Cinema Week: The Future of Cinemas

In the cinema of the future you’ll be able to laugh as loud as you want

Ron Swanson: Uncle Frank and I were approached to write this piece because we both work in the film exhibition industry, and have an immediate professional insight into the issues that are going to affect in what happens in your local multiplex or arthouse over the next five or ten years. We hope you’ll excuse our anonymity, but some of this could be DYNAMITE.

I guess it’d be good to start by talking about some of the great things that are going on? Box office is up (Avatar, Mamma Mia, the latest Harry Potter and Toy Story 3 are the four biggest releases of all time at the UK box office, and all were released in the past four years). Digital presentation means that customers are getting better quality of projection when they buy a ticket, and you can see a wider range of events at the cinema than ever before, from opera to live sport, 3D ballet to a concert film from young whippersnappers like JLS.

So, Frank, what do cinemas have to complain about?

Uncle Frank: I would agree that things in general look good for cinemas at the moment.  However, there are a couple of issues in the medium to long term that cause concern.  You mention digital projection. This has been a boon for many venues, not just in terms of image quality (I saw Insidious in 4K the other week; it looked great), but also in operational terms.  It is much easier for my venue, for example, to get films close to release than it was with 35mm film stock. 

That said, converting to digital isn’t cheap, and there are plenty of smaller venues struggling with the cost.  There are arrangements that can help to some extent, but it will still be beyond some places.  This is particularly acute for multi-artform venues, which mix arthouse film screenings with live performance, and also cinemas in rural areas.  If digital becomes the default format for exhibition, we could see areas of the country that don’t have many multiplexes  facing a severe reduction on the numbers, or at least the range, of films available to them. 

Ron Swanson: The move towards playing alternative content is something cinemas actually need to do. They clearly can’t be dependent solely on film releases when they don’t understand the potential cost to their business of an ever-changing model, so the drive to do more things that mark out the cinema as a place for special events is a good thing. Live opera doesn’t do that for me, necessarily, but events like that are proving to be enormously popular.

We’ve both talked about the opportunities afforded by digital, but what’s your thinking on 3D? After Avatar, Alice, Clash of The Titans, did we all get fooled into thinking it was a saviour? Are we seeing a backlash or a simple market correction? You mentioned that the costs were prohibitive for digital – will the government help small venues to keep cinemas in small towns?

In the cinema of the future, all fires will be put out with gasoline

Uncle Frank: I don’t think there’s any chance of government help for venues to convert in the current climate; the Digital Screen Network was the closest we’re likely to get.  There might be some grants going for touring rural cinema, but that’s it.  

I’m still something of an agnostic when it comes to 3D.  As a consumer, I enjoy it for some things – it adds to the fun in the likes of Final Destination and My Bloody Valentine – but there are very few films that are actually better in 3D than 2D (Avatar and StreetDance are the only ones that spring to mind).  Would any of the people who went to see Thor have not gone if it was only available in 2D?  I’m sceptical – I think they went because the film looked fun.  It does seem as though we’ve reached the stage where are there enough 3D films coming out that audiences are picking and choosing, just as they do with movies in general, whereas 18-24 months ago it was shiny and new and exciting and looked like a license to print money.  That said, there’s a clear preference for it from some (younger) sectors of the market.  Being 2D hasn’t hurt us here as yet, but I’ll be interested to see how we do with the new Pirates and Harry Potter – if our sales see a drop compared to previous installments, then I’d have to assume that’s the audience voting with their feet.

We’ve also seen good audiences for opera and ballet; sadly we don’t have the necessary satellite gubbins for live stuff, or I’m sure we’d be packing them in for the National Theatre simulcasts as well. These have the advantage of appealing to an age group who haven’t grown up with the idea that everything can be downloaded for free, which is my primary market.  

In the more commercial sector, I suppose one of the big concerns is the status of the theatrical window, before films become available through other (legal) means.  Most recently, several directors, as well as major cinemas, have been getting jittery about the Hollywood studios’ proposal for a premium video-on-demand service that will cut into the time when films have previously only been in cinemas.  As someone who works in a major chain, I’m interested in whether or not you see this as a major threat. There will always be some films which everyone has to see in a cinema  – either big spectacles like Avatar, or word-of-mouth shared experiences like Mamma Mia (or The King’s Speech, more recently).  But will people bother with smaller releases if they know they can see them at home in a matter of weeks?  And how much trouble are cinemas in if this becomes the case?

Ron Swanson: Well, in terms of the way that cinema exhibition is run nowadays, I think there is a very real risk of business models collapsing from a change in the way release windows are treated. The most notorious case in this transition, so far, of course, came with Alice in Wonderland, and that film went on to do fantastic business in cinemas (£40m+ in the UK), and according to sources only mediocre sales on DVD/blu ray. There are a number of possible reasons why that might be the exception, rather than the norm. Firstly, the film was rubbish, so people were less likely to buy it, and secondly cinemas and the film benefitted from the news story – free advertising, and to an audience that Disney might not have hit without it. For me, the question regarding release windows is a tricky one, and it comes down to a number of different issues. Firstly, where’s the pressure coming from? If the answer is piracy, then I think there’s more that studios, internet service providers and exhibitors could and should be doing to combat it, before changing the pattern of releasing a film which seems certain to strike a damaging blow to cinema.

Secondly, I’m not convinced in an age of digital cinema, and therefore worldwide release dates, it makes any sense to reduce the window to bow to pressure from pirates. I’m led to believe that for movies, the most popular downloads are stolen from DVD copies, rather than camcorded film/digital prints – so I’d question the sense in putting that copy to the market sooner.

The final part of the question is the most important, though. How do you expect to prosper as a theatrical exhibitor when people’s home cinema systems and adherence to the social diktat that you must get/do/hear/see everything as early as possible to remain cool is pointing consumers in a different direction?

Uncle Frank Says: I personally don’t have a problem with a flexible window for niche films (whether they’re at the September Issue or Mega Shark vs Giant Octopus end of the market) in the way that I would with a major blockbuster: those films aren’t going to get major releases, so why oblige everyone outside a major city to wait four months to see them?.  But for big releases, ones which are supposed to be events, it makes no sense for studios and distributors to marginalise the role of cinemas in bringing the films to audiences, and spreading the word about them (especially as distributors insist on hiking up the hire percentage for films like these).  They need each other.

Still, I do increasingly find myself thinking that there are too many films being released.  Clearly multiplexes need product to fill their many screens, but it just feels like many films are destined to do just that: fill space for a couple of weeks. Nowadays we have anything up to a dozen films released every week; there simply isn’t an audience for all of them.  Some are basically expensive adverts for films being released on DVD in a fortnight’s time.  But there are also films which are supposed to be commercial that don’t have a hope in the multiplexes; I recall seeing a preview of Everybody’s Fine and knowing that it would be gone in a week. Not that’s it a particularly bad film, but it would work fine on TV; there’s just no reason for people to take the time and effort to go to the cinema to see it. Win Win is being talker screened to within an inch of its life at the moment, but again, I don’t fancy its chances in the big bad world.  (But this is possibly a problem as much for distributors as exhibitors.)

Cinemas have been threatened by new technology before, of course.  Before downloads it was video, and before that colour television.  Prior to the rise of the multiplexes in the mid-80s, cinemas became locked in a downward spiral of falling revenue leading to lack of investment, leading to falling revenue as venues became shabby and neglected – hence the term ‘fleapit’.  (As an aside, I recently came across some 1980s press ads for an Odeon cinema in a town near me; a typical programme would have Arthur in one screen, Dragonslayer in another, and Scandinavian soft porn in the third.  Fun for all the family.) 

The multiplexes did effectively close of a lot of older cinemas for which people now feel nostalgia, but overall they led directly to a rise in ticket sales after the low of the mid 70s and early 80s.  So if their business model is now facing a new threat, what else can they do to adapt?  They are certainly branching beyond film, with the live material (stand up comedy is another one).  Sport gets mentioned a lot, although as I’ve been known to go to the cinema to escape it that particular suggestion makes me shudder.  Is cinema exhibition something that major operators will conceivably lose interest in?  Will we see more independent operators, or will the existing chains try to cut corners to remain profitable?  

Ron Swanson says: My feeling is that we’re going to see something different. The chains are likely to try and consolidate their investments by trying to buy up smaller operators – something we’ve already seen with Odeon purchasing cinemas in Ireland and the UK, as well as across the European mainland; while Cineworld recently bought a number of Spanish cinemas. These moves suggest a continued appetite for cinema exhibition.

I think you’ll see that appetite develop new ideas for cinemas – from small, low-overhead digiplexes in areas of the country without theatres to a more specialised and luxurious offer in big cities, aimed at removing what people hate about cinema – lack of space, noisy clientele, etc. – while still providing something of a shared experience. I believe Cineworld have tried this recently in Cheltenham, and am sure we’ll see other operators attempting to try and recreate the success of boutique cinemas like the Electric in Notting Hill.

I would also expect a subscription model to get a lot of attention in the next few years. There’s the unlimited card, of course, but I think we’ll see something a little more sophisticated, or inclusive. We see Curzon cinemas, who also own Artificial Eye, releasing many of their films ‘On Demand’, and maybe other cinema operators will look to establish similar platforms – trying to protect cinema attendance at the same time.

Uncle Frank says: My own suspicion is that venues will go in two directions.  Some multiplex operators will doom themselves by cost cutting that will lead to dishevelled cinemas and unhappy audiences; that’s self-defeating.  Others will concentrate on the atmosphere of the venue, looking at ways to bring more people in for longer, spending more money (look at the way the Showcase Cinema de Lux includes restaurants, luxury seating areas, etc).  They’ll keep pushing prices up, but will be able to argue that they’re worth it.  We’ll also see more cinemas taking the boutique or specialised route, like the Rex in Berkhamsted.  People do still like cinemas, but whether the way cinemas have operated over the past 20-odd years is sustainable much beyond the short term is another question.

Ron Swanson says: Yeah, I think that’s beyond doubt – the cinema will, behind the scenes, at least, be a vastly different place in ten years time.

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4 thoughts on “Cinema Week: The Future of Cinemas

  1. Very interesting discussion.

    Is there any future in a sort of Kickstarter/Groupon model for micro-distribution – I mean, if enough people can be prevailed upon to pre-book tickets for a digital screening of, say, this year’s edgy indie contender (assuming materials exist for this screening) then, might the risk for screenings of that kind of work be reduced? Of course this would assume that people know the work or its reputation already, which is fine if you’re a Lynch, Herzog or even Weerasethakul but not for a newcomer…

  2. Is this a repost? If not you might want to edit out the references thats make it seem like it was written quite a while ago eg win win previews and pirates and potter not yet released

    1. Maybe a dateline at the bottom of the article would help – but seeing as Potter and Pirates haven’t left cinemas yet, the point about waiting to see how they do is still valid.

      Equally, the thing about Win Win being talker screened still makes a relevant point.

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