02 Strategic Choices

On the back of an envelope

Before investing too much time and energy in research and lobbying, it’s important to identify precisely 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 local area who share a passion for cinema, it may be best to set up a film society or community cinema in the first instance. This is a relatively straightforward process, requiring little capital and relatively little time. For more advice, see:

• Cinema For All’s website
• Screening Films in Community Cinemas (guide)
• Screening Films in Your Community (online course)

Another way of showing more interesting cinema to local audiences is to put on a film festival. Both can be good ways of testing the water and finding out exactly how much local interest there is in film. They will also give you a taste of the kind of energy required and the challenges involved, including organising film copyright licensing, negotiating with distributors and marketing your programme.

You may still feel passionately that there is a real 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 mid-20th century when most smaller cinemas were built. In the current economic climate, it can 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 must therefore be realistic and consider three key things:

1. How much money will you need 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 building fabric 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: Capitalisation).

For a full-time operation, you will need to generate annual average admissions of at least 20,000 to 30,000 per screen, and 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 cinemagoers, such as students in higher education or people with relatively high disposable income.

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

21st century leisure facilities must offer 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 to local independents to part-time facilities in arts and community centres. Film societies and mobile touring cinemas are also important for certain communities, especially in more remote, rural locations.

Commercial cinema

Multiplexes dominate the commercial sector. They represent under 40% of UK cinemas, but these contain 75% of all screens and take over 80% of admissions.

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, potentially 70,000 to 80,000 per screen, depending on location and competition.

In addition to multiplexes, there are several hundred independent commercial cinemas operating throughout the UK. The overwhelming majority of these 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

As well as new and recent releases, there is an enormous range of repertory film to choose from. Over a hundred years of 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. Sometimes referred to as ‘specialised’ cinemas, they may enhance the cinemagoing experience with guest speakers, exhibitions and other types of tie-in events and educational offers as well as screening a broader range of films.

These cinemas play an important role in bringing locally or regionally produced films to public 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) often also screen alternative content or event cinema, which refers to live or pre-recorded music concerts, theatre, art exhibitions, dance productions and sporting events.

In order to decide what kind of cinema provision might be appropriate for your potential audiences, you need to establish what kind of provision already exists locally (if any) and what you could offer that would be different. It is risky to compete against a multiplex with blockbuster titles because distributors are very unlikely to give you these films until a few weeks after release, when most of your audience will already have seen them.

Differentiation is key, and there are two elements of the independent cinema 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 modern leisure facilities and potential audiences respond accordingly.

Research and industry evidence 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’ than a cinephile who wants to access a range of films from around the world.

Standards for cinema buildings, audience comfort and 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, comfortable seating and high definition digital cinema projection are all now considered basic requirements.

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 programme and presentation standards, but also extend to facilities such as parking and bars and restaurants. Some cinemas, often run by independent companies, include crèches, additional community spaces and destination bars and restaurants in their offer.

Public authorities involved in planning, economic development and social and cultural policy may have additional criteria for new developments – 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.

Full-time vs part-time cinema

Major differences between full-time and part-time cinemas tend to concentrate around the ability 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 focus their efforts on the cinemas where they believe their films will perform best. If Cinema A offers a two-week booking and Cinema B offers only two or three days, Cinema B will generally have to wait longer for the film. With really big ‘tentpole’ releases, distributors increasingly dictate how many shows per 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 are still built specifically for cinema screenings. In contrast, most part-time cinemas are linked to another public or leisure facility (i.e. a sports centre, library, school or arts centre).

A recurring issue for mixed activity venues is the attention given to cinema in comparison to other activities, with cinema sometimes viewed as the poor relation within the organisation. This attitude may be evident in programme choice, information available from box office staff, the attitude of technical staff and the marketing effort. It may also be evident in an overall lack of public visibility for the film offer. None of these factors is difficult to overcome, but if allowed to continue, can be highly detrimental to the cinema’s chance of success.

A cinema operation can be relatively profitable to arts centre, sport centre or library managements. But if it’s 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 money-making. This is a grey area, and trying to determine what is beneficial cultural or social programming will continue to be a hot topic amongst funders and providers. In general, it’s worth remembering that in mixed activity venues, it’s important that the cinema operation should be able to function in a wider sense beyond the simple presentation (and profitability) of films. 

Beyond film screenings

In addition to showing films, there are additional uses for cinema buildings, which may be beneficial in terms of generating income and offering wider community benefit:

• Alternative content or event cinema – broadening the range of audiences for your venue by programming other on-screen content including live or pre-recorded theatre, opera, concerts, 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 often sell out, even with higher ticket prices
• Cultural and educational use – working with schools, colleges and lifelong learning schemes
• Local media development – providing a focus for creative and media technology businesses
• Business and community usage – offering additional spaces for hire for group activities, meetings or 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 cinema’s immediate vicinity
• 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 small. However, if designed, packaged and marketed effectively, these initiatives may fit with the objectives of public funding bodies by supporting local regeneration or rural development.

Summary of key points

• 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 cinema building
• In a mixed-use venue, ensure your plans for the cinema mean it will not just be 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.