The cinema chain Cineworld takes drastic action to retool itself for an uncertain future amid stiff competition in the entertainment sector.
Here in the UK, the Cineworld chain of multiplexes has filed for administration. Whilst business should go on as normal for the beleaguered company as it seeks to restructure its mountains of debt, behind the scenes the company’s London-listed shares will be suspended and all of Cineworld’s shareholders will be wiped out.
As of this time last year, the company’s debts were reported at $5.2bn (globally) and considering Cineworld’s business model operates largely on the success of blockbuster cinema, a series of underperforming tentpole films over the last twelve months have likely failed to strengthen its position much.
Cineworld continues to attempt a debt restructuring plan that will allow it to exit bankruptcy protection, something it is aiming to do next month pending approval from certain creditors, according to Screen Daily.
However, the outlet is also reporting that Cineworld and other cinemas are facing much stiffer competition from other areas of the entertainment sector. According to a report from consumer and location intelligence specialist CACI, ‘the number of transactions at competitive socialising venues are up 9%, while sales are up 5%.’ This includes activities such as social darts and bowling which have seen notable boosts in popularity and spend. The companies behind Flight Club and Hollywood Bowl have seen ‘a 22% and 31% increase in transactions, and sales boosted by 17% and 13%’, respectively’.
In comparison, according to the report the UK multiplex business is in decline, ‘with transactions down 27% and sales down 23% among the six leading operators when comparing comparing October 22 – March 23 with the same period a year earlier.’
It won’t make for pretty reading for multiplex operators and underlines a takeaway that we’ve previously reported on: cinema chains are finding ways to increase customer spend per visit via premium screen sales, rising ticket prices and concessions, but to some extent, that is masking an overall decline in UK cinema attendance.
As with any data, it should be noted that there are usually figures available somewhere that will offer a contradictory viewpoint. If multiplex operators are a little worried about patrons preferring social darts or ten-pin bowling over the cinema experience, they might want to check out our piece on how to make a visit to the cinema magical again.
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