It’s the big moment Cineworld has been waiting for – its US cinemas, which account for three quarters of its business, will soon reopen, followed a month later by its UK sites.
The company has been without any revenue from the US market for six months and, more importantly, over the past 12 months it has seen a massive shift in how people consume films.
Cinema operators have long argued that streaming would not kill the silver screen. There was a similar argument when VHS tapes were launched, so too DVDs. They managed to exist side by side with cinemas and so did streaming services in their initial phase. But along came Covid-19 and film lovers had no choice but to stream.
“The key challenge now is whether consumers will want to go back to the cinema. So many people are bored at home and fed up with repeating the same activity of going for long walks and then sitting in front of the TV or computer. Getting out of the house and reengaging with leisure activities is at the top of the list for so many people,” says AJ Bell’s Russ Mould.
“One would think visiting a cinema is essentially mirroring what people have been doing for the past year, namely sitting in a seat and staring at a screen. But there is still something magical about sharing the experience of the cinema with an audience and seeing films on a very large screen.
“It seems wrong to declare Covid being the final nail in the coffin for cinemas. However, how long certain cinema operators will stay alive is a separate matter. Cineworld is drowning in debt and it needs people to be devouring pick n mix and buying lots of tickets to revive its earnings.
“Ultimately its success will depend on the appeal of the films being shown in the cinema and consumers’ willingness to mix in public again. There might be some initial reticence, but the lure of big films like the new James Bond title, No Time To Die, could be the catalyst that gets bums on seats once again.”