The coronavirus epidemic has severely impacted cinema businesses across the globe. Film production and exhibition have come to a grinding halt with the restrictions imposed and demand of maintaining social distancing. Going further, even when the lockdown gets removed the consumer sentiments are likely to remain weak as the masses will continue avoiding crowded places and also as the economic scenario is not good, so the discretionary spending would take a hit. While, the Big Cinema chains, like AMC and Cinemark etc. continue to remain shut in the USA, UK and other parts of the world, it has been observed that home-based media has benefited most in this situation such as Netflix, Amazon Prime and Hot star, etc., as people are locked in their homes and are having access to them only. The other segment which is likely to benefit is the OTT (Over-the-top) platform, that is not only providing the comfort of access but is coming up with regular new content.
In the United Kingdom, Vue Entertainment alone had closed its ninety-one cinemas, whereas Odeon has topped operations of its 120 cinemas in the month of March. Cinemark closed its 345 of its US locations for an indefinite period, whereas 630 AMC’s sites have been declared shut for two-three months. Various movie production houses have also postponed their movie releases such as a black widow, Woman in The Window and James Bond movie until November 2020, which is also going to impact the revenue of the companies in the long run.
In China also, where the pandemic was discovered, the cinema business has also severely been impacted. As per some media reports, ComScore, the international box office tracking company, estimated that the revenue of the box office in January and February 2020 was nearly $238 million in china as compared to $2.15 billion in the year 2019. There has been major devastation in the industry in other parts of the world as well, as per the domestic film agency KOFIC of South Korea, the cinema audience has slumped considerably since the end of February 2020. The agency cited postponement of many good films including the Oscar-winning movie “Parasite”, which reduced the cinema audience presence to 7.3 million as compared to 22.3 million tickets sold in the year 2019. Many other countries like India, Australia, Japan, Kuwait have also experienced a significant drop in the cinema business and are waiting for the lockdown to get over for some relief.
Cinema business in the UK and the impact of Covid-19
The big cinema chains in the United Kingdom had closed their operations in the mid-March 2020 with government-induced lockdown and to contain the spread. The four big cinema houses, i.e. Odeon, Vue, Cineworld and Picturehouse closed their businesses after Prime Minister Boris Johnson, advised people in the United Kingdom to avoid socialising, including movies, theatres, party and bars etc. The last over a month had been traumatic for the cinema businesses as there has been no income, with people remaining indoor.
However, there is some good news for the industry, as two of the world’s biggest cinema chains, Cineworld and Vue are expecting to restart operations by the middle of July 2020. These two companies were among the many others who had closed completely after governments across the world asked the leisure and hospitality businesses to close, but now as the industry is grim circumstances, the reopening development will give a sigh of relief.
The chief executive officer of the Vue Entertainment Cinemas chain, Tim Richards reportedly stated that most probably, the movie halls would be able to operate again from 17th July 2020 at the time of the release of director Christopher Nolan’s action-thriller “Tenet”. He also stated in an interview that the company is supporting the government in its decision and can operate while implementing social distancing norms during the novel coronavirus epidemic. However, he also pointed out that some of the European countries are expected to start permitting to operate cinemas from as early as the next month. Reportedly, Vue Entertainment, which operates nearly 230 sites across eight nations, started its operation recently in Taiwan and has been taking all precaution like checking temperature and allowing only those who are found fit to enter inside the movie hall. Recently, chief executive officer of Cineworld Group Plc, Mooky Greidinger, had also stated that to carry on the operations would be possible from the end of June 2020. Earlier, in March, Cineworld had raised alarm bell that its operation could stop altogether because of COVID-19 crisis. However, it used government support schemes to furlough staffs. Additionally, it also slashed its shareholder dividend and lowered executive salary for the month to preserve the cash for the coming months.
Cinemas companies have been forced to stop their operations all over the world due to complete lockdown restrictions. But the worries could be reduced for them when limitations are alleviated and allow the people to watch movies while taking extra precautions in the cinema halls.
Some states in the United States of America, i.e. Georgia and Texas, have already granted permission to some cinema companies to restart their operations, which soon seems to be replicated in the United Kingdom also.
Overview of Cineworld and Vue
Cineworld Group Plc - Cineworld Group Plc (LON: CINE) is one of the prominent cinema group in Europe. It was incorporated in the year 1995 and got listed on the London Stock Exchange in the year 2007. After the acquisition of Regal Entertainment Group, the company has become the world’s second-biggest cinema business. The company is currently operating its business in various countries, like Hungary, Poland, the UK, Ireland, Slovakia, the Czech Republic, Bulgaria, the US, Romania and Israel. The company employs approximately 37,482 employees and runs around 9,500 screens throughout the world.
The share price performance of Cineworld Group Plc – The stock of the company is trading at GBX 53.50 (at around 08:43 AM GMT) on 07th May 2020, higher by 1.33 per cent or 0.70 points from the previous day’s closing price.
Vue Entertainment (UK)
A part of Vue International is the UK’s leader in the cinema sector. The company is managing most of the famous brands in Taiwan and key European markets. It is operating more than 2,400 screens in the ten countries. Its, Vue Westfield London and Vue Westfield Stratford City are the first and third highest-earning cinemas in the United Kingdom.