Is this the death of cinema?

The box-office takings of Australian cinemas totalled $1.23 billion in 2019.

William Chapman of IBISWorld has forecast that this will be 75% lower in 2020 after the sector was shut down in response to the first wave of coronavirus infections. And while cinemas outside of Victoria are starting to re-open with social-distancing policies, there is concern that patronage will be affected by a dearth of ‘blockbuster’ films.

Many studios are delaying the release of major titles until 2021, while cinema operators still have to pay rent to their landlords and staff wages.

There is also concern that the recession and the growth in usage of streaming services during the lockdown will deter patrons from visiting cinemas when restrictions ease.

From The Guardian:

While Australia has so far been spared the wholesale closure of multiplexes seen in the UK, Chapman believes the viability of large chains will ultimately depend on how long big international releases continue to be delayed and whether Australians “will have the money to spare on a ticket given economic issues and the comparative cheapness of streaming services”…

Kirk Edwards, chief executive of Village Cinemas, says the cost of rent is a particular issue for larger chains.

Because his chain – which includes 58 cinemas in Australia, including some jointly run with Event – exceeds the $50m revenue threshold, it has not been covered by rent relief codes. He says the larger operators, often in shopping centres, which demand higher rents, have struggled as a result.

“Cinemas in Australia pay $280m in rent a year and the industry employs 13,500 staff,” Edwards says…

“My number one, key concern for all cinemas, is that we need greater support from landlords.”

Michael Hawkins, executive director of the National Association of Cinema Operators, says the industry is grateful for jobkeeper, but “without government support for rent for major chains, it will be very difficult for some operators to survive” if a second or third wave shuts cinemas again.

I am surprised that so many cinemas have survived for this long. The prices for move tickets are exorbitant and most Australian households have video-on-demand subscriptions alongside large flat screen televisions. These offer home theatre quality content at low prices, all from the comfort of one’s home.

Even as restrictions ease, Australian movie cinemas are likely to struggle.

Most jurisdictions around Australia will continue to impose seating limits to ensure adequate physical distancing. And these limits, in turn, will crimp turnover around peak periods like weekends and school holidays.

So expect significant consolidation within the cinema industry.

Leith van Onselen
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Comments

  1. The staff issue is covered by Jobkeeper until March 2021, and maybe beyond. The rents are more problematic but should have been some arrangements made between cinema and landlords.

    I don’t think the home cinema/streaming kills the cinemas will happen. We are social creatures and seeing a movie on the big screen is a relatively inexpensive past time, although with multiple kids and snacks can add up.

  2. I’d say a much larger problem is that Hollywood has shifted from producing 2hr feature films over to 6hr mini series.
    without an on going stream of diverse content the whole Cinema experience is unsustainable because there will only be one or two films that I really want to see per year.

  3. chuckmuscleMEMBER

    Surely they need some taxpayer bailout? Perhaps wages are too high and local kids don’t want to do the work because they are earning too much on JobKeeper? If only we had a bigger population to keep wages at acceptable levels and fill the cinemas with the lift in demand?

    Next problem please…

  4. Gladys Got Some

    The last time I went to a cinema was 2015. Before that was 2011. Up until 2011 I’d regularly go. It’s just a waste of money when you can torrent the movies a few months later in HD for free

    • “The box-office takings of Australian cinemas totalled $1.23 billion in 2019”

      The Aussie box office pre Covid was $1.2b without you. Plenty of folks like it. Say at $20 a ticket that is ~60 million trips from a population of 25m and you are at 2.4 trips per person. Seems okay – for folks like yourself that don’t go there are those that would go once a month.

      I quite like the movies and had a few clients in that space in the past. I would’ve seen the Bond movie and I can’t wait for the new Dune movie to come out.

  5. Mine’s been showing old movies at discount prices. I went to a couple and even with rows roped off there were bigger numbers than you’d usually see for new releases. Seeing Star Wars for $12 on the big screen ain’t the worst deal.

  6. Less Woke More BlokeMEMBER

    Slow news day

    50% capacity cinemas in NSW
    Sign in
    Wear a mask if you wish, pop a straw up under mask from your Bundy and Coke can or don’t wear a mask and throw popcorn everywhere except your mouth
    Watch Bond

    The death of cinema’s death have been greatly exaggerated.

  7. People have been enjoying collective entertainment for thousands of years, and cinema belongs to this continuum.

    The “death” of cinema has been prophesied four times since the onset of commercial cinema in the early-20th century.

    Television, popularised in the 1950s, was the source of the first major panic, followed by home video in the 1980s and Internet streaming in the 2000s.

    https://www.abc.net.au/news/2018-05-02/cannes-is-right-netflix-movies-arent-the-same/9720348

    • Whilst the cinema may not completely die, total viewers by number peaked in the US in 2002. So 18 years of declining numbers.
      Revenue has increased as the price of tickets and associated items has gone up.

  8. I love going to the movies. Tickets are ‘cheap’ if you get them through things like being an Optus customer ($10 per seat)

    Great way to get all the family together to watch a single flick.

    IMO its better than watching a movie at home.

  9. Just wait until VR glasses get better resolution and then you can watch movies at home on a cinema sized screen anywhere that you want. On the couch, lying in bed, wherever…

    In saying that, cinemas may yet survive in some form, it just won’t be the same as they are today.

  10. my toranaMEMBER

    It’s the argument of whether to go out for coffee or whether to make it at home. Some of us inquisitive restless types are prepared to pay the money to get out and see what’s happening in the world, even if does mean having to chat to a friend, others prefer to veg at home.

    • You just described three quarters of the commenters here. The tradies who would rather hit Liquormart and then watch Netflix all night or hit refresh on macrobusiness every two minutes.

      The loss of cinemas in Sydney overghe past 40 years is one of the biggest signs that this city has lost its soul.

  11. Everything in Australia is expensive. Cinemas no exception. North of $20 for a regular ticket, yes you can get discounts but at that level it is unaffordable and you’re not getting anything premium. Compare to say Arclight in the US.

  12. I am really missing the cinema

    You can’t have a 1000″ screen at home with dolby atmos 1000 speakers surrounding you. It’s not even remotely the same experience.

    Not to mention going to the movies with your m8s.

    And I’m not going to pay $30 + $18 to watch Mulan, when I could watch it at the cinemas for $20 – again, with way better screen and sound.

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