UK distributors and exhibitors generally declared themselves relieved by the outcomes achieved in 2021, after cinemas were permitted to reopen in mid-May that year.
Total UK and Ireland box office of £597m ($778m) for the year was 85% up on the 2020 figure, and two 2021 titles — Universal’s No Time To Die and Sony Pictures’ Spider-Man: No Way Home — both exceeded £90m ($117.3m), which is more than any film released since Star Wars: Episode VII — The Force Awakens in 2015.
What was missing in 2021, however, was a consistent tier of films achieving blockbuster numbers, and no other title achieved as much as £25m ($32.6m). Warner Bros’ Dune, with £22.1m ($28.8m) to date, was the third biggest hit of the year in the UK and Ireland.
So far, 2022 has yet to bring an equivalently giant hit, but the exhibition sector sees signs of encouragement. Two films — The Batman (Warner Bros) and Sing 2 (Universal) — have pushed through the £30m ($39.1m) barrier, while Uncharted (Sony) delivered a surprise £23.9m ($31.2m) to April 3. Belfast engaged a different demographic, and achieved a total way beyond reasonable expectations: £15.5m ($20.2m) at press time for Universal.
“In 2021, we had seen Bond and Spider-Man do extraordinary numbers, but there was a concern we were struggling to get the middle-tier £20m to £40m [$26m to $52m] film to engage with audiences,” says Phil Clapp, CEO of the UK Cinema Association (UKCA) which represents the interests of exhibitors. “What we’ve seen with Uncharted, perhaps to everyone’s surprise, and with Sing 2, gives us confidence that audience is coming back. There will always be big films, but it’s the next tier down that bring in a broad audience, that keep the tills rolling in between the larger titles.”
His view is echoed by Andy Leyshon, CEO at the UK’s Film Distributors’ Association, who declares himself “very encouraged by what we’ve seen so far in 2022 in the theatrical market”. While “ever-hopeful for more big-hitters” like the two giants offered by 2021, “the reality is that we are likely set for a lot more box-office consistency and a greater breadth of successful releases”.
Total UK and Ireland box office for the first quarter of 2022 is £203.7m ($265.5m), according to Comscore, a 12-week figure that compares with £261.3m ($341m) for the same period of 2020 — a quarter that started very strongly (with a giant hit in the form of 1917) before tailing off due to the start of the Covid-19 pandemic. In 2019, UK and Ireland box office stood at £260.8m ($340m) after 12 weeks, and 2022 is running at 78% of that level. The 2019 full-year total was £1.36bn ($1.8bn), so if 2022 follows a similar trajectory, box office could reach £1.06bn ($1.39bn) for the year — returning the market to the level achieved in 2009.
Global data analysis and insights company Gower Street Analytics, which helps studios optimise release dates for their titles, offers a UK and Ireland projection for 2022 of £948m ($1.24bn), based on outcomes so far achieved and the release calendar for the rest of the year.
Prior to the pandemic, the theatrical window required by the UK’s big multiplex chains — Odeon, Cineworld and Vue — was just over 16 weeks, which was notably longer than the 90 days that operated in North America. The window was essentially suspended in the early period of the pandemic, and studios and cinema operators are now jostling to establish some new norms.
“What we have undoubtedly seen — we saw it during the pandemic, and we’re seeing it post-pandemic — is a significant reduction in the window,” comments Clapp. “I would say that the vast majority of people the association represents, be they larger multiplex operators or smaller independent commercial cinemas, think that a window of between 30 and 45 days is too short.”
The UKCA CEO says that the truncated window is a particular challenge for smaller cinemas playing titles off-date. “If they take a film 14 or 21 days after release, they’re almost immediately on a burning bridge, not just that the film is being released into the home two or three weeks later, but almost immediately that film is being advertised that it’s about to be released to the home.”
In past times, when films were released into homes on videocassette and then DVD, “there was a great deal of transparency about when that was going to happen,” notes Clapp. “At the moment, there’s a communications deficit. If I am a smaller cinema operator, and I’m deciding whether I’m going to hold a film in one of my two screens or take another title, there’s no straightforward way for me to know when that film is going to be released on VoD or PVoD. It’s for each distributor to decide how to run their business, but at the very least, my plea would be for better transparency and communication around these decisions.”
Cinema chains, and especially the smaller operators that do not have a strong bargaining position in negotiation with distributors, would presumably appreciate new industry-wide standards — but this is not something that can be legally negotiated, for example by the FDA and UKCA. “UK competition law doesn’t allow the exhibitors and the studios or any combination thereof to sit around the table,” explains Clapp. Adds Leyshon, “Windowing arrangements have always been reached organically over the years.”
Clapp likens the process that will be necessary as “almost a series of shuttle diplomatic missions”, as individual cinema chains make agreements with individual content providers and some kind of consensus around windowing gradually emerges.
“There’s no desire [among exhibitors] to see where we are now as the end point of that discussion,” says Clapp. “People on our side took a massive hit during the pandemic, and colleagues at the studios took a massive hit. So they need to find ways to monetise their income in the short term, but the general view on our side is, for the long-term health of the industry, we need to get back to something more than we currently have on the windows side.”
“It would be hard to not be concerned by the current financial squeeze and other terrible world events and issues at present,” comments Leyshon on the much-discussed cost-of-living spiral — or crisis — that appears on the horizon. “We are living in a time of huge flux, uncertainty and upheaval.”
Leyshon points to factors that could work in cinemas’ favour. “People are inherently social beings, and in such times, togetherness is paramount to society,” he says. “Add the escapism that cinema offers, and you have a sector that can weather most things and even over-perform in times of need and hardship.” Cinema has weathered economic storms before, and “is still very good value for money, compared to other leisure and entertainment options”.
This particular cost-of-living rise is hitting not just customers, but also the venues themselves. “I’m hearing horror stories of the rise in utilities costs,” says Clapp. “Cinemas are physical buildings, which need to be heated. And we are not in a place where those increased costs can be easily passed on to customers.”
The UKCA has been running an ongoing survey of attitudes around cinemas and cinemagoing since the start of the pandemic. “The last couple of rounds of that, for the first time, have started to flag up concerns around general costs and affordability across all demographics,” says Clapp. “It’s not specific to cinema. People are rolling back on a whole range of things that they would otherwise do, whether it’s the theatre or the pub or restaurant. It’s something we need to be mindful of.”
Clapp recognises UK government support that cinemas have received through the pandemic, from the furlough scheme, reduced VAT (from 20% to 12.5%), and holidays in business rates paid to local authorities. “There’s an understanding that the public purse has taken an absolute hammering in the last couple of years,” he adds. “So any notion of more targeted funding, any notion of more support from local authorities, was a long shot. We had hoped the chancellor would extend the life of the VAT reduction in his spring statement in March, but sadly that did not occur.”
Given the expanded ambitions of the streamers (much in evidence during awards season), the attack on the theatrical window and choices such as Disney releasing Pixar’s Turning Red exclusively via Disney+, some will argue that cinemagoing has peaked at 193 million admissions for UK and Ireland, which it reached in 2018, and that a decline is inevitable — with plex chains then divesting themselves of less-profitable sites.
Clapp, however, sees only growth and commercial ambition from his members. “If I look at the list of openings that were planned in 2020 and I look at the list of openings now, all the pandemic has done is shift those openings back two years. There are very few things that have gone completely off the radar.”
Pre-Covid, he adds, the discussions were: “What can we do to get to the magic 200 million admissions figure? I don’t think it’s fanciful to say that we might be talking about having that kind of discussion again, about what we can do to build back beyond where we were previously.”
He sees no shortage of interest in investment in the sector. “People on the outside looking into the business — it’s not an experience we would have chosen to go through, but the lesson they seem to have taken from the last two years is, ‘Bloody hell, this is a resilient business. I’ll continue to put my money there rather than somewhere else.’