Ster-Kinekor's Innovative Pivot: Diversifying Cinema Experience Amid Economic Challenges

Amidst a tumultuous period for the entertainment industry, South Africa's cinema leader Ster-Kinekor has unveiled dynamic plans to stay afloat and evolve. CEO Mark Sardi announced a strategy to repurpose their cinema spaces for console gaming and educational programs, in an attempt to combat the challenges faced by the industry and diversify their business model.

The South African cinema giant, synonymous with silver-screen entertainment in malls across the country, has recently grappled with financial strain. In 2024, they initiated a painful but necessary downsizing, cutting jobs and shuttering two locations. CEO Sardi, while addressing these grim changes, shed light on their new focus areas, portraying the cinemas as potential hubs for e-gaming and educational endeavours, particularly coding for students.

As part of their transformative vision, Ster-Kinekor hopes to host e-gaming tournaments and exploit their cinematic spaces for high-end console gaming experiences. Sardi highlighted e-gaming's spectator appeal, suggesting a potential profit zone in creating an arena-like atmosphere for gaming events.

The transition into a multi-faceted entertainment environment isn't unprecedented for Ster-Kinekor. The brand has dabbled with e-sports previously, as has its competitor, Nu Metro. Reinjection of PlayStation gaming into their offerings is reflective of a willingness to embrace niche markets for revenue.

Despite announcing the laying off of 226 employees and the closing of nine cinemas due to economic hardship, disruptions such as load-shedding, and Hollywood strikes in April 2024, the eventual outcome was less severe than anticipated. A trimmed down figure of 52 job losses and just two cinema closures, in Richard’s Bay and the Greenstone Mall, was reported later on, with Sardi citing ongoing dialogues with landlords about the future use of remaining sites.

Moreover, to rally sagging cinema attendance and navigate the title release delays caused by Hollywood strikes, Ster-Kinekor introduced the "Throwback Cinema" initiative. This nostalgic event saw classic films making a return at the reduced price of R50 per ticket, a move that proved a hit and was subsequently extended.

The company's chief marketing officer Lynn Wylie envisions the "Throwback Cinema" as a celebration of timeless films offering a throwback to the joys of traditional cinema at an affordable cost. Overall, Ster-Kinekor appears resilient, adapting its business model to the changing tides of the consumer landscape, while clinging to the charms of its cinematic heritage.