UK revenue per screen is the best in the world but there is still room for admissions growth.
Speaking at the UK Cinemas Conference in London last week, leading industry consultant Simon Rumbold dismissed claims that the exhibition market in the UK was over-screened and on the verge of a meltdown. "We are believers in the growth potential of the UK cinema market," he said. "The challenge is to build in the right locations. Demographics is not the key driver; it is about the supply of good cinemas."
The UK's revenue per screen stood at $280,000 last year, head and shoulders above all other markets in the world, he reported; Belgium was second highest, at $235,000 per screen, with US and Australia following close behind on $225,000 each.
However, the UK's number of visits per capita, at three, compared poorly with other English-speaking countries such as the US and Australia, both of which topped five visits per capita.
Rumbold claimed the market could achieve 3.2 visits per capita by 2005 and admissions of 195 million, and 3.8 visit per capita and 230 million admissions by 2010.
He further claimed that the UK could support 800 new screens in prime locations, projected a growth of 80-90 new multiplexes by 2010 at 10 new multiplexes per year. He said replacement of obsolete stock was likely to add a further 500 or more screens and anticipated that most new cinemas would be in city centres and shopping centres.
He said the UK was being held back by poor locations, ageing theatres, high rents, bad operators and the over-concentration of screens in certain areas.
According to the figures produced by Rumbold's company, JHD Advisors, there was great variation in performance between UK cinemas and local markets. Multiplexes in shopping centres outperformed the market average by 23%, those in leisure centres by 1%, while those in retail parks underperformed by 12%.
Multiplexes in city centres outperformed the average by 8%, while out-of-town sites underformed by 3%, and edge-of-town site performed to the average. The best performing local markets were those with a balance of in-town and out-of-town multiplexes.
Those multiplexes with a medium number of screens also performed better. Those with eight-10 screens overperformed by 5%, whereas five-seven screen multiplexes underperformed the average by 8%, those with 11-14 screens underperformed by 3%, and those with 15-30 screens by 1%.
Unsurprisingly, older cinemas performed the worst. Those over 10 years old underperformed by 17%, whereas those of five-10 years overperformed by 17%, and those of under five years overperformed by 1%.
He said the drivers of individual multiplex performance were: the realistic size of the cinema's catchment area; the closeness of other leisure facilities and shops; the quality of the cinema; and the availability of parking. Price was not a decisive factor, he said.
Rumbold added that he did not view other leisure pursuits, including home entertainment, as a growing threat, and that as cinema-going presently represented only 1% of leisure time, there was ample opportunity for growth.