Turnaround inspired by Skyfall: British cinemas are back with a bullet

Box-office records are broken each year as film fans keep coming despite downloads and soaring ticket prices

Back in 1946, with some spare time at the weekend, the most likely place you’d spend it would be at the cinema. Britons went to the flicks about three times a month then, as likely to watch a newsreel as a film. Box-office admissions were at a peak of 1.6 billion; It’s a Wonderful Life was the year’s Christmas classic, Sir David Lean’s Dickens adaptation Great Expectations another big hit. There wasn’t much popcorn, but girls strutted the aisles with trays of “Programmes, Chocolates, Cigarettes”. You could still smoke in the back stalls.

How cinema bosses must wish the same numbers flocked through the doors of their multiplexes now. After the post-war peak, TVs proliferated, and admissions slumped to 54 million moviegoers in 1984. Cinemas shut; obituaries to film going were written.

But then came a second act, and a turnaround that’s still in evidence. Admissions have been on an upward spiral for more than two decades and that despite the soaring cost of a night at the movies that has made every year a box-office record, with receipts rising 6 per cent to hit £1.1bn last year, according to the British Film Institute.

It’s a success that’s been mapped by Britain’s cinema businesses: the share price of Cineworld, the UK’s only listed cinema group with about 100 sites. Shares were 95p a pop in January 2008; now a string of profitable results has seen them go above 375p. And this summer the Vue cinema chain was sold by private-equity firm Doughty Hanson, which bought Vue in 2010 for £450m, to Canadian investors for £935m. Its box-office revenues last year rose 3.2 per cent in the UK and Ireland to top £1bn for the fourth consecutive year.

Cinema success in 2012 was thanks to a certain Mr Bond. He wasn’t just with the Queen at the Olympics opening ceremony, but rescuing British cinema too. After months of empty screening rooms, which movie bosses blamed first on the Diamond Jubilee, then the Euro football championships, then the weather, and ultimately on the Olympics, Skyfall transformed box-office fortunes and put admissions in the UK at 172.5 million last year, the third-highest level in the past 40 years. Skyfall also meant British flicks led the surge – UK films took £3.45bn at the global box office, claiming a 15 per cent share of the international market.

So 2013 has a hard act to follow. The first half of 2012 saw box-office takings fall 4.5 per cent on the same time in the previous year, so it wasn’t hard for 2013 releases Les Misérables, Iron Man 3 and The Croods to beat that. Gross box-office takings between January and June rose 8.5 per cent to £578.7m. But the rest of this year is unlikely to enjoy such a Hollywood ending. It’s not just the Bond factor: trends in the US, which Britain tends to follow, saw cinema attendance fall to a 25-year low last year; Goldman Sachs analysts blamed a slump in the number of young visitors – attendance per person aged between 12 and 24 has slumped 40 per cent since 2002 – and the rise of film digital downloads.

The cinema industry in this country, however, claims the likes of Netflix and LoveFilm actually boost demand. “Downloads are not the competition,” asserts Rupert Gavin, chief executive of cinema group Odeon & UCI. “Cinema admissions have nothing to do with what people are doing at home. It’s the distraction of other events – the football, the Olympics, the weather – that affects people.

“That changes things week by week, but the underlying trend is that more and more people are going to the cinema. From the long-term statistics, you cannot spot when VCR or DVDs were invented, or when broadband penetration exceeded 50 per cent. All the landmarks from film distribution don’t feed through to box-office statistics. We’re always more worried about when the football starts, or when there’s a big final for X-Factor, than any distribution changes. Those are the things that impact whether someone’s going to sit at home or go out. Those who watch a DVD or download a film are actually among the biggest cinema goers.”

Mark Stevens, another cinema industry veteran, says: “Digital downloads taking the place of cinema going in the near future? Never going to happen. Look at the 1980s when cinema going was put under pressure. Back then young future stars were discovered on video. But actors such as Chuck Norris, Steven Seagal and Jean-Claude Van Damme were discovered, and a whole new selection of action films were released to packed cinemas. At the same time the multiplex came into existence. The industry flourished again.”

As for the coming years, the industry is salivating over James Cameron’s next three Avatar films, the new Star Wars recreations and Pixar titles. But it’s not just movies that are exciting cinema bosses. “This year, a big feature has been how sizeable some of the theatre-based alternative content has been,” says Mr Gavin. “The screening of  [Helen Mirren’s the Queen play] The Audience bought in about £1.5m in one night, probably more than in the whole of its West End run.” Mr Stevens agrees. “Alternative content is the next big game changer for cinemas. Live theatre, opera, rock concerts or sporting events beamed into your local cinema live from anywhere in the world.”

New demographics of cinema-goers are changing the concession stands too: coffee and frozen yogurt are newly popular and Cineworld is now selling hummus. But popcorn hasn’t exactly faded away: Odeon sells three Wembley stadiums-full of kernels each year.

The Bond factor does blot the horizon this year. “A single title is unlikely to beat Bond in 2013, but there’s a whole range of titles, so we will see,” says Mr Gavin. “You can’t predict cinema. Everyone says Bond’s box office is impossible to match, but they said the same about Avatar, and a few years back no one thought The King’s Speech was going to be the stand-out number one film. It came from left field, and captured everyone’s imaginations.” 

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