as the main means of audiovisual entertainment.
Ticket prices went from 45 pesos in 2019 to 80 pesos on average this year, almost double. Added to this price are the costs of food and drinks, which have also seen increases. A consumer ends up paying more than 400 pesos for a trip to the cinema.
While a streaming platform like Max costs 99 pesos and is valid for one month to access various movies and series. There is also the possibility of watching film premieres in less than 90 days. Platforms like Max since its launch allow subscribers to enjoy film premieres on their platform only 45 days after they have been shown in theaters. And now many users prefer to wait a while to watch a premiere on the platform to avoid expenses.
This phenomenon occurred with the film Furiosa, from the Mad Max saga, released in May. Expectations of success in terms of revenue collection were high, but the results were below expectations. In the United States, the film grossed only $150 million of the $160 million it cost to make. However, now that the film is available for streaming, it has become one of the most viewed films in digital format.
Since the pandemic, spending has become the main reason for Mexicans to buy or dispense with a product because inflation has shown a slowdown.
“In markets like Mexico, the issue of price is a big hit for the pocketbook, and we see that the cost of movie tickets has gone up and even shows a clear segmentation or discrimination, such as access to special rooms that allow for a better experience of the film, but in exchange for a higher cost,” explains the specialist.
They bet on nostalgia
Cinema chains have looked for various options to get back on track against streaming, but so far it hasn’t worked. Cinépolis, for example, was the chain that wanted to compete with Netflix by opening its own streaming service where users could buy a movie, but the strategy didn’t work and the company was forced to close in May of last year.
Now they are taking a different path: nostalgia. Cinemex has begun showing cycles of classic films such as The Godfather and soon Interstellar, whose films were huge box office hits at the time.
But Radamés Camargo believes that although the strategy is interesting, it is not enough to increase its income and especially to face streaming platforms, who also have these titles in their catalogs.
Video-on-demand companies, although they are in a difficult position to pay more users due to their constant changes in business model, continue to represent a more affordable option for accessing various film titles.
“I see it as very difficult for cinemas to return to the 2019 figures because the circumstances are very different with just streaming, but perhaps with their strategy of showing classics again I can help them maintain the pace they have now,” said the specialist.
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