Cinemas adapting to changing film scene

The cinema industry has had it tough in recent years, with the pandemic and the increasing popularity of streaming services both major challenges. Covid lockdowns resulted in worldwide cinema closures, including several iconic venues such as Los Angeles' film industry-beloved ArcLight Hollywood.

Even after lockdown restrictions eased, the convenience and content range offered by streaming services meant many moviegoers were still hesitant to leave their sofas. Titles such as long anticipated West Side Story and Nightmare Alley failed to draw theatre audiences, only to became streaming hits. What could this mean for the future of cinemas and those who own the assets which house them?

In order to survive the next decade, cinemas must upgrade their traditional offering to tempt customers. Adaptation has already begun through ‘eventising’ of the cinematic experience. Boutique chains across the UK such as Everyman, Picturehouse and Electric Cinema now offer stylish interiors, cocktail bar worthy drink and snack menus, and plush sofa seating for added luxury. The growth of internet shopping has forced retailers to find new ways to attract people to their stores; online streaming looks set to drive a similar shift for cinemas 

Cinemas are also likely to flex and adapt their core offering to exploit alternative niches in the market. "I think theaters will evolve and host social events," says Netflix global film head Scott Stuber. "They'll make deals with sporting leagues, so you can watch the games on weekends. Kids will go there to watch [e-game] tournaments. And there'll be a place for big-event television." Cinema industry specialist John Sullivan has also been a key voice calling on the sector to embrace more flexible ways of operating that go beyond the traditional multiplex model.

For investors that have cinemas within their property portfolios, the challenges present a particularly intractable problem. There will clearly be some venues that have to close, and even those that are still viable will entail some difficult conversations around rents, as Cineworld’s landlords are finding out. There are also difficulties in finding an alternative use for a cinema – expect to see some fairly left-field initiatives as investors seek new occupiers for vacant space.

But all in all, there is cause for optimism. The cinema industry has survived substantial challenges in the past, from the introduction of TV in the 1950s, to the advent of VCRs in the 80s. But in order to overcome today’s challenges, it seems industry leaders must be open to preserving their legacy in a new and more diverse form.