The Slumdog sensation could not have given UK cinema a better start in the first quarter of 2009. Slumdog Millionaire, the British phenomenon that has won seven Baftas and eight Oscars, is testament to quality movie-making and has become this year's must-see film.
With its "winning in the face of adversity" fable for the 21st Century, the hit has so far taken £21m at the UK box office. But it is just the latest in a line of films that have ensured cinema is riding high in an otherwise rocky media landscape.
Last year, Mamma Mia, the low-budget girlie flick initially predicted to make about £9m, became the UK's most successful film to date, taking £69.2m. And it was not alone: big-budget franchises such as Quantum of Solace and The Dark Knight have similarly kept audiences flocking to the cinema.
Cinema admissions rose 1.1% to 164.2 million in 2008, with box-office takings reaching £854.4m in the UK - a rise of 3.7%. Between June and August last year, more than 53.6 million people went to the cinema, a year-on-year increase of 5.6%, according to the Cinema Advertising Association. And this strong performance has continued in 2009, with January admissions up 7.7% at more than 14.5 million - the best attendance figures for five years.
But as the recession tightens its grip, can cinema continue to coax people out of their homes and part with their cash for a couple of hours of entertainment?
Martin Bowley, managing director at cinema sales house Digital Cinema Media, puts it bluntly. "All this stuff about people staying in is a load of nonsense," he says. "Our core audience of 16 to 35-year-olds want to go out. Movies are part of that watercooler moment; in a world of heavy news headlines, films are a good thing to talk about."
Bowley adds that cinema is unique, because while other broadcast media are cancelling investment in content, the US movie factory keeps new products rolling: "Hollywood is continuing to invest because we have a cover price, the cinema ticket price, DVD rental releases and Sky paid-for movies, so the model is different to any other medium. Hollywood is spending £50bn a year making movies and we can benefit from that."
The quality and genre of new movie releases is crucial to the success of cinema, both in terms of pulling in audiences and advertisers. Indeed, Kathryn Jacob, chief executive of Pearl & Dean, says attendance and gross domestic product do not necessarily correlate: "It's fundamentally about our product. The economy may be booming, but if we're putting out Porkies 73 and Mrs Miggins' Pie Shop 5, then people won't go to the cinema."
She adds: "At the time of last year's writers' strike we were worried, but we have ended up with a hugely strong slate (see box of releases, below). There's so much product now. In 1995, 250 films were issued, but this year there will be more than 500. There is more market segmentation, but it's not fragmenting our audience. There is simply more for everyone."
So is this optimistic picture enough to satisfy the advertisers and keep ad revenues comfortable? In 2008, cinema ad spend reached £170.7m (source: The Nielsen Company), up slightly on the 2007 figure of £169.7m.
According to the most recent FAME report from the Cinema Advertising Association, 82% of cinema-goers go to the cinema to see the ads, and its engagement measures are higher than both TV and Web 2.0. But cinema still doesn't find its way onto media schedules as often as it could.
Pearl & Dean uses the highlights of the Oscars and the Baftas as a lever to get clients on board, offering a specific deal for advertisers to appear alongside the nominated films. Clare Turner, sales director, says: "The first quarter of each year has really strong product, so we offer the Oscars Package. Clients have included Mitsubishi, VW, Sky and the COI, and the package tends to be the most popular way we get advertisers on board."
Simon Willis, deputy head of broadcast at Mediaedge:cia and head of cinema for GroupM, says cinema can be a difficult sell to clients, who view it as a luxury medium. He argues that cinema works best as an additional channel to TV. "Heavy cinema-goers are light TV viewers," he explains. "So if you're buying TV and additional cinema, people won't necessarily see the ad on TV and you will get incremental cover."
Willis also points to the fact that some sectors use cinema better than others, for example entertainment and car brands. And cosmetics and toiletries brands often use big stars in their ads and so lend themselves well to big-screen advertising. He adds: "With the alcohol and drinks category, there is less wastage of the target audience and they can tweak their ads to be more risque, for instance in an 18-rated film."
But advertisers' options are growing all the time. Cinema is a self-selecting, opt-in medium with attentive and engaged viewers, and consumers' lengthy dwell time in the cinema (averaging 18 minutes) can also be exploited. In addition, cinema foyers and auditoriums are increasingly being used as spaces to advertise to people.
These spaces are where some of the most innovative advertising has taken place, not least because they allow more integrated campaigns. For instance, Oreos has hooked up with the film Monsters vs Aliens through Pearl & Dean. The biscuit brand is sponsoring all the kids' preview films; its strategy also includes an online presence, giveaways and an interactive floor display involving flying cookies for the kids to jump on.
Willis is a fan of interactive floor displays. "I'm a firm believer in using the foyer at every potential opportunity," he says. "When clients use foyers, they will come back to cinema. It expands the brand and you can turn the foyer into the client's own showroom."
Last year, Nivea did a similar integrated campaign around the Sex and the City film to promote its Double Effect deodorant. Nivea's campaign, targeted at young women, included foyer advertising, websites and competitions to build an association between the brand and Carrie and the girls.
Meanwhile, Bluetooth technology has opened up mobile advertising in cinemas, offering huge flexibility through short-term campaigns and even day segmentation. Because people opt in, Bluetooth is cost-effective and highly measurable. Xbox 360 achieved a record number of downloads (1.9 million) in its first Bluetooth marketing campaign, which launched at the end of last year. The download offered five games and was available in cinemas, bars and shopping centres.
But the most important technological advance in cinema is 3D. Movies released in 3D make more at the box office than the 2D versions and the number of screens capable of showing these films is increasing. At the end of 2008, there were 88 3D screens in the UK and Ireland, and this rose to 122 for the release of Bolt in February. This figure is expected to double again within the next six months.
Charlotte Jones, senior analyst at Screen Digest, says: "In 2009, there will be up to 15 films out in 3D, which will boost box office revenues. Film studios need as many cinema screens as possible in 3D, as 3D technology adds an additional £15m (between 10% and 20%) to production costs. So the more 3D screens there are, the more likely it is the film studios will recover their investment."
Although there was an injection of cash in 2007 to get the ball rolling on installing digital 3D screens in the UK, Pearl & Dean's Turner says the penetration of 3D screens is not as great as the distributors would like. She hopes her company will put together its first 3D ad reel this year.
GroupM's Willis believes 3D is good for the industry overall, but is not yet convinced by the advertising possibilities.
He says: "3D gives you something you can't get at home and it helps with copyright issues, as you can't illegally film a 3D movie. There are not yet enough digital 3D screens in the UK to cover the additional cost of making 3D ads. But we will think about 3D in the future and have talked to some key clients about it."
While there's no denying cinema is delivering on the audience front, and the medium can offer advertisers unrivalled engagement and impact, it is unlikely to escape the media depression completely. "To say cinema will not be affected would be foolish, but it will hold up well against its media rivals," says Willis.
The market's two media owners recognise the need to get out into the market and tell their story. The task for Pearl & Dean and DCM is easier now most of the major media agencies have dedicated cinema planners, but they must keep working hard to ensure cinema finds its way onto advertisers' schedules as often as it should.
BLOCKBUSTER RELEASES SCHEDULED FOR 2009
APRIL 3: Monsters vs Aliens
This animated movie from Dreamworks - the studio's first 3D movie - will be released to coincide with the Easter holidays. The film tells the story of a young girl who is hit by a meteorite and turned into a monster, and then taken to a secret government compound.
MAY 1: X-Men Origins: Wolverine
A prequel to the X-Men franchise. Wolverine, played by Hugh Jackman, seeks revenge against Victor Creed (later Sabretooth) for the death of his girlfriend and goes through the mutant Weapon X programme.
Target: 15 to 34-year-olds
MAY 8: Star Trek
The 11th reworking of the Star Trek phenomenon, directed by J J Abrams. The film goes back to the franchise's original concept, following the early days of James T Kirk and the USS Enterprise crew.
Target: 15 to 34-year-old men
MAY 15: Angels & Demons
The second film based on Dan Brown's books, following The Da Vinci Code in 2006. Tom Hanks returns to his role as Harvard symbologist Robert Langdon, who attempts to solve a murder and prevent a terrorist attack against the Vatican.
Target: 25+ ABC1s.
MAY 22: Night At The Museum 2: Battle of the Smithsonian
In this sequel to the 2006 comedy Night At the Museum, security guard Larry Daley infiltrates the Smithsonian Institute to rescue Jedediah and Octavius who have been shipped there by mistake.
JULY 3: Ice Age III: Dawn of the Dinosaurs
The Ice Age franchise has proved highly popular with children and the third film in the series is predicted to be one of the biggest 3D releases of the year, with the mammoth and his mates facing the arrival of dinosaurs.
JULY 17: Harry Potter and the Half-Blood Prince
The Harry Potter machine keeps rolling, with the release of the sixth instalment about the young wizard and his friends. The film will include some key IMAX scenes presented in digital 3D.
DECEMBER 18: Avatar
Director James Cameron's first film since Titanic features a band of humans who find themselves at odds with a distant planet's indigenous humanoid race.
Target: 15 to 34-year-old men
This article was first published on Media Week