Could Covid bring the curtain down on cinemas for good? By Tete a Tete Lab’s Celina Aoun

Industry majors warn of possible permanent closures in “unviable” sector.

By Celina Aoun, founder of Tete a Tete Lab – UAE

Credits: Luis Quintero

The global Covid-19 pandemic has wreaked havoc with almost every industry yet for those that rely on substantial public gatherings, the impact has been punishing and according to some of the sector’s biggest players, could result in permanent scarring.

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AMC, the world’s largest cinema chain which has reopened some theatres after a five-month shutdown, says audience levels in the U.S. are hovering between 10 and 20% of last year’s levels, while numbers in Europe are only marginally better. The challenged operator is now looking to raise cash through asset and equity sales and renegotiating rents with landlords, which represents the sector’s major operational cost.

Meanwhile, in a letter to the UK Prime Minister Boris Johnson and its Culture Secretary Oliver Dowden, bosses of the world’s second-biggest cinema operator Cineworld, have warned that the industry has become “unviable”. Other operators have echoed the warning calling for governmental support for an industry which they believe contribute to social well-being offering affordable family entertainment.

In the gulf council countries (GCC), the industry has faced temporary closures during lockdown periods and many have reopened with strict social distancing measures and a lack of blockbuster attractions meaning that by and large they are operating at between 15%-30% of their normal capacity.

It’s all a far cry from a forecast, just two years ago, from PwC, which predicted that more than $3.54bn of investment would be ploughed into cinema screens across the GCC by 2030 with the region’s cinema industry expected to add hundreds of new screens.

At best Covid will mean that the sector slows any planned growth, at worse it could mean the closure of existing facilities, many of which form main anchors to major mall complexes. Within the GCC, cinema-going is a major feature of social life across all segments of the six nations’ highly cosmopolitan population mix with theatres offering a range of content to satisfy Arab, Western and Sub-continent tastes.

Just before the UK entered its second lockdown, Cineworld, said it is considering the temporary closure of all its British and USA venues following news that release of the much-awaited James Bond blockbuster – No Time To Die – has been postponed again, until April next year – one of 44 new releases delayed this year. The latest UK lockdown on the back of further big draw delays has further depressed an industry already threatened.

On the face of it the cinema industry may seem like a luxury, but the fact is that cinemas employ significant numbers of people– jobs that economies can ill afford to lose. And on top of the direct employment, come the hits that will inevitably be felt by the companies that supply the in-cinema F&B and retail outlets and the restaurants, cafes and retail outlets that have strategically located their operations close to cinemas to take advantage of the large footfall they attract during normal times.

Globally operators are not seeking government support to see the industry through trying times. It remains to be seen whether its reaching out for support finds a sympathetic ear. If not, the lights may go out on an industry which provides jobs, wellbeing, associated footfall attraction and entertainment for all ages.