What does the cinema of the future look like?

From the ages of about 17 to 19 I was a cinema obsessive. It was really all that I took seriously. I’d go to 3–5 films a week, basically seeing anything that was on general release and often going more than once if I thought it was half-decent. This pursuit was aided by the existence of the Cineworld Unlimited scheme.

This was a genuinely revolutionary idea in the world of theatrical film distribution, which allowed regular attendees, for a cost of some £20–30 (I can’t remember the original price, which has fluctuated over the years as ticket prices have risen, but available cinemas have closed), to see as many films as they wanted. It worked out, in those days, that if you went 3 times a month, you’d more than break even. And given that I was seeing closer to 20 films a month, it was a no-brainer. And for the cinemas too, the scheme was brilliant: the Unlimited freaks filled out screenings at undesirable times and raided the concession stand at each visit. And, as is often remarked upon in economic circles, the business model of cinemas is based as much upon popcorn sales as ticket sales.

Today, the Wall Street Journal reported that the Cineworld Group, which also owns the Regal chain in the US, is preparing to file for bankruptcy. The world’s second largest cinema chain has been “struggling to rebuild attendance from pandemic lows,” according to the WSJ.

Cinema, as we knew it in years gone by, seems to have been killed. I’m part of the problem: even before the pandemic, my regular cinema habit was waning. I was still going once or twice a month, which is considerably more than average, but massively down on my teenage heights. Now I barely go at all — the last film I saw at the cinema was The Duke, back in April. It was estimated that, here in the UK, the 2019 figure for cinema admissions was 176,000,000 split between some 67m people (not all of whom, it has to be said, are the right age for cinema visits). That figure — fairly stable since the start of the new millennium — still means that on average people were only going to the cinema about 3 times a year. In 2020 that figure was down at 44,000,000 and in 2021 it had only bounced back to 74,000,000.

But it’s not just the harsh economic shock of that decline — it’s the way that two years of exposure to limited access have changed behaviours. SVOD might now be in decline — as has been much heralded by every round of Netflix subscriber figures — but the growth of SVOD in the pandemic was roughly proportional to the decline in cinema attendances. Add to that home entertainment options like YouTube and TikTok (and, here in the UK, free-to-air channels like iPlayer and 4OD) and you have an ecosystem filled with non-theatrical options. And now we’re entering a cost of living crisis where, day-by-day, I’m less likely to shell out £15 for a trip to the cinema.

Everything seems to be going against the world of theatrical presentation. And yet I don’t doubt that, if I were to fast-forward through my life to 50 years in the future (God willing, I’m still alive), there would still be cinemas knocking about. It is said that the Lumiere brothers put on the first public presentation of a movie at the Grand Cafe in Paris in 1895, some 127 years ago. And let’s face it, during that time there have been a few exogenous shocks, from two World Wars to the Spanish flu pandemic and AIDS epidemic, not to mention stock market collapses and recessions. And through all that, the ‘cinema’, as we know it, has survived. So I would be deeply surprised if the end were nearing for public presentation of movies. It doesn’t feel like we’re there.

But there are some circles that need squaring; some harsh realities that need reconciling. As streaming platforms become ever more dominant producers of high-budget movies (and let’s face it, blockbusters keep cinemas alive so that they can continue exhibiting French arthouse movies) the incentives to keep theatrical distribution have changed. And the current system DOESN’T WORK. You can’t have simultaneous broadcast on streaming platforms and cinemas, because that MASSIVELY disadvantages cinemas and MASSIVELY advantages streaming platforms (“come pay £15 to watch something you could watch at home for a price you already pay!” versus “come watch at home for free something that you’d have to pay £15 for at your local multiplex!”). The fact that option even exists is testament to the extent that streaming producers are in the driving seat of this conversation.

Equally, the two other hybrid solutions don’t really work. Disney+ does this weird thing were you can pay the cost of a cinema ticket to watch theatrical releases in your own home — something that’s psychologically unsatisfying when you’re already paying for an expensive subscription service. And then there’s the ‘short window’, like we see with things like Doctor Strange 2 which went onto Disney+ just a few weeks after its theatrical release. Again, this is a solution that simply disadvantages cinemas while giving a big promotional sell to streaming services. Cinema release is, after all, an age-old form of marketing for that second wind of distribution.

The hardest fact of all this is that we had a system that worked. A system where home entertainment platforms, from distributors of VHS or DVD to streaming services, were buying in the distribution rights for films produced by studios or independents. It was a less snout-to-tail approach, but everyone got a slice of the pie. Studios and indies sold their films to distributors and got a fee and a split of the revenue, distribution companies sold their product to cinemas, retailers and streaming companies and took their cut, while passing a further percentage on to people who’d actually made the film. And then the cinemas, retailers and streamers sold direct to the public and made up all the money from the process, and trickled it back through this pathway. It worked and everyone got a taste of that sweet cash pie.

But, goddam it, the internet ruined everything. It gave the whip-hand to VC-inflated tech firms to transition from pie-slice eaters to whole-pie snarfers. And in the words of Robert Peel, the industrial revolution Prime Minister lamenting the lost merits of agrarianism, “the die is cast and we cannot recede.”

I’m sitting, writing this, in a pub in south London (so sue me, I run my own business). It’s almost 3pm and the pub is basically empty. The news about Cineworld has got me thinking about what the future of the cinema looks like, assuming (as I do) that it survives the current crisis.

Here in the UK, pubs pay a special license to exhibit sports. You can’t take out the household Sky Sports package (that costs, I don’t know, £30-odd a month) and display that in your pub. You pay a much higher premium — the price has a number of variables, I gather, but works out at something like £1,000 a month. For most pubs that show sports and have a long history of doing so, that’s a price worth paying. But for new pubs, especially those leaning into the gastropub element (food sales are considered increasingly essential to the success of London pubs), that cost might be prohibitive. But, ultimately, for most commercial businesses £12,000 a year as a set cost, for something that can come to define your identity, isn’t that much.

Is there anything to stop Netflix or Amazon or Disney looking at a similar model? Rather than charging the, now almost £16, fee for personal users, they could charge a public distribution cost of, say, £300 a month for public display (or, I don’t know, £1,500 a month for ticketed display; I really have no idea of costs). This would give small venues the option of creating their own hybridisation. It may be that the cinema of the future is in the back of a pub, showing new releases like The Grey Man and Lightyear between episodes of Friends and The Simpsons. And obviously we’re not just (or even ‘really’) talking about pubs here: we’re talking about a new space for public display of films. Perhaps it’s part bar, perhaps it’s part bowling alley or escape room or ice cream parlour. Perhaps we can normalise cinemas being a part of anything.

This is just an idea, for which I would like $1,000,000. The reality is I expect that cinemas will just shrink. The troubles faced by the Cineworld Group show that the largest companies face the greatest vulnerability. It’s their own fault, to an extent. If you allow Marvel to effectively own your business, you are giving Disney the opportunity to eat you alive (and we all know how carnivorous the Mouse House is). In 2021, the top 4 highest grossing films in the US (Spiderman, Shang-Chi, Venom, Black Widow) were all Marvel properties. In 2018 and 2019, the top film was also a Marvel joint; in 2017 it was a Star War and in 2016 it was a Pixar, both owned by Disney. Cinemas contributed to this homogeneity and are now facing the (terrible) consequences of their own actions.

Perhaps the greatest opportunity for cinematic distribution would come in the form of an unholy anti-Disney coalition. Last week it was reported that, for the first time, Disney+ had overtaken Netflix in terms of subscriber numbers: Disney has hit 221m, ahead of Netflix’s 220.67m. This is a product that was launched in just 2019 (Netflix launched as streaming service in 2007). Disney now dominates both theatrical and streaming distribution. If I’m John Cineworld or Henry AMC, I am, essentially, in a masochistic relationship with Disney. Disney make all the top-grossing movies these days — so I need them in order to survive — but they’re also using me as a marketing tool to propagate a system that is designed to destroy me. Disney will make more money, in the long-run, by killing cinemas, a fact that shouldn’t be forgotten.

What will the cinema of the future look like? One thing’s for sure, it won’t be a bunch of people sat in a room together with VR headsets glued to their faces. That, simply, isn’t cinema. Cinema is a communal experience, and one that we’re in danger of losing. But it may well be that ‘the cinema’ as a space — a space requiring considerable capital outlay — isn’t sustainable. We’ve known for some time — decades, I imagine — that theatrical distribution can’t exist without the sale of concessions. This is a very low-key version of the hybridisation that is, perhaps, inevitable. But it all requires radical thinking, not to mention money, and the most likely reality is that, in 50 years, all we’ll have experienced is shrinkage. Cinephiles will continue to know and love the cinema experience, but it won’t be mainstream anymore. People in major urban areas might go once or twice a year, but outside of that it will only be the French arthouse crowd who see things on the Big Screen. Shrunk, deprived, devalued.

This is all unless we start thinking about radical solutions. And let me say this: continuing to chuck egg after egg in the basket of screening the biggest Marvel movies for groups of indifferent teenagers just isn’t it. In the short term, you might feel the warming glow of ticket sales — but you are directly contributing to the marketing campaign of the platform that will kill you. It’s a horrible catch-22, but cinemas need to break the wheel.

Follow me on Twitter, if you want, but actually, much more importantly, subscribe to my newsletter which keeps me being able to afford to go to the cinema.

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Nick Hilton

Nick Hilton

27K Followers

Writer. Podcast entrepreneur. London. Interested in technology and the media. Co-founder podotpods.com Email: nick@podotpods.com.