(P.23) Cinema screen surplus threatens movie revival

by Paul McCann, Media News Editor - The Independent, Sunday 6 November 1999

Thanks to The Blair Witch Project and Star Wars: Episode 1, the Phantom Menace, cinema admissions should grow from the 135.5 million last year to 137 million this year, according to the report.

However, the entertainment consultancy Dodona Research believes a slowdown in admissions in 1998 and the fact that two of the UK's biggest cinema chains have been put up for sale indicates that film attendance has peaked. "The industry has had a difficult 18 months," said Karsten-Peter Grummitt, the managing director of Dodona. "We are at, or close to, a peak in investment activity so there are a lot of screens coming on, yet short-term admissions growth is not great!'

Richard Branson's Virgin Group, which owned 14 per cent of the UK's screens, has sold its chain to the French company UGC for £215m. And the largest chain in the UK, Odeon, is currently being sold by its owners Rank for more than £300m. Dodona says that the industry's big players are getting out because they believe the country may be saturated with multiplex cinemas. Last year 230 screens were opened in the UK, a 10 per cent increase on the previous year. Dodona forecasts that another 750 will open between now and 2003.

It has been the investment in modern, multi-screen cinemas with car parking which has helped cinema attendance to more than double since its post-war low of 1984. In that year, just 54 million visits were made to the cinema - just 5 per cent of the total for 1947.

Since 1988 the number of cinema screens in the country has grown from 1,500 to more than 2,500. However, last year was the second time since 1984 that cinema attendance fell from 139.9 million visits in 1997 to 135.5 million.

Some in the film industry claimed that many studios postponed releasing their big summer films because of competition from Titanic and the football World Cup. City analysts believe this proves that cinema distribution is an inherently volatile business because the film chains do not control the product that actually attracts customers the Hollywood studios do.

Those staying in the film distribution business naturally disagree that there are too many multiplexes. Warner Village, which will open another 38 multi-screen cinemas this year, claims problems have been caused by new cinemas being built too near each other.

16/11/99 Last updated 16/11/99