Cinema operators expect a disastrous year

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Dusseldorf Gregory Theile is the fourth generation to run the Kinopolis family business, but there has never been anything like this in the company’s history, he says. Within a few days he had to shut down his business “to zero”. “The income has completely collapsed,” says Theile. With 17 locations nationwide, his company is one of the largest owner-managed cinema operators in Germany. But visiting a cinema in Corona is not an easy thing.

Initially, all cinemas across Germany were closed until further notice at the end of March. This has led to a loss of earnings of around 17 million euros per week, as calculated by the industry association HDF Kino. Now the cinemas are reopening in Germany. But the industry, which is one of the oldest trades with a history of 125 years, is unsatisfied. She fears that the cinema landscape after the corona crisis will be completely different from before.

“After two months, the federal and state governments have still not approved comprehensive financial support for the cinemas. The first bankruptcies are just around the corner, ”says Christine Berg, CEO of the HDF Kino association. She is certain: “The cinemas have water up to their necks. With the next rental payments on June 1st, cinemas will go to their knees if something is not immediately done in the direction of both financial support and a joint solution to reopening. ”

Instead of a uniform and binding regulation, the industry is facing “a federal patchwork of upcoming reopening,” criticizes Berg. 16 federal states, 16 different regulations. Individual states such as Schleswig-Holstein and Hesse have already allowed houses to be opened, other countries are gradually offering this. One thing is certain: there will be no uniform regulation.

“Every cinema connoisseur knows that, given the planned nationwide film releases, cinemas can only open consistently. Otherwise, the cinemas are hardly economically viable, ”says association chief Berg. It is an industry that is characterized by dependencies. The cinema operators are dependent on the supply of new, sensational feature films. Distributors such as Paramount, Disney or Constantin, on the other hand, only put the big blockbusters on the market when they can be marketed across the board.

30,000 screens for a punctual start of the cinema

Two particularly strong feature films are about to be launched and are practically “held in front of the nose like a carrot”, says Berg. On the one hand there is “Mulan”, the real film adaptation of the Disney cartoon classic. And there is “Tenet”, the new thriller by star director Christopher Nolan. “Tenet” plays a key role. The film is set to celebrate the comeback of the cinema in mid-July. Nolan himself, who is not considered a big streaming fan, should continue to insist on this date.

However, according to industry reports, the film production company Warner in charge is now said to have concerns that would have a major impact on all films. The later planned films would also have to be moved further back if “Tenet” only starts in August.

As the US industry magazine “Deadline” reports, the studio needs at least 80 percent open cinemas around the world to hold onto the theatrical release. That’s the equivalent of 30,000 canvases. Only then is it said that the profitable film has reached the breakeven point. If these goals are not achieved, there will be a shift in “Tenet”.

“We need a lead time of six to eight weeks,” says cinema expert Berg. Advertising campaigns have to be placed – and under difficult conditions anyway: The classic advertising spaces for films such as trailers in the cinema, spots for live sports events or large billboards are currently hardly usable.

The cinema business works in waves. There are good times, including the past year in which the German cinema houses turned over a billion euros. And there are bad times that 2018 belongs to. Factors such as the World Cup, nice summer weather and a rather poor range of films make the cinema visit less attractive in such times. The current financial year will be one of the worst in history, experts are already assuming that.

Regulated operation only from July

Stripes that have already started will be reactivated in the first weeks of reopening. One of the last big films that was shown in cinemas this year was “The Kangaroo Chronicles” in March, a film adaptation of the bestseller by author Marc-Uwe Kling. But the story of the communist kangaroo only ran in German cinemas for three weeks before the houses had to close.

Up to then half a million viewers had watched the film. Berg said the potential of the film was two million viewers, with an average ticket price of eight euros, this means a loss of twelve million euros.

Calculations that Kinopolis owner Theile does every day. The Mathäser and the Gloria-Palast in Munich are among the best-known houses of his company, which employs around 1,000 people. Normally Kinopolis has an annual turnover of 100 million euros and a decent profit. Everything is different this year.

“I expect a loss in the hundreds of millions,” says Theile. He sees a regulated operation from July at the earliest. But even then, numerous hygiene requirements must be met that gnaw away at the profitability of a cinema. Example of distance control: The 1.50 meter distance between the visitors must also be observed during the performance. If one of the spectators has to leave the room, he must not pass close to the other seats. Instead, the row in front must be kept clear.

The diversity of federalism is also evident here: “We have to contact the local regulatory office for each location,” says Theile. It is already noticeable how differently the authorities interpret the regulations. “But these guidelines are essential for us,” he says. The entire German cinema industry normally counts around 60 million tickets sold in cinemas within six months. Now all cinema operators have to recalculate.

This also applies to Gregory Theile. Based on the specifications, the Kinopolis boss expects a “theoretically maximum possible utilization” of 20 to 30 percent per show. “The utilization actually achieved will be far below that,” he says.

Some remain optimistic. “There is a great desire from people to go to the cinema again,” he says. Many cineastes are currently switching to the drive-in cinema, sitting in their vehicles and watching well-known films separately. Kinopolis is also involved in this business, but only as a cooperation partner. “At the moment, most drive-in cinemas are certainly economical, I just don’t think this is sustainable business,” said Theile.

More: Constantin boss on the film industry: “So far, there is no perspective from politics.”

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