Feature: UK Cinema Industry
The UK cinema industry recently celebrated its most successful weekend ever, 29-31 October, when £13 million was taken in admissions over the three days. The unexpected success of The Blair Witch Project has greatly contributed to this figure, as has Star Wars: The Phantom Menace to cinema’s 1999 annual admissions, which look set to beat 1998’s 135 million.
However, despite this apparent strong performance, two of the country’s largest cinema chains, Virgin and Odeon, have just been put up for sale. Virgin sold its screens, which account for 14% of the market, to French group UGC last month. The Odeon chain is still up for auction and is expected to sell for around £300 million.
The sell-off of Odeon and Virgin comes as a report from research group Dodona predicts that the growth in screens, driven particularly by out-of-town complexes, is set to outstrip admissions in the short-term. Admissions in 1998 were down year on year for the first time since 1995 and, with no Star Wars installment scheduled for 2000, admissions are likely to see an annual drop as we enter the new millennium. This predicted plateau in cinema-going comes just as investment in screens is peaking.
Looking at monthly admissions figures, the picture is not so rosy for 1999. Barring the three months in the summer (June, July and August) when The Phantom Menace was cleaning up, every other month so far this year has shown an annual decline in ticket sales. In 1998, only four months showed an increase admissions when compared to 1997. At the same time as this, however, the number of screens has been steadily on the rise. By the end of 1998 there were over 2,600 screens in the UK; in 1988 there were fewer than 1,500 screens.
Cinema has increased its share of total advertising revenue from 0.5% to 1.0% over the last ten years and at the same time the number of annual admissions has risen by over 70%. The number of screens, however, has grown by around 85% with more sites due to open this year. Cinema also faces another challenge in the coming months and years, as the development of digital television brings with it an increased choice of direct-to-home films and the roll-out of video on-demand services. So far, though, the cinema industry has performed resiliently in the face of the growth in multi-channel television, video and dedicated film channels.
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