The boss of the UK’s Curzon cinema chain has criticised what he calls the industry’s “outdated” model and said movie theatres will not survive unless they embrace streaming services and make deals with studios that will see their exclusive hold on new film releases cut.
Philip Knatchbull, Curzon’s chief executive, said that the pandemic had “released an enormous pent-up demand for change that had been held up by outdated business models predicated on a large number of admissions.” After the crisis, the industry would be much smaller but “healthier”, he said.
Covid-19 has accelerated an existential crisis for cinema chains as they struggle to compete with streaming platforms. With audience levels at record lows due to the virus, Hollywood studios have postponed the release of films to 2021 or put them directly online, leaving cinema operators with few titles to show.
Cineworld, the world’s second-largest cinema company, put 45,000 jobs at risk after it closed all of its US and UK screens earlier this month blaming the delay of a string of hit releases expected this autumn, including the latest James Bond film. The biggest cinema operator, AMC, has fought to stay open but has cut its hours and warned investors that it could run out of cash by the end of the year.
In the UK, the industry trade body UK Cinema Association said that at least two-fifths of cinemas were closed and it was in “active discussion” with the government for more financial support.
But Knatchbull said that multiplex owners have relied too heavily on driving footfall by holding on to a long theatrical window — the exclusive period that cinemas have to show new releases before they are sold on streaming platforms or DVD.
“It isn’t that James Bond was the final straw for Cineworld. It’s that Cineworld was looking down a dark space anyway because it was relying on trying to control the theatrical window,” he said, adding that a spate of debt-fuelled deals before the pandemic added to the precariousness of its position.
He argued that the window should be shorter, allowing consumers to watch new releases online soon after they debut in cinemas, he said: “We need to give consumers what they want, when they want, how they want.”
Curzon, which operates 13 cinemas, runs an online film service with a pay-per-watch model, and a distribution arm, which was responsible for the Oscar-winning Korean film Parasite last year. It has also done a deal with Netflix, allowing the chain to show a selection of the streaming giant’s films on its screens as they are released.
Mr Knatchbull, whose father John was responsible for producing many of the earlier Agatha Christie films, bought Curzon after failing to persuade Guy Hands, the investor who sold Odeon to AMC for £920m in 2016, to buy into his idea of integrating a cinema business with a streaming platform.
While admissions at Curzon cinemas are just 20 per cent of their 2019 level since reopening, the company’s streaming service experienced a 500 per cent rise in user numbers during lockdown — a figure that has since fallen back but is still up 300 per cent compared to last year.
Mr Knatchbull admitted it was “devastating” to see such low footfall in cinemas and that the chain “definitely hurt” without big Hollywood hits. Curzon has cut around 20 per cent of its head office and cinema jobs this year.