There’s been a lot of fervent speculation about Ster-Kinekor, a cinema chain in South Africa that recently announced its downsizing. Based on the response, the news has been met with a sense of doom as though the concept of cinema appears to be on its last legs. However, as devastating as it is to the people affected by the restructuring, the fall out has been left to public scrutiny. Adopting a negative forecast for cinema, one slant that hasn’t been given the light of day is that Ster-Kinekor is simply cutting the deadwood and streamlining their operations for greater efficiencies and profitability.

After going into voluntary business rescue in January 2021, it seemed miraculous that they made it through the pandemic years, considering just how detrimental the lockdown and need to shut down cinemas was over this unprecedented time. Somehow managing to hang on after months of little to no cinema attendance, UK’s Blantyre Capital and Cape Town-based Greenpoint Capital invested R250 million, enabling the group to save nearly 800 jobs as it exited business rescue.

More recently, however, they announced that nine cinemas in Gauteng, Kwazulu-Natal and the Western Cape would be closing and a third of their workforce would be laid off. This decision was motivated by “challenging economic environment, load-shedding, financial constraints, and the impact of the Hollywood strikes” according to BusinessTech.

Something of a shock to many patrons, especially those who may have become used to having a cinema within their immediate vicinity, the news has been met with much unfiltered speculation. Some have made constructive suggestions on ways that the cinema could adjust their offering in order to be more relevant and cost-effective to lure patrons back to the big screen. While similar suggestions have been made in the past, the cinema giant continues to forge ahead seemingly undeterred.

Others have simply continued to lambaste the chain for the high price of confectionery items and movie tickets, which seem quite ludicrous given the current financial climate. When contrasted with the cost of a monthly subscription to a streaming service in this age of belt-tightening, it’s understandable that going to the cinema would become a more infrequent activity. In spite of trying to employ more next-gen gimmicks and cinema technologies that one simply can’t replicate at home to compete with streaming service offerings, it just seems that the business model has evolved to breaking point.

Occupying malls where there’s naturally more foot traffic has typically been a good platform, enabling moviegoers to enjoy the big screen experience and parents to drop their kids off in the safe space of the cineplex while they go shopping. Now mostly catering to spectacle with superhero and animated movies dominating, escalating prices with 3D, IMAX or special VIP cinema treatments. It just seems like a case of going full steam ahead in blissful ignorance when so much sentiment indicates that radical and reflective change is needed.

And while the recent decision to close several cinemas has been met with opposition, creating a negative spin-off in the process, one thing people aren’t considering is that the group is simply restructuring and streamlining for the future. Being the biggest cinema chain in South Africa, Ster-Kinekor has had over 50 cinemas across the nation, which means that they may just be refocusing on their flagship operations. Having cinemas close isn’t anything new with Cavendish Nouveau, Waterfront Nouveau and Longbeach Mall just a few of the sites that have closed in Cape Town alone. If you’ve been to one of their cinemas recently, you’ll notice that there’s been a concerted effort to streamline the process and reduce the need for staff to be on standby, getting your ticket for the movie and a ticket for popcorn and coke.

It does seem as though staff are now becoming custodian-orientated and sparser rather than being required to service every little corner of the cineplex. So this step backwards could be seen as cutting deadwood as well as adjusting their business model for the future to ensure their ongoing survival. If these cinemas were underperforming, perhaps they are simply cutting them because they aren’t in the best areas for future growth, given their price point.

So as much as moviegoers are up in arms, it isn’t a case of the beginning of the end, but rather a redressing of current business practice. Independent cinemas like the Labia Theatre continue to thrive on a lower price point model, which has attracted younger audiences in recent years, thanks to their adjustment in terms of programming to offer more commercial titles as well as arthouse films. Coming in at roughly half the price, they do serve a different market but show that this price point model is feasible.

Ster-Kinekor have introduced a cheaper movie ticket option for blast from the past productions, which it’s been punting recently to see how the market responds. But without added leverage from media or clout of yesteryerar, it may be a trickier campaign model to fulfill than anticipated. Getting moviegoers to think of going to the cinema more readily will require a rewiring in terms of culture, and cinemas may have to increase their versatility as relying on big payday blockbusters to draw in the crowds may not be as easily achievable as in previous years, given the knock-on effect of disruptive changes to the film industry and traditional distribution model.