| Cushman & Wakefield research shows challenger, independent brands account for two thirds of venue development pipeline |
Just 17% of proposed venues are in out-of-town locations.
London, February 23 , 2017 – As film-lovers look forward to the Oscars this weekend, research from Cushman & Wakefield reveals fundamental changes in the UK cinema industry with smaller chains and independent operators behind two thirds of new venues being built over the next five years.
Cushman & Wakefield’s research identifies 144 proposed venues as having a ‘fair’ chance of development over the next five years – which would deliver approximately 960 screens in 3.6m sq ft of new cinema space – of which 45% are already legally committed to.
The current “big three” operators – Cineworld, ODEON and Vue – account for just 32% of the overall total. The rest comes from a new generation of challenger brands such as The Light, Everyman and Savoy and a string of small independents all keen to capitalise on continuing rapid growth in cinema which has seen box office sales increase by 17%* since 2014.
A second key finding is the location of these new venues – with just 17% of the total being built in out-of-town locations, reversing a long-term trend which has seen multiplexes come to dominate the market. The switch away from out-of-town locations is being attributed to landlords seeking to re-anchor town centre shopping schemes. At the same time, film-goers are increasingly rejecting travelling longer distances out of town: wanting instead to make a visit to the cinema part of a wider town centre experience including going to restaurants and bars, or heading to the cinema straight after work.
Thomas Rose, a Partner in Cushman & Wakefield’s Retail team, said: “Consumers broadly now see two ways of visiting the cinema. They may want to see the latest Bond film on a huge IMAX screen but for a more intimate occasion they want something more local, more personable and more intimate.
“Although London set off this trend with operators such as Olympic Studios in Barnes, The Barbican in the City and ArtHouse Crouch End all gaining a well publicised, strong local following, we’re now seeing this spread across the country.
“Developers want to capitalise on cinemas becoming a focal point of their community once more. At the same time, the changing nature of retailing, with High Streets increasingly having to compete with internet shopping, means more opportunities are opening up for leisure facilities.”
In 2016 UK box office sales were £1.2bn*, matching 2015’s figures and up around 17% on 2014. This looks likely to grow again into 2017 with major recent and forthcoming film launches such as Rogue One: A Star Wars Story, Trainspotting 2, Toy Story 4, Lego Batman and Logan. Admissions reached 168 million in 2016 just above the 10-year average of 167m and it is this footfall which developers are looking to secure in their new schemes.
As long as the big three cinema chains still dominate the UK market, they will strongly resist allowing any product of streaming service to bite into their window for exhibition – the amount of time a new film is shown at the cinema before being released in other forms.
Thomas Rose added: “Despite the growth of online streaming services such as Netflix, consumers still enjoy the escapism that cinema brings. Operators do need to continually improve, adapt and invest to keep ahead of the Internet generation – which is what we are now witnessing,
“Investment in existing sites will become increasingly important as will be responding effectively to meet local cinemagoers’ requirements. The Lounge at ODEON Whiteleys in London’s Bayswater and the Showcase in Reading both greatly reduced the number of seats in their sites but upgraded all the remainder to VIP quality. For Showcase, the reconfiguration reportedly increased box office sales by 55–75% turning the venue from an average performer to reportedly one of the top-tier cinemas in the country. As ever, the key to success will be determining what customer profile to cater for and adapting accordingly.”