60 Seconds on cinemas: A tough year in prospect?
The current situation:
- US cinema attendances are down 52% y-t-d (per Box Office Mojo).
- BOM unhelpfully adds ‘summer 2017 is closing out with the worst Labor Day weekend in 17yrs’.
- Such trends have a habit of crossing the pond.
How did we get here?
- TV did the damage 50yrs ago.
- Cinema subsequently rallied (modestly).
- But now it faces the on-demand revolution.
- Services such as Netflix, Amazon Prime & Facebook Watch compete for eyeballs with cinema – and they arguably offer better value for money.
- Multiplexes tend to be co-located with casual diners.
- The symbiotic relationship has benefited both in the good times – but this year may be more challenging.
- Restaurant Group (many of whose Frankie & Benny and Chiquito’s outlets are located alongside cinemas) acknowledged softer attendances hurt the latter in 2016.
- Beauty & the Beast anchored a good Q1 this year but the outlook is less good.
- This, alongside other headwinds faced by the casual diners (NLW, rates, consumer confidence/spending drop, input price rises etc.), is distinctly unhelpful.
Where are the winners?
- Working harder & adding value remain critical.
- Experiential leisure operators continue to trade strongly.
- Casual diners add little to cinema outliers such as Everyman Media, which focuses on enhancing viewer experience by serving food and drink to seat.