Will cinemas close for good?

If you take a look at the news today, you will be aware the cinema industry is in trouble. Cineworld –the largest cinema chain in the UK – is considering closing its doors.

The move – which is being seen as a temporary closure – would see 128 Cineworld cinemas close across the UK and Ireland, putting 5,500 staff out of work. The US cinema chain, Regal Cinema, which is owned by Cineworld, could also close, creating further redundancies across the pond.

In a statement via Twitter, Cineworld Cinemas, said: “We can confirm we are considering the temporary closure of our U.K. and US cinemas, but a final decision has not yet been reached. Once a decision has been made we will update all staff and customers as soon as we can.”

So, why is this happening? In short, because few people are returning to cinemas following the 2020 lockdown.

Despite increased safety provisions, it would seem that general cinema-goers just aren’t ready to return to the multiplexes – at least, not in the way Cineworld requires to make its business financially viable.

While cinemas have been open since July – following a brief closure in March – not enough people are taking up the opportunity to see a movie on the big screen. And with dwindling audience numbers, and ever-increasing overheads, cinemas are struggling.

Attempts have been made to entice audiences back through the doors, with the release of tentpole movies, including Tenet, Bill & Ted Face the Music, and The New Mutants, but the response has been rather subdued. And no amount of screenings of cinematic classics, including The Empire Strikes Back (1980) or the Rocky film series (1976 – 2006) has done the trick either.

What doesn’t help is the reluctance from movie studios to exhibit their films. Many of the top studios have pulled their A-grade material from the release schedule and have shifted it to next year.

A Quiet Place II, Black Widow, Halloween Kills, Ghostbusters Afterlife, Jungle Cruise, and The Fast and the Furious 9, are just some of the many movies that have been bumped to 2021. Even the new 007 movie, No Time to Die, which was due to make its debut next month, has been pushed back through fear that it will fall flat at the box office.

In fact, there are so many movies currently sat waiting for a release date, that if COVID-19 suddenly went away, screens would be overwhelmed with content. A shortfall in pictures is not the problem here – it’s what to do with them which is becoming the issue.

If a studio releases a movie into theatres, it risks financial failure. But by not releasing movies into theatres, audiences don’t feel the need to venture to the cinema.

So, what to do? Do the studios bite the bullet on a few pictures to encourage footfall in cinemas, or do they continue to play the waiting game?

It’s actually a far tougher call than it might seem. While film-lovers (myself included) would love to see the likes of Halloween Kills or Ghostbusters Afterlife being put back on the release schedule, we must understand that we didn’t invest money in these films, so we have nothing to lose if they fail.

Many of the big pictures cost millions of dollars to make and have multiple investors. The studios and the investors want to see a return on their money, or at the very least they want to break even, so they don’t want to risk losing out.

Sure, some films make ridiculous amounts of money, but some flop or struggle to cover their initial budget, and this is during ordinary times. So, I ask you, if you invested heavily in something and were hoping for a return on that investment, would you want to launch your product at the worst time possible?

I’m going to suggest that you wouldn’t want to open a movie in the midst of a pandemic. But this situation is clearly having huge ramifications for the future of cinema.

While Cineworld are suggesting a close would be temporary, is there really any guarantee of a resurrection if they close their doors? While Cineworld did close down for three-to-four months this year, it did so with staff being kept on a retainer, thanks to the UK Government’s furlough scheme.

Now that the furlough scheme is coming to an end, staff will be let go, and of course, most will be looking for new jobs. So, even if Cineworld were to hit the ‘reboot’ button sometime next year, it would need to rehire up to 5,500 staff to get all the cinemas back in operation.

Best case scenario is that the cinema chain would do phased re-openings, allowing it to rebuild its portfolio gradually and employ staff as money starts going into tills. Worse case scenario, this closure is permanent and once doors shut, they shut for good.

Whatever happens, this situation is incredibly sad news for staff, for movie-goers, and for the industry as a whole. If Cineworld is having difficulties due to a lack of new movies, then surely the other big cinema chains are experiencing a similar situation too.

This could become a domino effect. One chain goes, then another, and another, and so on. We could find that come 2021, there are very few places for new movies to be screened.

It is at this point that we enter a ‘catch-22’ scenario. If studios don’t release the big movies now, then cinemas might not be around to show them in the future.

Ah, but who needs cinemas, right? We can just stream content through the likes of Netflix, Amazon, and Disney+, so if cinemas go, it’s not the be-all and end-all.

Well yes, and no. Over the summer, some studios did test the waters with streaming, and while some films, such as Trolls World Tour did fine as a direct-to-streaming release, the current model doesn’t work for every film.

Firstly, trying to determine the right cost to rent a film is still up in the air. And this is putting some people off from parting with their cash.

Take Mulan for example – Disney’s big budget live-action movie which is currently available to rent through Disney+. To rent this movie, a household must pay £19.99 for the film, on top of the Disney+ subscription fee of £5.99. That’s £25.98 to watch one movie.

Now, if you’re a family of four, this might seem like a bargain and much cheaper than a trip to the flicks. But if you live alone or are in a couple, the cost doesn’t seem all that great.

My local cinema charges £4.99 to watch a movie. So, I could watch five movies at the cinema for what it would cost me to watch Mulan.

OK, so this is suggesting that I am watching the movies alone (which I tend to do anyway). But even if I went to the cinema with my other half, we could still watch two movies each and have some money left over to buy a small popcorn.

Whichever way you cut it, there is no way someone like myself can justify paying £25.98 to watch Mulan, and this is the reason why I have opted to skip the film until it gets added to Disney+ as part of the standard subscription package. Which incidentally, will be in December if you are holding out too.

The second problem with studios going down the direct-to-streaming route is that it makes it even more difficult to stop the movie being pirated and put on the internet for free. Piracy isn’t a new thing, but making a HD copy of a movie available for streaming is certainly not helping to fight against the problem.

So, if you’re a studio and you pop the new James Bond movie online for all to see, then chances are the film will indeed be available for all to see… very, very quickly from a torrent site. As far as the studio is concerned, this would be far worse than releasing the film into empty cinemas.

There is also another problem with streaming and it involves pre-existing deals and contracts regarding the distribution of movies. There are some movies that have deals in place which dictate where they can be shown.

The New Mutants – which hit cinemas in August – had to be released at cinemas rather than go straight to streaming. This was due to a pre-existing arrangement, stipulated in the Disney/Fox merger, which stated the movie must get a theatrical release before it can be streamed. So, even if Disney wanted to send The New Mutants to video-on-demand, it couldn’t.

What I am getting at here, is there are various reasons why streaming isn’t suddenly the default option. It is an option, but not necessarily the best for the movie studios.

Streaming could also be less beneficial for audiences too, because if a studio can’t work out a way to make a decent return on a movie, then it is less likely to invest as much money in the production. That means all those expensive Marvel movies that you and I like, could become a thing of the past.

Avengers: Infinity War (2018) and Avengers: Endgame (2019) cost a huge amount of money to make, but the studio was confident the movies would make their money back at the box office. Streaming doesn’t offer the same guarantee and if Infinity War and Endgame had come out in 2020 via Disney+, then Disney would have lost a huge amount of money in comparison.  

Movie studios need cinemas, and cinemas need movie studios – at least for now anyway. I do believe that streaming will continue to play a significant role in the future of distribution, but we are not quite there yet.

So, what is the solution? What can save cinemas?

It’s very difficult to say and while studios and exhibitors attempt to work it all out, bills are mounting up and time is running out.

I believe there is room for both streaming and cinema exhibition and in an ideal world, I would like to see them work together in partnership. Films could be released at the cinema for a couple of weeks, with a video-on-demand option being made available shortly after.

So, in the case of Mulan, if you live alone you could go and watch the movie at the cinema and pay the cost which is applicable for a single person. But if you’re a family, and you have little ones who want to watch the film at home, then you pay a flat fee for video-on-demand, and this covers your whole household.

Of course, this is wishful thinking and once again isn’t a straight-forward solution. It also doesn’t stop the current problems facing Cineworld, but hey, it’s a start.

Maybe the real solution will be a revised release schedule, whereby the major studios start offering up some of their decent smaller releases and put a bit of advertising behind the product. Show audiences that there is a reason to go back to cinemas and there are films out there worth seeing.

Whatever the outcome of the Cineworld closures, studios are going to take a hit, so some support is required – and it is required now. If cinema is to survive, and I really hope it does, then it needs the studios and the cinemas to work together on finding the best way forward.

But the solution isn’t clear cut, and this is why the cinemas are finding themselves in a tricky situation right now. I believe there is a way forward, and it doesn’t have to mean the death of cinema, but I do feel the path is still going to be bumpy for a little while yet and it is likely to get worse before it gets better.

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