British cinema giant, Cineworld Group plc, is reportedly preparing to file for bankruptcy as it struggles to fully recover following forced closures and restructures during the COVID-19 pandemic — and the sluggish response from both consumers and film studios in getting things back to pre-pandemic normality.
The conglomerate — which owns Cineworld cinemas in the UK and Ireland, Cinema City in central and eastern Europe, and Regal Cinemas in the US — employs around 28,000 people globally, 4,600 of which are based in the UK.
The group has confirmed that it is looking at a number of available options to restructure its business, which includes a Chapter 11 filling in the US — which would allow it to continue operating and screening films while negotiating with creditors, to whom it is around $5 billion in debt.
As the world’s second-largest cinema chain after AMC theatres, the collapse of Cineworld could have huge ramifications for the future of film exhibitions. Though bankruptcy doesn’t necessarily mean the end of the Cineworld brand, as with other businesses that have filed for bankruptcy, such as Thomas Cook, it could signal a reduction in its scope and reach — as well as a reevaluation of the type of service it offers.
But with the restrictions and closures of the pandemic no longer a factor in most markets, why is Cineworld struggling now?
Cineworld’s unfortunate situation is largely a hangover of the pandemic. Audiences have gradually started to return to cinemas and a spate of new releases in 2022 such as No Time To Die, Top Gun: Maverick — which became one of the highest grossing films of all time — and Thor: Love And Thunder have seen healthy attendance numbers that match pre-pandemic levels.
But since the pandemic, big film releases have simply been too few in number and many studios — particularly those with streaming platforms — are still hedging their bets by digitally releasing certain films either alongside their cinematic release or shortly afterward.
Ultimately what this all points to is an entertainment landscape that has fundamentally changed since the pandemic. Cinema closures during 2020 essentially sped up the adoption of streaming — both in regards to those final tranches of consumers who had yet to sign up and the studios who had yet to embrace this new mode of distribution.
Pandora's box has been opened and its contents can’t simply be stuffed back in. While big releases may still entice audiences back into the theatre, the allure of films that can be enjoyed at home — and multi-season epics like Stranger Things — mean that, ultimately, cinemas will need to adapt and find new ways to survive.
Does This Spell The End Of Cinema As We Know It?
Not exactly. As seen earlier in the year, streaming services are also facing their own post-pandemic turbulence, particularly Netflix, as consumers rebalance their expenditures following the lifting of lockdowns and restrictions. Indeed, with a cost of living crisis raging across much of the world, consumers are cutting back — and while having a membership for every streaming service under the sun might have made sense when everything else was closed for business, it’s now an excess that few can afford.
So it’s likely that the next few years will see cinema brands re-evaluate where exactly they fit into the new media landscape, while the streaming sector sees increased competition that should drive its own changes and innovation and produces its own winners and losers.
And while 2019 was a record year for film exhibition, with the global box office accruing a whopping $42.5 billion, it is important to remember that brands were already confronting the threat of streaming with new services that could give us a clue what the future of cinema might look like.
In the UK, brands like Everyman Cinemas were leading the charge with an upmarket offering that trumped the in-home film experience with large plush seats, waiter service, and alcoholic beverages. CEO Crispin Lilly explained that they “are targeting people who want a night out and want something more special and are prepared to pay a little bit more for extra experience.”
Meanwhile, multiplexes were busy experimenting with all manner of novel formats such as 3D, IMAX, and 4DX. Perhaps this gives us some clue as to how cinemas could survive in the future.
Ever since the invention of the television, cinemas have been on the back foot, but they’ve always found a way to bounce back and make themselves relevant. With televisions becoming bigger, clearer, and cheaper than ever before and content instantly available at the click of a button, you’d be forgiven to think that the industry faces an existential threat.
However, if cinema brands can still create unforgettable experiences that trump the one found at home, slumped on the sofa, then there’s still a strong chance they can survive.