As new Curzon opens in Canterbury and Cineworld considers bankruptcy, we look at evolution of Kent's cinema-going experience
Published: 05:00, 26 August 2022
Updated: 14:25, 26 August 2022
While some cinemas in Kent are closing or face an uncertain future, others are popping up around the county to much fanfare.
Chris Britcher examines the mixed fortunes of our movie theatres, and why offering just the latest blockbuster and a box of popcorn might no longer be enough to draw in film fans....
Our cinemas are standing at a crossroads. And the future is, according to experts, going to look very different for those of us who enjoy a jaunt to the big screen.
If ever you needed a clearer indication of the evolutionary tide on which the industry is currently sailing, look no further than right here in Kent. Some, it seems, are waving while others are drowning.
In Ashford, Dover and Rochester, a question mark looms large over the future of Cineworld - the international movie-theatre operator which warned shareholders earlier this week it could file for bankruptcy in the US, where its empire stretches to hundreds of venues.
The same applies to the Picturehouse in Ashford town centre - part of the crumbling Cineworld empire.
Yet today, in Canterbury, Curzon will cut the ribbon on a new five-screen complex as part of the £115m Riverside development - just a day after Odeon confirmed its city centre site would not be reopening after a three-year closure.
So just how can different operators in the same sector have such contrasting fortunes?
We'll come on to the roots of Cineworld's struggles in a moment - as well as the obvious challenges cinemas face as they emerge blinking into a post-pandemic world.
The real difference is what we, as the consumer, actually want from a cinema. We are, it seems, becoming rather more discerning in a world where the range of available entertainment to us has never been greater.
"The evolutionary change we're seeing with cinemas is pretty massive," explains John Sullivan, a veteran of the cinema industry.
Living in 'old Kent' Beckenham, he is the founding director of The Big Picture Company - a consultancy which, among other things, advises local authorities on the trends in the sector and the sort of developments, and operators, they should seek.
"Cinemas are going through another paradigm shift," he explains. "It's very similar to the mid-1980s when the multiplex wave first came in.
"We're now well at the end of what we know as the megaplexes, where you built as many screens as you could. That 15-20 screen era - that's now gone.
"That is not due to lack of demand. There is real core appetite for quality film to be seen in a quality environment. Which is what cinema is about.
"But many of those built in that first wave are no longer what I would call quality environments."
It seems strange for many of a certain age to think the big multiplexes have had their day. They sprouted up everywhere during the 1990s in Kent - an essential, more often that not out-of-town, bolt-on to a district's entertainment offering.
But, like supermarkets before them, what we want from a cinema has changed. Today they are migrating back into town centres - seen as a key cog in pulling punters back into our hard-hit high streets.
While Vue, Odeon or Cineworld offer a huge range of screens, with some small-scale concessions offering popcorn and snacks (often at eye-watering prices), the trend now is for the cinema to become a destination in itself.
Take The Light in Sittingbourne.
Opened in 2021, it has a modest number of screens; offering a variety of seating options, a nine-lane bowling alley, retro arcade, restaurants and three bars.
It is, in short, more a destination than a mere interlude to your evening. You watch a movie, have a meal, a few drinks, the tills keep ringing, and cinema-lovers enjoy the extension of their experience.
John Sullivan, who is also the co-founder of The Light and a non-executive director of the chain, adds: "We recognised some time ago that cinema had to be multi-dimensional - in fact, it was the bedrock of why The Light was formed.
"It had to improve its game in terms of the environment, as well as being a destination. That's proved very successful for The Light, but also equally successful for the likes of Everyman and Curzon.
"They have pioneered the cinema itself being a destination; the comfort, quality of the food and service, and a reduction in screen numbers.
"I fully applaud Curzon for what they are doing. They, over the last 10 years, have really increased the quality of their experience and their cinemas.
"Their other cinemas are superb. They are architecturally-led, interior designed and they're leading the world in terms of a quality environment.
"What Canterbury is going to get is brilliant."
But Curzon, The Light and Everyman (which has yet to come to Kent) are very different animals to the likes of Cineworld, Vue and Odeon, which dominate Kent's cinema offerings.
"Smaller chains like Curzon will have a different type of target audience," explains Harry Dee, an analyst at IbisWorld - an international research company.
He's the man behind the latest update to its report into the UK cinema industry, published in June.
"They are more in terms of attracting people who love cinema in general," he adds, "rather than the people who want to see just a blockbuster.
"They're more likely to be the people who went back as soon as they could when cinemas reopened after the lockdowns lifted."
Ah, there, we said it: The pandemic.
It is, of course, the catalyst for such a rapid change.
Not only were cinemas forced to close for the best part of a year, but streaming services and the big movie studios saw an opportunity, borne out of necessity, to stretch out of theatres and into our front rooms.
During the lockdowns, a number of big films went straight into the box-office offerings of many on-demand services.
And while cinemas have long since fully reopened, there remains the shadow of the hastily adopted new model.
That previously agreed exclusivity window by studios to screen in cinemas is shortening - today it is little over a month. But that, at least, is longer than some of the simultaneous releases we had got used to.
Mr Sullivan adds: "The model cinemas are built on - which saw the multiplex wave from 1985 to 2005 - was largely built on where cinemas had exclusive rights on most of the content being produced by the Hollywood and other global studios. That was the pact they had - cinema first and then on to other formats.
"Today, quality film is not only being produced and released initially in cinema.
"So a lot of good quality product is being produced for the likes of Netflix and Amazon Prime. They're getting the best writers and production budgets.
"That is sucking up talent.
"That's not a big problem for cinema in itself. Its problem is that it doesn't have relationships with the streamers. And it's a problem for the streamers, too.
"Their product is not being seen in the best environment [the cinema] but they're just hungry for subscribers. They both see each other as the enemy. It's wrong thinking.
"There's medium ground here.
"It might be that a subscriber on Netflix will have a pass to give them exclusive access to the first release of a film at the cinema. I'm not saying that will happen - but something like that is worth trialling."
Then, of course, there's the small issue of a lack of must-see movies. There have been some noticeable hits recently - Top Gun: Maverick, Jurassic World: Dominion, and last year's much delayed James Bond outing, No Time To Die. But the pandemic hit studio budgets and the steady stream of releases in production - the vast bulk of which were put on hold during the lockdowns.
Cineworld itself blamed a shortage of big movies for its current predicament.
"Recent admission levels have been below expectations," it told investors earlier this month, while bracing them for trouble ahead. Adding: "These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group's liquidity position in the near term."
With streaming services likely to become more aggressive in their approach following a drop-off in subscribers (a combined result of a squeeze on our spending and the meteoric rise in customers experienced during the lockdowns), many suspect the days of back-to-back big cinema releases may be some way off.
"If Cineworld think this is just a temporary blip that they're not getting product - no, it's permanent," warns Mr Sullivan.
So just what went wrong with Cineworld?
It was growing quickly before the pandemic and now, as you can imagine, it's terrible
"Before the pandemic," explains Harry Dee at IbisWorld, "the cinema industry in the UK was doing the best it's done in a while. So a lot of the big chains were investing a lot of money, and getting into debt, based on the assumption the money would keep coming in.
"Suddenly the pandemic hits, they have all this debt and can't pay it off. The debt gets higher because they have costs and no revenue.
"It was growing quickly before the pandemic and now, as you can imagine, it's terrible. The smaller chains in the UK didn't fare quite as badly as they had a lot of help from the government and weren't carrying such debt levels.
"Cineworld had bought Regal, an American cinema chain, which was a lot bigger than it was, and they leveraged it on future revenues.
"So they bought it for about $3.6bn (£2.7bn) while their annual revenues before that were about $900m globally.
"Cineworld's revenues tripled in a year after the Regal purchase.
"Before Regal it had an operating profit of about $130m, then $400m in 2018, and $550m in 2019."
Regal is the second largest US cinema chain with close to 550 theatres.
Mr Dee adds: "The cinema industry was in a golden age; blockbuster movies every couple of months.
"If it wasn't for the pandemic, they [Cineworld] would have been absolutely fine. The pandemic meant they couldn't make their debt repayments. Also, after the pandemic, admissions haven't recovered, revenues haven't recovered. They did run a profit in 2021 but it was tiny.
"No one could predict cinemas would be forced to close for a year. They were a victim of circumstance."
Cineworld lost over £1 billion in 2020 due to the enforced closures of its theatres worldwide.
Earlier this week, the chain confirmed its restructuring options included "a possible voluntary Chapter 11 filing in the US" - in other words declaring bankruptcy.
Its UK operation - and the company is London-based - is unlikely to follow in quite the same way, with financial experts pointing to the more likely outcome of it entering what is known as a Company Voluntary Agreement (CVA). It would allow the business to keep trading while negotiating with those it owes money to to agree different - or reduced - terms. Its future, to use cinema parlance, is quite the cliffhanger.
In a statement to investors, the chain added it would "expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees".
It's far from alone in facing up to the harsh realities of the pandemic's devastating impact.
IbisWorld's Mr Dee adds: "Vue didn't have as much debt, but they restructured it. They sold off a proportion of the company to pay off the debt. A lot will have been from the pandemic, a lot before it.
"But it was made untenable because of the pandemic."
All of which brings us to the issue of ticket prices. Surely, you'd think, with cinema in the doldrums, prices should be slashed? You would, of course, be wrong.
"We've found people are not pocket-sensitive when it comes to the cinema experience," explains Mr Sullivan. "They want the experience, number one, and then will count the cost afterwards."
They want the experience, number one, and then will count the cost afterwards.
Even in these difficult times?
"Precisely in these times, because cinema is still a very cheap outing," he adds. "Compared to going on holiday, the theatre, a theme park or any other experience - cinemas are a very cheap option, even at £10 a ticket.
"Would you go every day? No. But if you were, you'd join a loyalty scheme and get unlimited visits."
The trick, it seems, is to deliver an experience worthy of that ticket price - hence the all-singing, all-dancing new complexes we are seeing springing up in the county; revenue-generating operations which deliver a quality experience.
"Why save £4 going to an old-style multiplex," adds Mr Sullivan, "when you could go to a vastly superior location? That is what's going to happen."
Don't agree? Well, the simple take-away is just pick your venue wisely.
While Curzon will be charging £13.95 a ticket for a peak weekend movie (£10 during the week) at its new Canterbury outlet, there remain plenty of cheaper options elsewhere.
The Carlton in Westgate, Thanet, for example, charges just £3.50 all week. Nearby Vue, meanwhile, which has long pegged back its prices, offers swanky new recliner seats in its cinemas for £7.99 if booked in advance.
Cineworld in Dover, on the other hand is £10 or £12.99 at its Ashford outlet. Herne Bay's Kavanagh will set you back a mere £5.
So what does the future hold for the cinema right now?
"I think it will take a long time for them to get back to where they were in 2019," says Mr Dee.
"Streaming will slow down the recovery as so many movies are being released on digital platforms a lot quicker. It's harder to attract customers if they know they can wait a month and watch it at home than go all the way to the cinema and pay a premium.
"But that's another reason why the smaller art-house venues may do better, as those who love cinema are willing to pay a premium. They don't want to watch at home, they want to watch it with the cinema experience.
"And they don't baulk at paying £13 for a ticket."
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Chris Britcher