Can Canadian cinemas recover in 2022 or will people prefer to stay at home?

Many sectors in Canada have experienced tough times lately and will be looking to bounce back in 2022. The entertainment industry has arguably been the sector which has been hit the hardest and which will be keen to return to an upward trajectory in the future. 

But what has been behind the drop entertainment in Canada has seen lately? The strains of prolonged enforced closures and social distancing have undoubtedly been a major factor. They meant many entertainment niches had to scale down their operations for a period of time, compared to how they would normally function. 

Canadian cinema hit hard in recent years

Although this cut across many Canadian entertainment niches, the countries cinema industry was affected particularly. Reduced operations meant considerably restricting the number of tickets that could be sold for individual screenings. This in turn significantly reduced the profits made by Canadian cinemas and the revenue they generated.

In addition, the impact of measures like this on the film industry as a whole was substantial. Due to cinemas and movie theatres closing, the global box office revenue has dropped by billions of dollars across the last two years. It also meant that many blockbuster movies had to either push back their release dates or switch to a new format entirely, often skipping a cinema release altogether. 

Interestingly, while this had a significant impact on the big-budget, blockbuster films, it actually created a space for independent cinema to flourish. As a result of the reduced availability of high-budget releases, many independent films received much wider exposure. 

These challenging conditions also brought about a shift in focus to new content delivery platforms, with many releases going straight to streaming services

Cinema not the only entertainment niche struggling 

However, the cinema industry in Canada is not the only industry that seems to be struggling with an uncertain future. In fact, the entertainment industry as a whole has been significantly disrupted due to how the last few years have unfolded. 

The casino industry is one example of this and has seen a large-scale switch to online play over in-person gaming over the last two years. Although this shift had been underway for some time, with more users than ever preferring interactive live casinos over physical locations, recent events have significantly hastened this shift.

What is the future for Canadian cinemas? 

Beyond these more immediate changes to entertainment in general, what does the future look like for Canadian cinemas? Will people still indulge in this favourite pastime, or will they prefer to stay at home? 

As early as December 2020, Canadian film executives were warning of a bleak future for the film industry if the government didn’t provide industry support.

Unfortunately, it seems like the government did not heed this call. Just over a year later, cinemas were one of the first industries to put employees on temporary leave in response to a new round of measures announced by the Canadian Government. 

As a sign of this, the popular nationwide chain Cineplex theatres has just announced plans to temporarily lay off around 6,000 part-time employees. Ontario is the hardest hit province, with around 5,000 of the 6,000 planned layoffs occurring there.

These difficult circumstances have occurred at a rough time for the industry as a whole, with the rise of online film streaming services making commercial conditions even more challenging.

Streaming services pose danger to cinema’s future 

The continued popularity of streaming services with modern audiences appears to be weighing heavily on the film industry as a whole. This competitive market now includes high-profile players such as Disney+, Netflix, HBO and a range of other platforms.

One unfortunate consequence of this shift is that these challenging commercial conditions will inevitably force in-person cinemas to increase their prices — particularly in response to inflation. This will likely only serve to push more individuals towards streaming services, particularly given the fact that a full month’s worth of streaming access will cost about the same as a single cinema ticket. 

Another interesting consequence of the rise of streaming services is that the simultaneous release of films in cinemas and streaming platforms might also serve to dilute the exclusivity that in-person cinemas have traditionally benefitted from. Previously, a distinction between physical and virtual cinemas had been maintained by timed release dates, which meant that streaming service users would have to wait longer to watch specific titles. However, with simultaneous releases now becoming more common, individuals might simply have less reason to choose in-person cinemas over their streaming platform of choice.

All in all, the cinema industry looks set to experience some challenging years ahead. Exactly how this will play out in the Canadian context, however, remains to be seen.

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