11 Operational matters

Film distributors & programme booking

Film classification

The British Board of Film Classification (BBFC) is an independent, non-governmental body funded through the fees it charges to those who submit films and video games for classification.

The BBFC classifies films on behalf of the local authorities that license cinemas under the Licensing Act 2003. It does not have any powers of enforcement. There are five classification categories for theatrically released films:

Advisory categories

U – Universal – Suitable for all ages (though not all U rated films are aimed at children).

PG – Parental Guidance – Suitable for general viewing. A PG-rated film should generally not unsettle a child aged around eight, although parents and caregivers should be aware that some scenes may be unsuitable for more sensitive children.

12A/12 – No one younger than 12 may be permitted to attend a 12A cinema screening unless they are accompanied by an adult. Adults planning to take a child under 12 to a 12A film should consider whether the main feature is suitable for that child.

Mandatory categories

15 and 18 restrict viewing by age, i.e. a person has to be 15 / 18 or older to watch the film. Essentially, the BBFC considers the content of a film in relation to theme, language, nudity, sex, violence, imitable techniques, horror and drugs. All classification decisions are explained by the BBFC in these terms. For more details, see their latest guidelines.

It should be noted that the BBFC effectively carries out its functions on behalf of local authorities that issue licences to cinemas. Local authorities may, if they do not agree with the category assigned by the BBFC, at their discretion alter any category or indeed prohibit entirely the showing of any film.

Unclassified material

Public screening of material which has not been classified by the BBFC (for example, films imported from overseas for festivals, or locally made films not entering formal distribution) is subject to local authority consent, usually with at least a month’s notice in writing. Cinemas seeking to include such material in their programme usually have to submit details of the unclassified films, and sometimes preview links, to the local authority licensing committee. For more advice on this process, see our guide: Local Licensing and Certification

Staffing

The cost of staffing a local cinema is routinely included in feasibility studies and business plans. However, the particular skills and knowledge required by successful, effective cinema staff are usually given less attention.

Historically, the local cinema manager was a high profile local entrepreneur who was widely known in their community. They were showmen and women who understood that they provided local entertainment and, relatively speaking, a quality service with a touch of glamour. This approach dwindled towards the end of the 20th century; however, many independent cinema operators have brought individuality and flair back to their venues and to the cinemagoing experience, reintroducing ideas of showmanship and community responsibility. Cinemas in smaller population centres in particular can develop a highly beneficial and close relationship with their audience, and the audience with the cinema.

The effect that staff members have on the success of a local cinema is difficult to quantify, but numerous anecdotes point to the real value of a talented and well-trained team who are friendly, welcoming, have good communication and people skills and are passionate about film and the overall cinemagoing experience.

In planning terms, it is therefore important to realise that the cinema manager and the staff are not simply functionaries but front-line marketing staff who should be recruited, trained and rewarded accordingly.

Staffing structure

Running bars and catering

Sub-contracted catering

The decision whether or not to sub-contract is crucial. There are a number of different options available under the ‘sub-contracting’ umbrella.

The UK market is dominated by a few large companies (such as Benugo) but many use local franchise businesses. Growth via acquisitions and mergers mean these organisations are often subsidiaries of much larger corporations. In terms of structure, many are sub-divided or have specialist subsidiaries which cater to particular niches. It is important to ensure that you talk to the right division of the company when negotiating any contract.

Contractors make their money in three main ways:

• Management fees
• Profits on operations
• Supplier discounts.

Remember that contractors are first and foremost businesspeople. While they may have perfected the art of financial and operational control, it is a common complaint among arts venue managers that contractors do not really understand their audiences and that the product offered is not appropriate. Much will depend here on the successful design of a specification for the contractor to adhere to.

The appointment of the catering manager is also critical. If you do not like the way in which the manager is running the catering, insist on change. Contractors are very amenable to the redeployment of their personnel if they think they might lose the contract.

It is also worth considering brands. There are many brands on the market that may be appropriate for your venue.

Individual circumstances will play an important part in determining which type of arrangement is best for you. At the other end of the scale, it is sometimes possible to find a small local caterer who can offer a good service. Such arrangements can work well, but smaller companies will not benefit from the economies of scale that the big players enjoy, including supplier discounts and head office infrastructure, and so may be reluctant to take on a contract.

Advantages and disadvantages of subcontracting

Advantages

• The arts venue manager can concentrate on their core business and leave catering to a specialist
• With a fixed management fee arrangement, budgetary management is easier and risk free
• Contractors (particularly large companies) are able to secure supplier discounts which they can pass on to customers in the form of lower prices
• In-house environmental health officers and specialist trainers will ensure all legal requirements are met
• Ideas and experiences from other locations can be brought to your cinema
• Contractors may take ‘risks’ e.g. to develop banqueting or all day trading and can introduce branded franchises at no cost to the client
• The catering operation is managed as a discrete financial entity and provides a truer picture of catering financial performance
• A national catering contractor can market your facility as part of a corporate activity.

Disadvantages

• The financial return may be lower, particularly in a fixed fee scenario where the cinema will not enjoy the benefits of their own success in attracting large audiences
• While you lose the responsibility for managing staff, you also lose the ability to motivate and reward staff whose conditions of employment and pay may be inferior to those of your own staff, creating two standards in what should be a cohesive whole
• If you choose a franchise you are not permitted to make even the slightest change to the product or service, thus losing any flexibility to respond to the market as you see fit
• You will be tied in to a contract for a period of several years, particularly if you want the sub-contractor to invest in the facilities, again restricting your ability to make changes. To break the contract you would have to prove a breach that may incur legal costs. It is time consuming and traumatic to change contractors and difficult to manage a transition to an in-house operation
• If your contractor or franchise operator develops a bad reputation at another location, your operation will suffer the bad press, even if your bar or restaurant is running perfectly well
• Managing a contractor is never cost free. It will always be necessary to spend a certain amount of management time monitoring the operation and negotiating improvements. If a contractor is under performing badly, it can be more time consuming than direct management
• Contractors tend to offer a standardised product of a standard acceptable quality at a standard cost. While product consistency is desirable, the downside is that there is little room for flair, creativity and individuality. A contracted operation is unlikely to become a destination.

Types of sub-contracting

Management fee

For a fixed agreed rate, the contractor is responsible for the total provision of service. The balance between the fee and costs is the contractor’s profit. The advantages of this system are that you know your revenue in advance and do not share any of the risks. The disadvantage is that you cannot benefit from supplier discounts or from additional revenues when profits are high. The management fee is likely to be in the region of 5% of turnover.

Concession fee

A concession fee is based on turnover of catering sales. Where capital investment into the catering facilities is required, the contractor will make this investment and give a smaller concession fee so that the investment is written off over the length of the contract. This has the advantage of improving your cash flow position. However, the contractor will expect the length of the contract to reflect the level of investment. It may also be possible to negotiate other terms such as a percentage of supplier discount and guaranteed minimum returns. The concession fee can be anything from around 15% to 22% of turnover.

Franchise

With franchising, ‘brand identity’ is bought for the operation in a specific location. The franchiser supports the franchisee with training, merchandising, management etc. as part of a package for which either fees or percentage of profit are paid. All costs (including investment) are met by the franchisee.

The main disadvantage of franchising is that you will not be permitted to make any changes (no matter how small) to the franchise formula; for example, you cannot offer chocolate sauce on vanilla ice cream if on the franchise menu it is served without. However, the advantage is the considerably reduced business risk due to a ‘known quantity’ and national corporate promotion.

Conversely, the failure of a brand in one location will affect the reputation of all franchisees. Well known brands will also only be interested in sites they know they can make work, e.g. in city centres with high foot traffic. You can either run a franchise yourself (although managing a contractor is never cost-free, and it will always be necessary to spend a certain amount of management time monitoring the operation of the franchise) or you can ask a contractor to introduce one.

Sub-leases/licences

These arrangements are fairly common but tend to be the least satisfactory type, since the relationship is one of landlord/tenant (and unless specifically excluded, will fall prey to the provisions of the Landlord and Tenant Acts). It is difficult to control the caterer and have them deliver the service you want for your audiences and to integrate the product offering into the venue. It is also likely to yield the lowest levels of financial return in the form of rent. The term of the lease is often long and without break clauses.

Managing the relationship

The most important part of the process is agreeing the principles at the outset, i.e. prior to signing the contract. It is worth spending considerable time negotiating the terms. While most contracts are standard, the contractor will be flexible while trying to secure your business. It may be worth employing a catering consultant to look over a contract for you to identify areas of potential conflict. In general, if a contract is running well, it should not be necessary for the venue manager to spend more than an hour or so per week meeting with the catering manager to discuss performance and ongoing issues.

In addition, there should be a monthly meeting with the regional or divisional management of the contractor to discuss financial performance and discuss projects. One area of potential concern is the relationship between the venue’s front of house staff and contractor’s staff. It is important to develop systems for ensuring consistency of service delivery, which may entail joint training initiatives in customer care. For example, the catering staff ought to be able to talk to customers about the films or events you are offering in the same way that your own staff will be able to describe what’s on offer in your bar or restaurant.

Marketing

Marketing is central to everything a cinema does, so you will need to think carefully about how your website, email communications, socia medial channels and any print/physical marketing can best support your goals.

An attractive website that is easy to navigate, accessible and makes it as simple as possible for audience members to identify upcoming films, book tickets and find out essential information about your cinema (opening hours, access information, food and drink offer) is crucial.

In the past, cinema marketing revolved around individual films and their star actors and directors, press coverage and trailer and poster campaigns. Programmes were largely communicated via print brochures. Many cinemas now publicise all or the bulk of their programmes solely online, with select print marketing for special events or specific programming strands. Additionally, social media has democratised marketing, opening up creative, low cost ways to speak to potential cinemagoers and bring your cinema (and the films it screens) to their attention.

Key aspects of cinema marketing:

• Website – Your cinema should have a dedicated website with film listings, copy, stills, trailers and online ticketing that makes it easy for all types of user to find out what’s on and book tickets.
• E-newsletters – Offer sign-up on your website and circulate regular e-newsletters advertising your upcoming programme and special events. Email marketing platforms can enable you to target specific subscriber lists with content that may especially interest them.
• Social media channels – Most cinemas run social media channels on sites like Instagram, X and Facebook to publicise their venue and programme and develop a dialogue with their audience.

For more advice, see our in-depth guide: Marketing for Independent Cinemas.

Managing a campaign

If you are either trying to rescue a cinema building under threat of closure or demolition or get one up and running, you may need to galvanise public support for your venture to make the case that a cinema is a needed and wanted local facility.

Liverpool’s Plaza Community Cinema is just one example of a successful campaign which was key to securing the support of the local authority, funders, residents, distributors, volunteers, businesses and other local support organisations. They secured high profile support from British director Sir Sydney Samuelson at the outset of their campaign, and he eventually became the cinema’s patron. They generated extensive interest in the threatened closure of the cinema and got masses of local press coverage.

Key advice for successful campaigns:

• Don’t organise a campaign for the sake of it – this may only serve to disenfranchise the very people you need on your side. You should have very clear campaign objectives
• Campaigns should have a short shelf life. Recognise when the job is done (or the point at which you should give up)
• If you can, engage high profile supporters, ideally local film talent
• When writing press releases, make sure you have a real story to tell (with a good hook for press)
• Create an online presence and use social media channels to spread the word.

The UK Cinema Association

The UKCA is the trade association for cinemas in the UK, representing the interests of approximately 90% of cinemas including multi-national companies, national PLCs, smaller circuits, independently owned cinemas, council cinemas and regional film theatres.

The UKCA advocates on behalf of the UK cinema sector at international, national, regional and local level.

This includes lobbying and working with government at all levels, with other sectors of the film industry, particularly distribution, as well as working with others to promote the value of cinema to the wider public. In addition the UKCA provides advice and support to individual members on interpreting and adhering to various types of legislation and regulation and on dealing with day to day operational issues.

As well as its national office, the UKCA has a number of regional branches throughout the UK.