Don’t let the rising cost of popcorn spoil Britain’s love of cinema
The United Kingdom boasts less than one per cent of the global population, yet is currently the third largest consumer of film in the world – with the average member of the British public managing to watch 87 films a year. In the decade between the first and last Harry Potter films (2001-2011) the UK saw a 61 per cent increase in revenue at the box office, with British independent films more than tripling their market share.
Yet despite the continuing success of cinema in the UK, there seems to be a growing concern regarding the rising price of a night out at our nation’s multiplexes. The increasing cost of cinema tickets, and the seemingly ludicrous mark-up on popcorn (with some boxes been sold at 12 times the cost price) are seen by many as a threat to a great national pastime. Although these are very real concerns that need to be addressed by those at the top of the industry, it is worth appreciating exactly how UK cinemas manage to turn a profit.
The average UK cinema ticket last year cost £6.37 (up from £4.29 in 2002), yet very little of that ticket price actually ends up as profit for a multiplex. Roughly 20 per cent of the revenue from tickets is spent on staff, 15 per cent on property costs, five per cent on utilities, 10 per cent on miscellaneous costs, and 40-60 per cent will be spent on renting films from the distributors. Therefore, in order to remain competitive, a multiplex’s main source of profit actually comes from the concessions stand, rather than the box office.
The cinema industry also requires continuous re-investment, and it is unsurprising that ticket prices have increased year-on-year over the last decade given the revolution of digital projection that has almost entirely overtaken the traditional 35mm format of film projection. The cost of converting to digital projection is extremely high for cinemas, and can rise to £85,000 per screen. Although this change may appear to be incredibly expensive, it greatly reduces the cost of the transportation and distribution of movies; and also allows cinemas to screen more films in 3D – thus increasing their box office revenue.
However, the greatest expenditure for cinemas is still the 40-60 per cent it costs to rent a film from the distributors. This figure will vary depending on the size of the movie that is showing, and the closer to the release date that the cinema wishes to show the film. There are regular negotiations between cinemas and distributors in order to ascertain the cost of exhibiting movies, and the reluctance of multiplexes to miss out on big budget event films can often skew negotiations in favour of the distributors. Multiplex owners must also be strategic when selecting which films will best fill their screens, in order to maximise turnover and not miss out on sleeper hits. Yet given the eye-watering sums of money that are involved in the production of blockbusters, the dominant movie studios will always be eager to try and get their most lucrative films as much time in cinemas as possible.
Consider Disney’s 2012 blockbuster Avengers Assemble. The highest-grossing film worldwide last year, the superhero blockbuster had a production budget of $220 million, and an additional marketing budget estimated at $150 million. For his appearance in the film, Robert Downey Jr. alone stood to make around $50 million, which – in the interest of perspective – is just shy of Premier League club West Bromwich Albion’s wage bill for an entire season.
Given the huge amounts of money invested in blockbusters such as these, maximising the movie’s box office gross is imperative to ensuring that the studios recuperate their huge costs. Distributors may therefore put cinemas under a lot of pressure when it comes to negotiating their share of ticket receipts, knowing full well that no multiplex would be able to survive the summer if they neglect to screen Avengers Assemble.
The comparison with Premier League football is also helpful in understanding why the cost of an average trip to the movies continues to escalate. In the same way that Premier League clubs must offer players extravagant salaries in order to compete in a lucrative market place, movie studios too must shell out big money in order to land the most bankable stars.
Unfortunately, the competitive spending on production and marketing by a handful of major film studios, coupled with their ability to squeeze an increasing proportion of profits from the cinemas; results in the consumer having to put up with increasing prices year on year just so the multiplexes can afford to meet their running costs. The loss of a local multiplex would be regrettable for any town or city, considering how many serve as an important hub for the declining national institution that is the British high street. Many moviegoers choose to shop or eat out after having seen a film, so a successful cinema can really boost local industry.
However, it is also important that the multiplex is not viewed as the only option when it comes to enjoying a night out at the pictures. Britain boasts a wealth of independent cinemas, with 30 in London alone (not counting those run by Picturehouse). Although they are unlikely to screen the populist blockbusters produced by major Hollywood studios, independent cinemas can offer the best of independent, low budget, international, art house, cult, and documentary filmmaking that may not have been considered for multiplex exhibition.
Moreover, the independent experience allows proprietors the freedom to be idiosyncratic – meaning that no two screenings will necessarily be the same. You could enjoy an all-night cult movie marathon at the Prince Charles Cinema in Leicester Square, have a waiter bring absinth and olives to your seat at The Electric in Birmingham, or enjoy a film quiz and a slice of pizza at Manchester’s Cornerhouse. The experience of the audience and the promotion of the cinematic medium are key in such establishments, although the cost of a night out may turn out to be a little higher for punters when there is a fully stocked bar.
Whilst independent cinemas stand to lose out on the larger box office numbers achieved by the multiplexes screening lucrative blockbusters; a careful understanding of the target audience, and the lowered cost of acquiring films outside of the studio system, allows for independent cinemas to enjoy success amongst UK audiences.
This availability of choice for the audience is the ultimate driving force behind the continued growth of British cinemas. Whether its 3D blockbuster entertainment, old cult movies on 35mm, homegrown independent thrillers, or foreign art house fare – cinemas should always be seeking to offer film lovers the experience they’re looking for. For consumers, it’s important to understand that the rising cost of ticket prices and popcorn is an unfortunate byproduct of one kind of movie experience. The onus is on individuals to enjoy a wide variety of movie-watching experiences, and patronise the cinemas that can best offer the experience they want when going for a night out at the movies.Tagged in: British Cinema, cinema
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