The weekend lockdown has become another test for the entertainment industry. But cinemas are the ones that suffer the most from the decision of the Cabinet of Ministers because weekends for such a business are the only way to stay afloat. We talked with some of the largest movie theater chains in the capital and is ready to tell you how the industry survives under the new restrictions and how much resources will be enough if the restrictions continue.
Debts, debts, and debts again – this is how the representatives of cinema chains talk about the reality in which they have to live. After all, not only did the complete lockdown unquestioningly shake the stability of the business, provoking not only financial, but also human losses, but also recently introduced restrictions have significantly complicated its situation.
Weekend lockdown squeezes out to the last
Multiplex says: even though somewhere around the middle of September, negative dynamics began again (in September the network was approaching -50% of the same period in 2019), the day off for cinemas is the defining day of the week...
“Depending on what content is shown, the weight of the day off compared to the total week is 60-75%,” says CEO of the chain Roman Romanchuk.
He adds that the first weekend lockdown hit theaters radically. According to him, the network is in deep losses.
“When we came out of the first lockdown, the first two weeks were at -90, -95% of the same period in 2019 - it was very bad. That is, we were working at 5% of the capacity,” explains Multiplex CEO.
The position of the sphere is also illustrated by the attendance figures for the Oscar cinema, which is almost the only one that, despite millions in losses, managed to keep the team without firing a single employee. The average occupancy here reached 10%.
“In the post-quarantine period, cinemas faced a 75% decrease in attendance, while weekends represent 70% of total weekly earnings,” says Iryna Zarya, managing partner of the Oscar cinema chain.
The Cinema City network of cinemas also failed to return the average indicators (average monthly attendance) - they did not even return 50%. However, the advertising manager of the Kyiv cinema notes that even in 2 weekends, a cinema earns more than 5 working days (Monday-Friday).
In the first month after strict quarantine, fees were also meager here.
"We hoped that the viewer missed the big screen, because, during the quarantine, the audience asked about the opening date, wrote that they were looking forward to the possibility of such trips to the cinema and were rooting for us. But the fees for the first month, in July (cinemas were reopened on July 2) were about 10% of our average attendance rate," says Tetiana Ushakova, advertising manager for the Kyiv cinema.
Due to the new restrictions, the network does not count on those 30-40% (attendance and earnings), which it reached in October.
Full-length screens are almost the only segment of the entertainment market to which the viewer returned very slowly even in the post-quarantine period. Either because of habit (the cinemas did not function for 3.5 months), then because of certain fears regarding the observance of quarantine norms.
How cinemas brought back their viewers
To remind visitors that the sphere of culture, in particular, cinemas, is gradually emerging from quarantine, returning to normal life, a number of networks offered their "goodies." We are talking, of course, about normal life in the context of 2020: we are talking about a life with constant disinfection, mask regime, and sanitizers.
The next stage was the price reduction.
"Further, we presented the audience with a varied repertoire and very attractive ticket prices (the first week, ticket prices were from 1,50 USD to 3,50 USD). Even a movie in 4DX format could be watched at the evening session for 100 UAH / ticket," Tetiana Ushakova added.
The chain also did not forget about the snack bar, adding new cocktails, teas, and hot dogs to the menu. By the way, it was snack bars that played an important role in the life of cinemas in the post-quarantine period. The profits from the sale of snacks, as opposed to the profits from the tickets, which must be shared with the distributor, remain with the cinema.
Moreover, "Cinema City" will soon sell products from snack bars using courier deliveries: the network representatives say that they are already at the stage of concluding an agreement with such services. However, they still do not undertake to predict the effect of such agreements.
But one way or another, if there is nothing to watch, viewers will not visit cinemas, which means that the bars will be idle.
Anything worth watching?
Due to quarantine restrictions, a number of large studios announced the postponement of the premiere screenings of their films for the next year. This, in fact, knocked the foundation out from under the feet of the nets. Today they have no room for error: the products they demonstrate should not only interest the viewer but also be worth watching in a movie. As with the strategies for getting the viewer back to the theaters, networks have their own vision of what they will surprise and attract to viewing.
Thus, Multiplex notes that in fact, a number of Ukrainian films are worthy of viewing, which, unlike the Hollywood product, are still being released on wide screens.
"Yes, there are no large-scale Hollywood premieres, films about which everyone knows, because they are accompanied by large marketing budgets. But now there are premieres of independent studios, as well as Ukrainian cinema, every week. The viewer will not be disappointed," says the CEO of Multiplex.
Some cinemas also resort to showing old blockbusters in the usual format, which, according to the managing partner of the Oscar film network, Iryna Zarya, is actually not justified.
"For everything that is freely available on the Internet, the Ukrainian viewer is not ready to pay," the expert explains.
But the manager also notes the importance of distributors working with independent films. Indeed, according to her, it made up the majority of the repertoire of cinemas. In addition, the woman also singles out a "lifeboat" - Christopher Nolan's film "Tenet", which nevertheless came out on the screens, thereby returning a certain number of viewers to cinemas (collected at the box office in 12 weeks almost 2 million USD, in Ukraine. According to experts, at best, 10% of what he would have collected in "pre-coronavirus" times).
The future of the cinemas
Representatives of the sphere talk about the inappropriateness of quarantine restrictions in the context of cinemas. A number of international studies show that among public places, cinemas are the safest place we visit now (safer than shopping centers, grocery, or supermarkets).
"The configuration of the cinema room is specific. Firstly, we have powerful ventilation. Secondly, this is a place where safety standards can be closely monitored - people cannot be forced to stand 100% at a distance of 1.5 meters from each other. in the queue, but in the cinema, we plant through one. Thirdly, the number of cubic meters per person in the room is large (high ceilings, a large number of square meters)," Multiplex CEO Roman Romanchuk explains.
If officials do not understand this and new restrictions continue, the networks will be forced to consider closing them indefinitely. The malls, in which almost all of the country's cinemas are located, will be forced to redesign their respective premises. And this will mean that it will not be possible to restore cinemas in the current locations in the foreseeable future.
If officials do not reconsider their decision, they will have to pay for it not only with the amount of entertainment infrastructure that cities can offer their residents. We are talking about more global problems – the national product is under attack.
After all, the “death” of cinemas will entail the closure of distributors, and it will be possible to put an end to not only the entire film distribution industry but also national film production, on which Ukraine has already spent hundreds of millions of hryvnias.
Romanchuk assumes that projects will be created and reformatted to produce content for international online platforms.
Lyubov Lisovska, director-general of the Cinema City cinema chain, draws attention to another problem - thousands of employees across the country are replenishing the army of those who have lost their jobs due to the pandemic.
"Cinemas, which have been paying taxes for years, have remained virtually without government support. Tens of thousands of employees across the country who remain unemployed do not even know in what status they will celebrate the New Year – will they join the army of the unemployed or will they be idle?" Lyubov Lisovska says.
According to the CEO of Multiplex Roman Romanchuk, due to large losses, the company has already had to cut salaries for its employees. The coefficient to the standard rate was reduced (by 0.8, 0.5, 0.3, depending on the position).
Movie rentals are a business with very large investments and dependencies: from releases, from viewers, from the weather, and now – from the virus and government decisions. Therefore, if cinemas are left without support, the entire industry will sag significantly. And in order to put it on its feet, it will take many years and tens of millions of dollars.