UK cinemas set for worst year since 1996 due to coronavirus

The UK cinema industry is on track for its worst year since 1996, with box office and advertising revenue set to be down nu almost £900m due to the impact of Covid-19.

The government has given the green light for cinemas in England to reopen from 4 July – with safety measures including two-seat spacing and a ban on self-serve pick ’n’ mix – and operators are desperate to salvage something from this annus horribilis.

Cinema owners had been banking on the return of the first Hollywood blockbusters in the form of Disney’s Mulan and Christopher Nolan’s latest sc-fi Tenet later this month to reignite their year. However, they were dealt a blow at the end of last week when the premieres of both films were pushed back yet again, to 12 and 21 August respectively, further delaying what is already expected to be a slow recovery.

With a schedule devoid of new Hollywood blockbusters, cinema operators are initially having to fall back on low-grossing launch schedules filled mostly with classics and old hits such as Casablanca, Breakfast at Tiffany’s, the Empire Strikes Back and franchises including Harry Potter, Twilight and Fast and Furious. The smattering of newer fare includes such pre-Covid shutdown hits as 1917 and Once Upon a Time in Hollywood.

Last week, the original Jurassic Park film topped the US box office, just beating another classic, Jaws, in the battle of the back catalogues.

Last summer, the industry enjoyed a box-office boom, with films including Avengers: Endgame, Toy Story 4 and Aladdin pulling in the crowds.

The UK box office is forecast to fall by 58% this year, from £1.25bn in 2019 to £525m. This would be the lowest sum since 1996, when Independence Day finished first in a top 10 that included Mission: Impossible, Twister and Trainspotting. That year the UK box office totalled £450m.

“It is going to be a tricky one,” said David Hancock, the cinema research director at Omdia. “We mapped various scenarios depending on the coronavirus from 47% to 84% down for the year. We don’t know if there will be a second wave or if people will come back to the cinema quickly. There does seem to be a fair amount of pent-up demand, but also quite a bit of concern still about returning to public spaces.”

Cinema owners have also been deprived of months of advertising revenues. UK cinema revenues had been forecast to grow by a healthy 9% this year, to £249m. Group M, the media division of WPP, now says cinema advertising will more than halve from 2019’s level to £114m.

Tim Richards, the chief executive of Vue, one of the UK’s biggest chains, said cinemas had never operated at maximum capacity, and with a staggering of film times and longer runs in theatres, the industry could bounce back.

“It is important to remember exhibitors have an average occupancy rate of around 20%,” he said. “We have huge capacity to accommodate a lot more customers over a broader period of time. “We are going to be able to deliver similar box-office levels to pre-Covid days, but do it differently.”

The boutique chain Everyman Cinemas will reopen six sites on 4 July and its chief executive, Crispin Lilly, said tickets were selling remarkably well. However, he said the chain’s bullish expansion plans, under which it has opened eight to nine new theatres each year, would be temporarily slowed by the virus.

“We are working closely with landlords and developers to spread our openings out a bit,” he said. “We have pushed a few set for next year into 2022. It is about being prudent and sensible – we will open four or five sites next year. In the medium to long term, as there is definitely a demand for [more] cinema, it is just a question of when we will get back there.”

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