No Time To Die for cinemas

Cineworld’s recent announcement that it is temporarily dark-screening all of its cinemas in the UK and the US, together with Vue and Odeon’s decisions to operate some cinemas only at weekends, has left many of us feeling like a Bond cocktail – shaken but not stirred. The chain was operating at just under 90 UK locations – which accounts for around 10% of the 840 cinema sites country-wide recorded last year by the UK Cinema Association (UKCA) – a hefty proportion. Whatever the eventual outcome for Cineworld, Covid has brought the potential failure of one or more major cinema operators into sharp focus. Particularly for landlords whose schemes include a multiplex.

The most frequent question I’ve been asked since Cineworld’s announcement is: are these landlords right to be worried? The short answer is both Yes and No! I’ll explain… Starting with the bad news, the cinema sector has been under pressure for some time. UK admissions have see-sawed over the past decade – the 176 million recorded by the UKCA in 2019 is equivalent to the number of cinema-goers in 1971. Add to that changes in how films are distributed – Disney’s decision to release Mulan last month straight to its own streaming service Disney Plus bypassing cinemas altogether – and 2020 may well turn out to be a pivotal moment for the industry.

When I say pivotal, I’m talking about evolution and change rather than an impending wipe-out. The good news is that people still want to see films in a cinema – the communal viewing experience as an intrinsic part of a shared leisure experience. That said, consumers’ expectations are changing. P-THREE has 15 years’ experience working directly across all sectors of the cinema industry and our take on the recent success of boutique operators is that cinema audiences want more choice. Some are willing to pay for a more deluxe (premium) experience, while those who are most cost-conscious are happy to accept more utilitarian surroundings in exchange for a lower ticket price.

In fact, we think there is significant potential for a cinema equivalent of value retail and airlines. We’ve dubbed this value-led multiplex the valueplex and we expect to see more of them both in the UK and across mainland Europe. At the same time community-led spaces can also successfully create a cinematic destination as part of a flexi-space offer (take Catford Mews in South London, a brave example which I absolutely love).

For landlords who are concerned that in the coming 12 months they may find themselves with a multiplex-sized void on their hands, there are definitely solutions – and interestingly they include (a different type of) cinema. What is very clear to us is that local characteristics are now key. There is no one-size-fits-all. Landlords will need to roll up their sleeves and play a more active role in managing cinema space than they have done in the past. The reward for those who are willing and able to do this could well be a Hollywood-style happy ending.

Article by Thomas Rose, Co-founder of P-THREE