How to start a cinema

02 Strategic Choices

This chapter looks at some of the fundamental choices you will have to make about your cinema before you start to raise funds or think about the programme.

On the back of an envelope

Before investing too much time and energy in research and lobbying, it is important to identify exactly what it is you are trying to achieve and to establish that setting up a venue-based business is the most sensible solution. You will also need to demonstrate that there is a real need for it.

If your objectives are to broaden the range of film available to you and the 30 or so other people in your village/town who share a passion for cinema then it may be worthwhile setting up a film society in the first instance. This is a relatively straightforward process, requiring little capital and relatively little time (Contact Cinema For All for guidance). If you are just fed up with the bland offering at your local multiplex why not hire a screen from a commercial cinema and show something different? Another potential medium for showing more interesting film to local audiences is a film festival. This can be a very good way of testing the water and finding out exactly how much local interest there is in film. It will also give you a taste of the kind of energy required and the challenges involved especially negotiation with distributors and marketing your programme (see the BFI’s How to set up a Film Festival for more details).

You may feel passionately that there is a need, and a market, for a local cinema. However, the economics of small-scale cinema operation are very different to what they were in the 1940s and ’50s when most smaller cinemas were built.

In the current economic climate it may be difficult to make it work and even harder to make money from it. A great many independent operators in the UK are doing it for love of cinema rather than to make their fortune.

You therefore need to be realistic and consider three key things:

  1. How much money will be required to get the project off the ground?
  2. How many people can you realistically expect to attract?
  3. Once up and running, will the cinema be sustainable?

You may be able to acquire or rent a site relatively cheaply, but in the short term, anything that is not new-build will require on-going investment in the fabric of the building and facilities. It may not be possible to fund capital works from trading revenues and so you will need access to capital (see Chapter 9 on raising finance).

For a full time operation, you will need to generate annual average admissions of at least 20,000 to 30,000 per screen, substantially more than this in a single screen venue – some would argue 50,000 admissions per screen is the minimum viable level. This means you need access to a substantial catchment population and a substantial proportion of these must be people who are regular or heavy cinema-goers such as students in higher education or people with relatively high disposable income.

Even assuming you manage to open the doors and lure in an audience on your opening night, will you be able to keep it up once initial enthusiasm and marketing has worn off?

Leisure facilities in the 21st century have to attain very high standards of audience comfort and technical quality and have the organisational and financial capacity to constantly reinvent themselves to sustain customer interest. This requires money, stamina and flair.

Market positioning

There are of course many types of public cinema, from modern multiplexes through local independent cinemas to part-time facilities in arts and community centres. Film societies and mobile touring cinemas are important for certain communities. Now that digital cinemas (see Chapter 8) are the norm – 98% of all screens in the UK are equipped for digital projection, it seems likely that new cinemas will continue to appear at commercial and leisure facilities on the high street and in out of town shopping centres.

Commercial cinema

The rapid growth in the number of multiplex cinemas is well documented. Currently almost 40% of cinemas in the UK are multiplexes but they have 75% of all screens and take over 80% of admissions. Multiplexes dominate the commercial sector. Usually defined as a cinema with five or more screens, a multiplex is typically built on the assumption that it will generate at least 50,000 admissions per screen per year. Multinational cinema exhibitors may anticipate substantially higher figures: 70,000 to 80,000 per screen depending on the location of the multiplex and the competition.

In addition to the multiplexes there are several hundred independent commercial cinemas operating throughout the UK. The overwhelming majority of these cinemas have just one or two screens. They may operate with attendance levels as low as 20,000 to 30,000 per screen, although at this level it is difficult to be profitable.

A diverse range of part-time cinemas operate successfully within arts centres, libraries and other public facilities.

Specialised cinema

Apart from the latest Hollywood releases, there is an enormous range of films to choose from. Over a hundred years of film production and titles from all continents are potentially available.

Broadening the range of films available to a particular community is often one of the basic objectives of community cinemas, art-house cinemas or any facility that receives public funding.  These so called ‘specialised’ cinemas often enhance the cinema-going experience with guest speakers, exhibitions and education courses in addition to the broader range of film titles they offer. Those cinemas are expected to play an important role in bringing locally or regionally produced films on to public cinema screens, alongside the broadest possible selection of new films from around the world, and screenings of historically important and archival films. In addition, these cinemas along with some of the larger independents and select multiplexes, now screen Alternative Content or Event Cinema, which can be a confusingly vague term, but generally refers to screening music concerts, sporting events, art exhibitions, theatre and dance productions.

Local film festivals have proved to be very popular in smaller towns throughout Europe and can attract considerable attention from local residents and businesses and can be another good way to ‘test the waters’.

In order to decide what kind of cinema provision might be appropriate for your potential audiences you need to establish what kind of cinema provision already exists (if any) and what you could offer that would be different. It is risky to compete against a multiplex with blockbuster titles because the distributors are very unlikely to give you the film until a few weeks after release when most of your audience will have seen it. Differentiation is the key, and for the independent cinema, there are two parts of the offer where this can be developed – the programme and the physical environment. The quality of a particular cinema can make a dramatic difference to the number of people who attend. Old, uncomfortable and unsophisticated cinemas cannot compete with the standards set by modern leisure facilities and potential audiences respond accordingly.

Research and the evidence of the cinema industry in general, have shown that cinemagoers want new release films, value for money and choice. How these factors are viewed varies among individual cinemagoers. A family going to see the latest Disney film at a multiplex will have a different concept of ‘quality’ and ‘choice’ compared to a cinemagoer wanting access to a range of films from around the world.

The standard of cinema buildings, audience comfort levels and the quality of technical presentation have all risen sharply in the last decade in the face of competition in the wider leisure market, and developments in home cinema. Unobstructed viewing, large screens, multi-channel sound systems, comfortable seats with generous legroom and High Definition digital cinema projection and digital 3D, are all now considered to be the basic requirements by many contemporary cinemagoers.

As exhibitors face increasing competition they are seeking to differentiate themselves from competitors by refurbishing their cinemas to even higher standards. Notions of ‘quality’ refer to the programme and standards of presentation but also extend to include facilities such as safe car parking, bars and restaurants. A small number of cinemas, often run by independent companies, include crèches, youth areas and wifi and destination bars and restaurants.

Some cinemas are also now offering immersive screening experiences such as chairs that ‘react’ to what’s happening on screen, IMAX screens and a range of ‘luxury’ services as well as alternative seating such as beanbags or sofas.

Public authorities that are involved in planning, economic development, social and cultural policies, may have additional criteria for a new development, for example:

  • The cinema should be located so that it assists the development of the evening economy and local regeneration.
  • The scale of the cinema should allow it to be integrated into town centres in such a manner that it enhances pedestrian use of the town centre.
  • The programme should cater for the diversity of the local population.

It may be difficult or impossible for one cinema to fulfil all the local requirements. In such circumstances a combination of full-time and part-time provision may result in a considerable improvement and an overall rise to cinema admissions.

Full-time vs part-time cinema

The major differences between full-time and part-time cinemas tend to concentrate around the ability, or otherwise, of the cinema to book new release films close to their national release date.  Film distributors naturally want to earn the maximum return on their films as quickly as possible and concentrate their efforts on the cinemas where they believe their films will perform best. If one cinema offers a full week booking (or longer) and another offers two or three days, then the latter cinema will generally have to wait longer for the film. With the really big ‘event’ films, distributors are increasingly dictating how many shows a day and the length of the run they require to secure the film on its national release date.

Full-time cinemas typically present more performances per week than part-time cinemas, so in addition to increased booking power they are able to offer a wider range of programmes to their local community.

Pure cinema vs mixed activity venues

Traditional cinemas are usually self-contained facilities and most new full-time cinemas continue to be built specifically for cinema screenings. In contrast most part-time cinemas are linked to some other leisure or public facility such as a sports centre, library, school or arts centre. A recurring issue for mixed activity venues concerns the attention given to cinema screenings compared to other activities. Sometimes cinema is viewed as the poor relation within the organisation. This attitude may be evident in the programme choices, the information available from box office staff, the attitude of technical staff and the marketing effort. It may also be evident in the lack of visibility for the cinema operation. None of these factors is especially difficult to overcome but if allowed to continue they can be highly detrimental to the cinema.

A cinema operation can appear relatively profitable to arts centre, sport centre or library managements. If it is treated as a cash generator whose primary aim is to subsidise the rest of the organisation, public funding bodies may object to the lack of cultural or social programming and an overemphasis on moneymaking programmes. This is increasingly becoming a grey area and trying to determine what is ‘specialised cinema’ and what isn’t will only continue to be a hot topic amongst funders and providers. The BFI’s definition of ‘specialised’ cinema can be viewed here. Arts and sports centres are important social and community centres where a range of activities may take place at the same time. It is important for the cinema operation to be able to function properly in a wider sense than just presenting the film.

Beyond film screenings

The main use of a cinema building may be to show films to the public but there are additional uses which may become important, particularly now that Digital Cinema Initiatives projection systems and satellite links are widely used, enabling venues to access ‘alternative content’ and programme beyond film.

  • Alternative content or Event Cinema – broadening the range of audiences for your venue by programming other on-screen content including live theatre, opera, concerts, museum exhibitions, comedy and sports events and links to other cinemas and film festivals. These events tend to be limited to one off or only a few screenings and as a result are often sold out performances.
  • Cultural and educational use – work with schools, colleges and lifelong learning schemes. Activities to enhance the cinemagoing experience
  • Local media development – providing a focus for creative and media technology startup businesses
  • Business and community usage – typically for meetings and small conferences
  • ‘Very local’ economic regeneration – often focused on the town centre evening economy but also on general leisure, retail and environmental improvements within the immediate vicinity of the cinema
  • Retention of the local urban population, improving the attractiveness of the town and district for new businesses. Multiplex developments often ‘anchor’ new retail and leisure developments and local cinemas can have similar effects for smaller towns and communities.

It is important to realise that the impact of these additional uses on the revenues of one cinema may be comparatively small. However if designed, packaged and marketed effectively, such initiatives may fit with the objectives of public funding bodies to assist local regeneration or rural development.

These ‘cinema enhancements’ may bring in additional support in terms of small project aid or capital grants in addition to box office income. For this to happen there needs to be a clearly identified fit with local authority and regional plans in respect of community benefits (such as a reduction in street crime and disorder during evenings), regeneration outputs and social inclusion effects.

Summary of key points from Chapter Two

  • Before you start, do a reality check – how much money do you need and can you raise it? How many people can you realistically expect to attract to a cinema in your area? Is it sustainable?
  • Research the competition and think about how you can differentiate what you plan to offer both in terms of programme and facilities
  • Consider whether there are other complementary uses for the building
  • In a mixed-use venue, you need to ensure that cinema is not just treated as a ‘cash cow’
  • Think about degree of fit with the local authority plans for the area. Find out about local and national cultural strategies. Achieving complementarity is vital and may unlock resources

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