For nearly 15 years, Australian-born Cameron Mitchell has been in the thick of one of the most dynamic markets in the global cinema industry: the Middle East. As CEO of Majid Al Futtaim’s Vox Cinemas, Mitchell had a front-row seat to witness—not to mention a hands-on role in shaping—a market that in the last decade has seen explosive growth and the creation of some of the most luxurious cinemas in the world.
This year, Mitchell returned to Australia—a country with a deep love of cinema and a long, masterpiece-filled history of local films—to serve as the executive director of the National Association of Cinema Operators (NACO), the trade body representing cinema owners in Australasia. Speaking to Mitchell from the other side of the world, Boxoffice Pro got his insights into these two geographically disparate markets.
In the early days of the pandemic, it seemed like Australia and New Zealand were doing pretty well in keeping things contained, compared to the rest of the world. But, of course, people can’t go see movies if there’s nothing to see. How have the last few years been for the cinema industry there?
Everyone, globally, really struggled during Covid. The Australian box office normally annualizes at around that AU$1.2 billion mark (AU$1 = US$0.6677). And New Zealand is about NZ$200 million. That’s 3.4, 3.5, 3.6 admits per capita. The market has always been incredibly strong. Cinema, in Australia, is an important part of our culture. Village Roadshow and Event Cinemas—[known as] Greater Union back then—invented [the VIP concept] Gold Class. We had this massive boom of cinemas in the ’80s and ’90s. We’ve always grown up with cinema.
Like all countries, we were decimated by Covid. [There were] a myriad of different factors: closures, capacity restrictions. On top of that, we had no content. There was some Australian content that was released, but everyone was so nervous about coming out [to the cinema]. The direction from the government was, “Don’t go out. Don’t go to common spaces.” What we’ve now seen globally is that cinema, because of the spacing and the air-conditioning and the investments that we’ve made, is one of the safer environments.
[In] 2021, we did basically half the numbers of 2019. Australia was about AU$600 million and New Zealand was about NZ$100 million. Fortunately, this year, as with many countries, we’ve seen this massive spike in return to cinemas. If you look at the comparative period in 2021, in Australia we’re roughly 80 percent ahead of 2021, as of the end of July. In New Zealand, about 50 percent up. Both countries, as of the end of July, are ahead of the full-year 2021 numbers, which is obviously really encouraging. Top Gun: Maverick, in Australia, has done almost AU$90 million. You’ve got Minions, Thor, Batman, Doctor Strange—all these films that are now in the top 50 films of all time. Elvis’s gross in local currency is AU$32 million, which makes it the fourth highest-grossing Australian film of all time. Elvis was made partially in Australia and funded by many Australian government organizations, as well. We’re really happy that cinemas are back. We’re showing that, with the right content, people are racing back to the cinemas. So it’s a really positive time.
One of the common threads we’ve seen during the pandemic is local films helping to keep cinema markets afloat. You said people were worried to go out to anything—did box office for local films pick up?
If you go back to 2015, we had a great year for [the local] Australian box office, which was about AU$80 million. 2021 was AU$71 million, so it was almost at that peak level. As a comparison, in 2019, the Australian box office was just under AU$23 million. In 2021, we were $71 and a half; three and a half times the 2020 results, and more than one and a half times the 2019 results. There was definitely a spike, and we’re so happy to see that Australian content on-screen.
I’ve been based in the Middle East for the last 16 years, working in exhibition and distribution. I’ve come back and joined NACO as executive director, and one of my early focuses is to work with all the different creatives in Australia. We’ve got an amazing organization, Screen Australia, which is funded by the federal government. Screen Queensland, Screen Producers Australia. There are all these different organizations that are full of amazing Australian talent that are really focused on local production. Box office [for Australian films] in 2019 was about AU$20 million, from about AU$80 million in 2015, and AU$72 million last year. There’s a massive opportunity, I feel, for Australian productions. There are huge incentives for creatives to film content in Australia. The tax rebates are amazing. If you look at the talent that’s come out of Australia—actors and actresses—we’ve got amazing talent. I think we’ve got all the right ingredients for Australian box office to continue to boom, and I see it hitting that AU$100 million mark quickly. Everyone’s really focused on that healthy local Australian market. Not because of Covid. Just because we have a lot of talent and people love local stories.
On the exhibition side of the industry, what’s the balance between independent/art house cinemas and larger chains in Australia and New Zealand? Were they affected differently during Covid?
The market here is very collaborative. In Australia and New Zealand, there are roughly 2,800 screens between the two countries: 2,300 in Australia and about 500 in New Zealand. Yes, there are major chains: Event [Cinemas], Hoyts [Cinemas], Village [Cinemas], Reading [Cinemas]. But there’s a really strong independent market as well. From a box office perspective, it does vary in regard to market share, depending on the film. We have a lot of regional cities in Australia. And there are a lot of local [cinemas]. We always joke that the cinema manager is more popular than the mayor in each town, because he or she brings happiness to the town.
During Covid, the government was supportive in a few different ways. There was a job-keeper program where they gave, basically, subsidies based on wages paid by each company. The government went further than that and gave a contribution to independent cinemas only, to support them during those challenging times. The contributions didn’t extend to the major chains, unfortunately. But the government was supportive. And we now have a new arts minister, who seems to be very focused on the arts scene and how we can support local content and the arts industry. From that perspective, I think the ecosystem is very healthy.
What’s the conversation around premiumization in Australia and New Zealand? Is there that same rush to invest in newer, bigger concepts like we’re seeing in the United States?
Gold Class, the premium VIP experience that now exists globally, was invented by an Australian cinema chain back in the late ’80s, early ’90s. We’ve always been very focused on the experience of going to cinemas, and the standard of cinemas in Australia is exceptional. There’s always been a focus on premium large-format screens, on the VIP experience. Or, recently, on kids’ experiences and [immersive cinema] concepts.
Technology, from an ecommerce perspective, is now seamless. You easily book your ticket online. You can order food online. You get a follow-up email before you attend [and another] afterward to see how the experience was. There are massive loyalty programs embedded throughout most of the Australian chains. If there’s an issue, you get the chance to give feedback, and they can fix it really quickly.
The Australian exhibitors have always been very innovative. I think, moving forward, that trend is going to continue. Don’t get me wrong. The Australian industry, like all industries, has its challenges. We’ve just had recent wage increases. High inflation. I think we have the lowest unemployment rate in 50 years. So there’s a desperate need for more people in Australia, because we don’t have as many international students and whatever else coming into the country anymore. We absolutely do have our challenges. But, again, we are focused on the experience of cinemagoing, and I think the numbers this year—take your pick! Minions, Elvis, Maverick—I think Maverick’s now the number three or four film of all time in Australia. When we do have the right content, people are racing back. We have an Imax cinema in Melbourne, which is doing demonstrably better than the rest of the circuit. It’s doing incredibly well.
Moving forward, you won’t be able to do average. You’ll need an exceptional experience. Otherwise, people will visit another venue. Perhaps some countries have been slow to adopt. They’ve had that old-style massive box with seats, a generic experience, no service and no food. We all now have really high expectations in regard to anything that we do. I used to joke about coffee; people used to put Nescafé in cinemas, and [they’d] say, “Oh, people don’t want coffee in cinemas.” No, they don’t want a Nescafé coffee. They want a barista-quality coffee.
As long as the experience matches or exceeds expectations, and as long as it’s as good as the best in class, [we’re doing well]. When we’re developing ecommerce platforms, we compare them to the best ecommerce platforms in the world, not to the best competitor’s ecommerce platform. I think that’s really critical. Same with F&B. When our industry first [started to] focus on F&B, it would be a microwave pizza and maybe some french fries, if you’re lucky, and a hot dog. Now the caliber of F&B in many of our VIP cinemas is as good as what you can get in restaurants. That’s what people expect. “Charge me what you need to charge me to make that happen, but I want an exceptional experience.” That’s the focus moving forward. Those that don’t adopt and evolve and are happy with average, they won’t be moving forward. I think market share will drive towards the better experience, the better premium large format, the better service, the better F&B.
Australia and New Zealand are both highly multicultural countries. How does that affect the programming ecosystem? What does the market look like in terms of non-Hollywood international imports?
Australia is less than 250 years old, as a country. If you go into any city—depending on which city—there is a massive mix of different nationalities, which is why our country’s so amazing.
The international content is important, but you see it in clusters. You might see, in parts of Sydney, more of a focus on Chinese content. Other parts might be focused more on Indian content. One thing that Australian chains do incredibly well is that they’ve really committed to exceptional talent within the content and film-programming teams. The programming is not generic. It’s intimate. It’s down to a per-screen, per-location sort of focus. You look at two cinemas that might be five kilometers apart with similar screen counts, and the schedule is totally different based on what [the programming team] knows [about audience demand]. That reflects on the data that they’re gathering from loyalty programs to see what’s popular and what’s not. There’s no generic “We’ll just play [a basic program], and hopefully people come along.” It’s really focused on what’s going to be most successful. It does vary, and we are very focused on ensuring that you see great content in our cinemas. We’ve done sports, we’ve done concerts, we’ve done opera, we’ve done all those different things. It’s depending on the location as to how much of that comes back again.
Given your experience in the Middle East, I’d be remiss not to ask you about your thoughts on that market. It’s been growing so rapidly—where do you think it will be in five years?
The Middle East is incredibly different from most international markets, in that you have a lot of natural advantages that suit cinema. First of all, for several months of the year, it’s really hot and you want to be indoors. You can’t be outside playing sports. There’s a high disposable income in most of the Middle Eastern countries. [They’re] very family-focused. There’s less focus on alcohol. From a cost-based perspective, labor costs are significantly lower.
And the experience is amazing. The look factor! Cinema in the Middle East is [about going to] the cinema more than the movie. In the U.S., you might go to watch Maverick. In the Middle East, people go to the cinema and look to see what’s on. They’ll find the best available, and that’s what they’ll go and see. Many of those factors are never going to change. It’s always going to be hot. And there’s always going to be a huge focus on family. Because of heat and family, there’s always this massive focus on shopping malls, and entertainment and food are really strong anchors for malls.
[There have been] massive investments in the experience within cinema. All of the different premium large formats. At Vox [Cinemas], we have a Michelin-starred chef basically catering to our VIP cinemas. We had massive Imax screens, we had 4DX, we had [kids concepts], we had business-class concepts. It’s part of the habit. People are really desperate to be entertained. I see it continuing as it has. UAE [used to be] the biggest market; Saudi Arabia opened in 2018 and in the last few years has exceeded the UAE. It’s been incredibly busy, and it’s growing. Saudi will become a billion-dollar market. It just depends on when.
The Middle East is quickly becoming a really critical territory in the global landscape. More than ever, with pressures in other territories and countries, we really do need other territories to step up to ensure that the global box office is still growing in a healthy way.
That habitual moviegoing is so important.
It’s something I’ve thought about a lot. We always talk in the industry about how whatever generations are not coming. Gen Alpha, Gen Z, millennials, whatever. I love seeing the different forms of content coming to cinema. It’s not only about the food, the service, the technology, the seats, the screen, and all that stuff. Today, what happens in the cinema is not negotiable. It has to be amazing. But, in addition to film, you’re seeing anime. You’re seeing concerts. You’re seeing sports.
[The cinema industry is] working really collaboratively with distribution. The sector is critical to the art and the culture of the country. I think we’re going to see that cinema is going to rebound and continue to see great numbers, subject to exhibitors investing in experiences [as they] have done in Australia and New Zealand. It’s so mission critical. People won’t go to an average experience. They really want to see something special.