how COVID-19 has worsened the fraught relationship between cinemas and distributors

To add an additional shade of darkness to the current cloud of gloom over the country, cinema operator Cineworld announced that it would be temporarily closing all of its cinemas in the UK. Close on the heels of this came a decision by Odeon cinemas that it would only open its doors at weekends. Some commentators have already predicted that this presages the death of cinema.

According to the British Film Institute’s (BFI) Statistical Yearbook, Odeon and Cineworld operate just under half of UK cinema screens and account for 48.8% of box office takings. So by any account, this is a significant move.

Both operators cite two linked reasons for their decision: the reluctance of the public to return to cinemas and the absence of the sort of high-profile, blockbuster films which will tempt audiences back. This brings into question the effect that COVID-19 is having on the relationships between cinemas, distributors and the audiences they both need.

A troubled co-dependency

Relations between film distributors and cinemas can be tricky. The big chains and the big distributors are co-dependent – the cinemas need the films and the distributors need the cinemas to showcase their product. The relationship is not always an easy one.

There is a long history, for example, of disputes over “windows” – the length of time between a film being released in cinemas and the date it is released on other platforms – especially via pay-per-view or on streaming channels. “The shorter the window,” say cinemas, “the harder it is for us to make money on the film”. “Longer windows,” say distributors, “make it harder to sell the film on other platforms, essential to earn back the high costs of making and marketing feature films”. And the big cinema chains need the big films to make money.

The top 50 best-performing films in the UK box office take nearly 90% of the total box office. With more than 700 films released every year, that leaves little space for smaller, foreign language and independent films. Cinemas have high fixed costs and need a certain number of hit films to keep afloat.

Even indie art-house venues depend on a combination of left-field successes (think Parasite or Mary Queen of Scots) and the occasional blockbuster. For virtually all cinemas, the occasional mainstream biggie is essential to make the sums add up. Increasingly, those “tent-pole” films come from a small number of distributors.

In 2019, three distributors (Disney, Universal and Warner Bros) had a market share of just over 64%, with Disney alone responsible for 38%. This gives the big distributors a deal of power – everyone wants the new Fantastic Beasts or James Bond. With the big cinema chains, there is a balance – even the big three cannot do without Cineworld’s 1000+ screens. Despite that mutual co-dependence, the relationship can be edgy – as with the dispute over windows.

However, with smaller exhibitors distributors can impose terms which some cinemas say make it hard for them to survive.

The big three

A few years ago, I spoke to the owner of the Magic Lantern Cinema in Tywyn on the Welsh coast. During the summer, Tywyn is a holiday centre and the Magic Lantern is a rare source of entertainment should the weather be inclement.

When a distributor insists that they play the latest hit film uninterrupted for two weeks, the cinema is not going to get a repeat visit from a family whose holiday coincides with that fortnight. And, in the winter, the much smaller local audience wants variety and range – so again when a distributor demands that the Magic Lantern can only have a film either for an uninterrupted week or be forced to wait, sometimes for months after release, that doesn’t help a small local indie to stay open and thrive.

With this reliance on big films to keep the whole show on the road, what might we conclude from this summer’s season?

The only big title to be released since cinemas reopened was Christopher Nolan’s Tenet which received mixed reviews and has performed relatively poorly – certainly Nolan’s poorest performing title for many years. Other big titles have had their release dates put back into 2021 – in particular the new James Bond movie. These cannot have been easy decisions for either the distributor’s or producers – both of which need to recoup their investment.

The pulling of titles has set off a debate between cinema operators and distributors. “Audiences would start to return”, say cinemas, “if you gave us the films that people want to watch”. “No chance”, say distributors, “we’ve invested too much in these big movies to risk them when you can’t attract an audience for the films already available”.

Some distributors have used the period of lockdown to experiment further with direct-to-streaming releases – notably Disney with the live-action version of Mulan. Figures on how well the release has done are not available, but we can perhaps speculate that it did not meet Disney’s expectations, as the experiment has not been repeated despite the distributor having titles awaiting release (including Black Widow and West Side Story, both now scheduled for 2021) – and a new streaming channel hungry for a new product.

The crunch point is going to be spring 2021 – will Bond and the other big films will be released?

The death of cinema has been predicted many times before – television was supposed to finish it off, as was home video, and the nadir of film-going in the UK was in the 1980s (1984: 54 million attendances; 2019: 176 million).

There are films in the pipeline for 2021 – and production has restarted on new titles for release dates into 2022. That’s a lot of investment to write off if there are no cinemas left. And, for the cinemas, there’s a lot of real-estate tied up in movie theatres and screens. Despite all the competing attractions of gaming, streaming, YouTubing and the rest, people still love to go to the pictures. I think that in the end it’s all going to be OK. Isn’t it?