British cinemas are confronting the economics of reopening

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Thanks to a bumper crop of megahits, including the South Korean Oscar-winner Parasite and the British war drama 1917, Britain’s cinema scene was experiencing something of a box office renaissance by the start of 2020. A slew of blockbusters plus a yearslong effort to draw visitors back to the big screens were giving the industry a lift it hadn’t seen since the 1970s.

“It was really great,” said Catharine Des Forges, director of the Independent Cinema Office, in London, with a laugh. “It was probably one of the best years.”

Then came the arrival of the COVID-19. The pandemic hit theaters, bars, restaurants—and anywhere else that made up a pre-pandemic social life—like some sci-fi invader. Everything shut down overnight.

Now the British government has set a date for the country’s cinemas to officially reopen: July 4, weeks after movie theaters across Europe began to tentatively open their doors. But can a socially distant cinema offer the same communal experience? And, more importantly, can it help the country’s struggling cinema operators survive?

The British government prepares to reduce social distancing guideline from 2 meters to 1 meter and allow cinemas, museums and galleries to open alongside pubs, restaurants and cafes from July 4 on, but theaters remain closed.
Ilyas Tayfun Salci—Anadolu Agency via Getty Image

Back to the movies

Britain has the largest film industry and cinema market in Europe, according to the Motion Picture Association. Its stars, from Emma Thompson to John Boyega, are known the world over, one of the indisputable perks of English-language cinema. But in recent years, South Korea eclipsed the U.K. as the third-largest cinema market outside North America in terms of box office receipts, and homegrown hits like Parasite have made it a formidable creative force.

Even still, British filmgoers were a force of their own. In January, cinema ticket sales were up 20% compared to the previous year, as more than 16.5 million tickets were sold in a country of roughly 66.7 million, according to the U.K. Cinema Association. That followed two years of cinema attendance exploding back up to levels not seen since the 1970s—a time before VCRs began to eat into box office receipts.

That was in large part the result of a major effort to redesign the cinema experience in the age of on-demand streaming, says Des Forges. In the U.K., those efforts included the rise of live screenings from the National Theatre and Royal Opera House, home of the Royal Ballet; specific screenings for customers with special needs; community events; panels; festivals; and director Q&As—all designed to build on the communal, special-event appeal of going to the movies.

Surviving social distancing

Now the problems the country’s cinemas face is much the same as the rest of the world’s—even with an extensive government furlough scheme that has, until now, helped manage the bleeding by allowing cinemas to keep staff on the payroll. Cinemas large and small are confronting a permanent shift, not just in safety, but in how viewers consume films. Universal, for one, decided to bring Trolls 2 straight to streaming platforms worldwide, violating the sacred theatrical window release and provoking a rapid reaction from theaters wary that studios would start to simply skip over them to get straight to viewers.

Online film clubs and partnerships between theaters and distributors, too, have both helped keep cinemas from going silent under lockdown, says Des Forges—connecting with loyal customers and allowing for some profit sharing when films go to streaming platforms. But those have not brought in comparable revenue. Now that cinemas are eyeing reopening, a scheme from the U.K.’s Film Distributors’ Association to offer 400 hits from their back catalogues—from the Harry Potter films, to Bend It Like Beckham, to 1917—is one option cinema operators can use to fill screens in the first weeks and months. But Des Forges acknowledges the obvious—that theaters just want to show new material, which has been delayed for months, and might not happen until next year.

“There are not enough quality new films for us to play” in time for a July opening, says Simon Ward, co-owner of the Palace Cinema in Broadstairs, a town in Kent on England’s southeast coast.

There is also a divide between the largest cinema chains and the smaller independent theaters. On Tuesday, Vue, one of the country’s largest cinema chains, said it would reopen on July 10, shortly after the date the government would permit theaters to reopen.

But the lack of material, paired with the constraints of social distancing, added cleaning, and the reduction in capacity to, on average, 35% of the pre-COVID era, mean that it’s hard for small theaters like Ward’s to see a way to reopen, observe the requirements, and be financially viable, he says. That means likely not reopening until September—at the earliest—with the hope that the virus will then be under control.

The Palace Cinema is not alone. A survey by the Independent Cinema Office of nearly 500 independent cinemas, which are often owned by charities and trusts and have thinner margins than larger chains, found that many were not even considering reopening until September, and that many had calculated their long-term future was at risk. With attendance and concession sales expected to be sharply down because of social distancing, and costs up due to cleaning costs, a large number estimated they would survive for only three months after reopening.

Ultimately, Ward noted, the near future of cinemas risked everything that made going to the movies worth it in the first place.

“We don’t want to ask our audience to ignore all the face masks and sanitizer gel and somehow enjoy what should be an entertaining experience despite their environment,” he said. “We want our customers to enjoy the Palace because of our environment.”

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