UNDERSTANDING MILLENNIAL MOVIEGOERS a Data-Driven Playbook CONTENTS

WHITE PAPER

UNDERSTANDING MILLENNIAL MOVIEGOERS A Data-Driven Playbook CONTENTS

ARE MILLENNIALS THE FUTURE OF MOVIE-GOING? 03 THE MILLENIALS’ SHARE 04 WHEN DO MILLENNIALS GO TO THE MOVIES? 06 DON’T BE AFRAID OF MILLENNIALS 07 INVEST IN MILLENNIALS TO CAPITALIZE ON THEIR LOYALTY 10 WHO SAID MILLENNIALS WERE ALL THE SAME? 12 APPENDIX: SUPPORTING FIGURES 13

Bryan Smith, Chief Data Scientist

Dr. Smith has a B.S.E. degree in Biomedical Engineering and Mathematics from Tulane University and Masters’ and Ph.D. degrees in Applied Mathematics from Northwestern University in Chicago. He heads research in statistics, science, and analytics at Movio, concentrating on the development of new products that utilize Movio’s global moviegoer database to generate analytical insights.

2 ARE MILLENNIALS THE FUTURE OF MOVIE-GOING?

ARE MILLENNIALS THE FUTURE OF MOVIE-GOING?

Millennials, also known as Generation Y, are the generation commonly understood to be born between the early 1980s and late 1990s, now aged between 20 and 35. They are one of the largest generations in American history and are now moving into their prime spending years, making them particularly important to cinemas, studios, and advertisers.

The conventional wisdom has been that Millennials are not as engaged with the cinema industry as previous generations. As the largest aggregator of cinema loyalty data in the world, Movio is well placed to analyze Millennials’ behaviors at the movies, which is quite topical at the moment as recent research published by National CineMedia1 contradicted the above assessment. 20-35 YEARS OLD So in the end, what do we know about Millennials at the movies? Millennials are men and women How often and when do they go to the theater? aged 20 to 35 years old Which film genres do they prefer? Do they interact with cinema loyalty programs? How much do they spend on box office and concessions? Do they exhibit a consistent behavior as a group? Copyright © 2016 Movio Limited. All Rights Reserved. Ltd. International Group A company of Vista 1 ‘Now Showing: Millenials’ Movie-going Experience’, National CineMedia, May 2016

3 THE MILLENNIALS‘ SHARE

THE MILLENNIALS’ SHARE

To compare Millennial behavior with the movie-going audience as a whole, we selected a sample of 1,000,000 loyalty members between the ages of 14 and 80 31% from across the United States that attended at least one movie in 2015. First, we LOYALTY POPULATION consider the demographics of loyalty programs versus the wider population. As shown in Figure 1, middle-aged women (30-50 yo) are vastly overrepresented in Millennials make up 31% of the loyalty programs, particularly compared with teenagers. Millennial women are cinema loyalty population somewhat overrepresented, making up 17% of loyalty members but only 14% of the US population, whereas Millennial men are slightly underrepresented, at 13% and 14%. Overall, Millennials make up 31% of the loyalty population and 28% of the US population.

Interestingly, while women are more likely to join loyalty programs, length of tenure suggests that men are somewhat more likely to remain engaged, with Millennial men over 30 having spent ~24 days longer in the loyalty program than Millennial women. Figure 2 shows the average number of days active in the loyalty program for each demographic group. It’s important to note that the majority of the data analyzed for this research only goes back to 2014, so it is likely that the true average length of tenure for older moviegoers is higher. 24 DAYS LONGER Copyright © 2016 Movio Limited. All Rights Reserved. Ltd. International Group A company of Vista Millennial men over 30 spend 24 days longer in a cinema loyalty program than Millennial women

4 THE MILLENNIALS‘ SHARE

Next we consider the number of movies seen in 2015. In order to account for the fact that the number of days in the program is dependent on age, we prorate the number of movies for each member by the length of time in the loyalty program. As 6.2 shown in Figure 3, Millennials tended to average between five and seven visits, with men averaging about one visit more than women. As a group, Millennials averaged MOVIES ANNUALLY 6.2 visits in 2015, which is about 7% below the overall loyalty average of 6.6. They Millennials see on average were therefore slightly underrepresented at the box office, accounting for 29% of 6.2 movies annually box office spending while representing 31% of the loyalty population.

Interestingly, the number of visits drops off as the population moves through the 20s and begins to pick up again in the 30s, as Millennials under 25 average 6.5 visits, Millennials over 30 average 6.0, and younger members of Generation X (36-40 yo) average 6.2. This suggests that Millennials may be at an age where they’re going through a transition in their movie-going habits, and this is something to consider throughout the rest of the whitepaper. 29% Copyright © 2016 Movio Limited. All Rights Reserved. Ltd. International Group A company of Vista OF BOX OFFICE Millennials make up on average 29% of the box office

5 WHEN DO MILLENNIALS GO TO THE MOVIES?

WHEN DO MILLENNIALS GO TO THE MOVIES?

One of the major findings in the NCM report on Millennials was that the motivation Finally, we consider day of the week. As we noted in Breaking the Blockbuster Code2, for in-theater viewing is largely to satisfy their need for instant gratification for content. middle-aged moviegoers (30-50 yo) generally attend most often on the weekend, As shown in Figure 4, their behavior on opening weekend confirms this assessment, and young adults (15-30 yo) are particularly likely to take advantage of cheap Tuesday as greater than 47% of their cinema visits take place on opening weekend, which is deals or attend Thursday night film openings. Here the data confirms this finding, 12% greater than loyalty members as a whole. It also shows that men are much more with Millennials shifting their weekday preferences away from Tuesday and towards likely than women to ensure that they see a film as soon as possible. the weekend as they age, as shown in Figures 6a and 6b. 57% of cinema visits by Millennials under 25 take place during the weekend, 17% on Tuesdays and 11% Next we consider time of day. As above, Figure 5 suggests that Millennials are on Thursdays, whereas 66% of visits by Millennials over 30 take place during the undergoing a transition in their movie-going habits as they age, with nearly 60% weekend, 13% on Tuesdays and 9% on Thursdays. of visits by Millennials under 25 taking place after 6pm, but only 49% of visits by Millennials over 30. This can be compared with 42% of visits by program members overall.

OPENING WEEKEND BEFORE 6PM AFTER 6PM TUESDAYS WEEKENDS

Copyright © 2016 Movio Limited. All Rights Reserved. Ltd. International Group A company of Vista 47% 51% 60% 17% 66% 47% of visits by 51% of visits by 60% of visits by 17% of visits by 66% of visits by Millennials under 25 yo are Millennials over 30 yo Millennials under 25 yo Millennials under 25 yo Millennials over 30 yo on opening weekend are before 6pm are after 6pm are on Tuesdays are on weekends

2 ‘Breaking the Blockbuster Code: Audience Evolution Patterns Revealed’, Movio, March 2016

6 DON’T BE AFRAID OF MILLENNIALS

Animation Art-House DON’T BE AFRAID Christian OF MILLENNIALS Drama Dystopian Horror In order to better understand Millennials’ viewing habits, Indie we used our members’ movie-going history to divide Tentpole 325 major releases between January 1, 2014 and May Thriller 1, 2016 into eleven different clusters3. Figure 7 shows a Urban map of these eleven clusters, with the size of each circle Young-Adult Comedy representing the degree to which Millennials were over- or under-represented at a particular title.

Animation Art-House Christian Drama Dystopian Horror Indie Tentpole Thriller Urban

3 Animation: Zootopia, Inside Out, Minions. Art House: Birdman, Whiplash, Chef. Christian: Miracles from Heaven, War Room, Risen. Drama: The Hundred-Foot Journey, Joy, The Second Best Exotic Marigold Hotel Dystopian: Ex Machina, Sin City: A Dame to Kill For, 10 Cloverfield Lane. Horror: Annabelle, Ouija, Insidious: Chapter 3. Indie: Theory of Everything, Spotlight, The Imitation Game. Tentpole: Captain America: Civil War, Star Wars: Episode VII - The Force Awakens, Jurassic World. Thriller: London Has Fallen, Sicario, Taken 3. Urban: Straight Outta Compton, Ride Along 2, Barbershop: The Next Cut. Young Adult Comedy: How To Be Single, Ted 2, Trainwreck

7 DON’T BE AFRAID OF MILLENNIALS

REPRESENTATION OF MILLENNIALS PER GENRE VS ALL MOVIEGOERS

+47%

Compared with other demographic groups, Millennials are much more likely to see horror films (+47%), urban films (+23%), young-adult comedies (+18%), and tentpole (+13%) films, and significantly less like to watch dramas (-45%), indie +23% films (-52%), or art-house (-35%) movies. +18% +13% Art-house Dramas Indie Urban Horror Horror Tentpoles Tentpoles Copyright © 2016 Movio Limited. All Rights Reserved. Ltd. International Group A company of Vista Young adult comedies Young

–35%

–45% –52%

Over Representation Under Representation

8 DON’T BE AFRAID OF MILLENNIALS

It is also worth noting that Millennials’ genre preferences can change quite These shifts are probably driven by Millennials in their late 20s and early 30s beginning dramatically as they get older, providing further evidence that this is a transitional to have children and introducing them to the cinema. This hypothesis is supported stage. For example, Figure 8 shows the decline in horror film preference, and Figure 9 by the trend in the number of tickets purchased per visit, with Millennials over 30 shows the increase in preference for animated movies. Figure 10 shows that Tentpole averaging 17% more tickets per visit than Millennials under 25, as shown in Figure 11. films remain popular with the entire cohort.

EVOLUTION OF GENRE PREFERENCE

2 17% MORE TICKETS PER VISIT 20 Millennials over 30 yo buy

0 20 2 0 0

Horror Age Animatiom Tentpole

9 INVEST IN MILLENNIALS TO CAPITALIZE ON THEIR LOYALTY

INVEST IN MILLENNIALS TO CAPITALIZE ON THEIR LOYALTY

In order to better understand Millennial cinema spending habits, we looked at The price sensitivity of early Millennials even appears to carry over into 3D and both box office and concession spending at both the per visit and total monthly IMAX attendance figures. While the conventional wisdom is that moviegoers in their level. Unsurprisingly, we found that both per visit and total spending decrease as teens and early 20s prefer to see movies in 3D, as shown in Figure 15, there may teenagers move away from home and then increase as they gain more financial be price barriers that drive them to the 2D versions, as the peak 3D viewing years stability, with Millennials over 30 spending 17% more at the box office and 27% more are the late 30s, with Millennials over 30 choosing 3D over 2D 27% more often on concessions each time they visit, as shown in Figures 12 and 13. Despite their than Millennials under 25. Interestingly, as shown in Figure 16, the IMAX audience lower frequency, we see in Figure 14 that this results in average monthly spending is somewhat younger than the 3D audience, with a peak in relative attendance that is 8% greater. (overrepresentation) that is three years younger (32 vs 35). However, this may simply be due to the types of films that are released in each format, as very few family films are released widely in IMAX.

+17% +27% +8% +27% Copyright © 2016 Movio Limited. All Rights Reserved. Ltd. International Group A company of Vista BOX OFFICE SPEND CONSESSION PER MONTH PREFER 3D PER VISIT PER VISIT Millennials over 30 yo spend on Millennials over 30 yo choose Millennials over 30 yo spend Millennials over 30 yo spend average 8% more per month than 3D over 2D 27% more often than 17% more at the box office per visit 27% more on concessions per visit the under 25 yo the under 25 yo than the under 25 yo than the under 25 yo

10 INVEST IN MILLENNIALS TO CAPITALIZE ON THEIR LOYALTY

Millennials’ method of purchase also varies significantly as they age. Overall, Millennials are 32% more likely to purchase tickets online than the population as a whole. As shown in Figure 17, this is primarily driven by the behavior of Millennials over 30 who purchase online 21% more often than Millennials under 25. While these figures show that Millennials, particularly those under 25, are not +32% generally among a cinema’s most valuable loyalty members, it is likely that as they age, they will continue to increase their spending as long as they remain engaged BUY ONLINE with the cinema and its loyalty program. Millennials are 32% more likely to purchase tickets online Copyright © 2016 Movio Limited. All Rights Reserved. Ltd. International Group A company of Vista

11 WHO SAID MILLENNIALS WERE ALL THE SAME?

WHO SAID MILLENNIALS WERE ALL THE SAME?

We can now confirm that Millennials are clearly engaged with cinemas and their Interestingly, the gender differences in visitation frequency remain relatively constant loyalty programs, visiting on average 6.2 times a year and, spending nearly as much over the entire age range. The gap between women’s and men’s average tickets per at the box office as their proportion of the population would indicate despite their visit increases as Millennials age, presumably due to the fact that women would be limited financial resources. However, as cinemas and studios consider how best to more likely to take children to the movies. market to and engage with Millennials, it is important to understand that while they do share certain characteristics, such as an interest in franchises and a desire for Millennials’ genre preferences vary significantly with age as well. instant access to content, they are currently going through a transitional period in A Millennial under 25 is their lives and therefore may exhibit significantly different preferences and behaviors twice as likely to have seen a horror film as a Millennial over 30 depending on which stage of this transition they are in. 36% more likely to have seen an urban film We summarize our findings by highlighting some of the contrasts between younger (under 25) and older (over 30) Millennials, keeping in mind that the behavior of those 25% more likely to have seen a young adult comedy from 25-30 will fall somewhere in between. 13% less likely to have seen an animated film Millennials under 25 during their time in a cinema loyalty program. visit the movies on average 8.5% more frequently than Millennials over 30

purchase 15% fewer tickets Finally, the timing of their visits shifts, from primarily night sessions (60%) to a majority (51%) before 6pm. Weekend attendance increases from 57% to 66%, with the spend 22% less on concessions each time they visit majority (5%) of that increase coming on Saturdays, while attendance on Tuesdays Copyright © 2016 Movio Limited. All Rights Reserved. Ltd. International Group A company of Vista spend 7% less overall and Thursdays falls from 17% and 11% to 13% and 9% respectively. So while a Tuesday night horror screening and a Saturday afternoon family film will both appeal are 18% less likely to purchase tickets online. to Millennials, they will appeal to very different subgroups within the generation, and it is important that marketers keep this in mind.

13 SUPPORTING FIGURES

FIG. 1 DEMOGRAPHIC REPRESENTATION FIG. 2 TIME IN LOYALTY PROGRAM FIG. 3 NUMBER OF VISITS IN 2015

1.8 700 7.5

1.6 650 7.0 1.4

600 1.2

6.5 1.0 550 Days 0.8 500 6.0 % of Population 0.6 Prorated Number of Visits Prorated 450 0.4 5.5 400 0.2

0.0 350 5.0 20 30 40 50 60 70 20 30 40 50 60 70 20 25 30 35 40 Age Age Age

Loyalty Women Women Women Loyalty Men Men Men US Women US Men SUPPORTING FIGURES

FIG. 4 VISITS ON OPENING WEEKEND FIG. 5 VISIT TIMES

Women 65 Before 6pm Men 54 After 6pm

60 52 55

50 50

48 45

46 40 Percentage of Total Visits of Total Percentage Visits of Total Percentage

44 35

42 30

40 25 20 25 30 35 40 20 25 30 35 40 Age Age

FIG. 6A WEEKEND VISITS (FRI-SUN) FIG. 6B TUESDAY AND THURSDAY VISITS

70 20 Tuesday Thursday

68 18

66 16

64 14 62 12 60

Percentage of Total Visits of Total Percentage 58 Visits of Total Percentage

56 8

54 6 20 25 30 35 40 20 25 30 35 40 Age Age SUPPORTING FIGURES

FIG. 7 MILLENNIALS VIEWING HABITS

Animation Art-House Christian Drama Dystopian Horror Indie Tentpole Thriller Urban Animation Young-Adult Comedy Art-House Christian Drama Dystopian Horror Indie Tentpole Thriller Urban Young-Adult Comedy SUPPORTING FIGURES

FIG. 8 PREFERENCE FOR HORROR FIG. 9 PREFERENCE FOR ANIMATION FIG. 10 PREFERENCE FOR TENTPOLES

10 30 50

8 25 45

6 20

4 15 Percentage of Total Visits of Total Percentage Visits of Total Percentage Visits of Total Percentage

35 2 10

0 5 30 20 25 30 35 40 20 25 30 35 40 20 25 30 35 40 Age Age Age

Women Men SUPPORTING FIGURES

FIG. 11 AVERAGE TICKETS PER VISIT FIG. 12 AVERAGE BOX OFFICE SPEND PER VISIT

Women 2.8 24 Men

2.6 22

2.4 20 US Dollars ($)

Number of Tickets 2.2 18

2.0 16

1.8 14 20 25 30 35 40 20 25 30 35 40 Age Age

FIG. 13 AVERAGE CONCESSION SPEND PER VISIT FIG. 14 TOTAL MONTHLY SPEND

7.0 16

6.5 15

6.0 14

5.5 13

5.0 12 US Dollars ($) US Dollars ($)

4.5 11

4.0 10

3.5 9

3.0 8 20 25 30 35 40 20 25 30 35 40 Age Age SUPPORTING FIGURES

FIG. 15 3D ATTENDANCE (WHEN 3D IS AVAILABLE) FIG. 16 RELATIVE 3D AND IMAX ATTENDANCE FIG. 17 ONLINE PURCHASES

24 180 150

140 22 160

130

20 140 120

18 120 110

100 Relative Proportion Relative Relative Proportion Relative Percentage of Visits Percentage 16 100

14 80 80

12 60 70 20 25 30 35 40 20 25 30 35 40 20 25 30 35 40 Age Age Age

Women 3D Men IMAX ABOUT MOVIO

Movio is the global leader in marketing data analytics and campaign management software for cinema exhibitors, film distributors and studios. A company of Vista Group International Ltd (NZX/ASX:VGL), Movio’s mission is to revolutionize the way the film industry interacts with moviegoers. Movio maintains real-time, authoritative data on the loyalty activity and transactions for many of the world’s biggest cinema chains and captures the behavior of over 34 million active cinema loyalty members worldwide. Movio Cinema, our flagship product, holds comprehensive marketing data covering 53 percent of cinema screens of the Large Cinema Circuit in North America (17,000 screens) and 25 percent globally (25,000 screens). Movio Media aggregates data to provide film distributors and studios comprehensive market data on the behavior of typical moviegoers, crucial audience insights and innovative campaign solutions. The Movio Media technology offers the most powerful and most accurate real-time film market research platform in the United States. Movio operates in North America, Latin America, Europe, Middle East, Australia, New Zealand, China, and South East Asia.

20 Shaping the future of movie marketing