According to reports reaching the BMA news desk, Ster-Kineko – one of South Africa’s large cinema franchises – is slashing jobs and closing cinemas.
Last month, Ster-Kinekor announced plans to retrench 236 employees in a restructuring effort in the face of declining attendance numbers. It blamed the challenging economic environment, load-shedding, and the impact of the Hollywood strikes for substantially lower cinema attendance.
The company said, “Ster-Kinekor Theatres has had to review its cost structure to ensure the continued survival and sustainability of its business.”
The company also revealed plans to shutter up to nine cinemas in South Africa’s most populous provinces. These closures will happen gradually over the next six months, and it is also reviewing plans to close another eight cinemas.
Although cinemas globally face increased competition from online streaming and improved home theatre systems, the market is still growing.
The latest estimates suggest that the revenue in the global cinema market is projected to reach US$85.16 billion in 2024, Statista Market Insights reports.
The growth is expected to continue at 5% per year, reaching a projected market size of US$109.40 billion by 2029.
The number of cinema viewers is expected to reach 1.9 billion by 2029. This means the cinema industry is thriving globally.
This growth is fuelled by a changing business model, where cinemas focus on premium experiences.
Movie theatres attract clients by offering them luxury recliners, in-seat dining, and personalized services.
Many cinemas also diversify into interactive events and engage in aggressive social media campaigns to enhance the overall experience.
Going to the cinema still offers an unmatched immersive experience to movie lovers, which cannot be replicated at home.
Local cinemas, including Ster-Kinekor, have also dabbled in these strategies to try and save their business.
However, it has yet to overcome local challenges like load-shedding and pressure on consumer spending.
South African households are under pressure, and most people need more money for a premium cinema experience.
Therefore, like many other businesses, Ster-Kinekor and other cinemas are victims of South Africa’s struggling economy and poor electricity supply.
