Kast and the cinema: product switching in time of crisis
In a post-pandemic world, any revenue that comes from assemblies of large crowds is at risk. This affects industries from conferences to cruise ships, and the one we’re watching most closely is the cinema. Some of the world’s largest movie chains may not survive this crisis. Whatever happens, the movie industry is going to change. Things will not go back to normal.
Many have pointed out these dangers, including executives in some of these industries, themselves. Here’s one important principle we take to heart: behaviors will only change for the long term if the alternatives people discover during time of crisis are better or cheaper than what they are used to doing.
That is already happening, during the COVID-19 crisis. People have acquired a taste for watch parties at home, even paying for theatrical releases on demand ($19.99), watching with their kids and having homemade popcorn and realizing — hey this ain’t bad. The theatrical release time window is getting shorter and shorter already, and it will eventually disappear.
In ordinary times, the rule of thumb is that a 10X improvement in experience is required in order to spur a change to a new product. Amazon has won over brick-and-mortar retail, category by category, because the experience of ordering on Amazon is that much better than going to…
