Cinemas - UK - June 2012

INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
Admissions and spend per head growth buoy market
Figure 1: UK cinema market, by value, 2007-17
Market factors
Figure 2: Trends in combined box office value of top 20 films released in the UK and RoI, 2010 and 2011
Figure 3: Digital and 3D digital screens in the UK, 2007-11
Figure 4: Trends in share of UK cinema box office, by film type, 2010 and 2011
Companies, brands and innovation
Figure 5: Leading cinema operators in the UK, by number of screens, December 2011
The consumer
Figure 6: Frequency of cinema-going, March 2012
Figure 7: Cinema visiting and booking behaviour, March 2012
Figure 8: Attitudes towards cinema, among cinema-goers, March 2012
Figure 9: Interest in potential improvements or innovations to cinema experience, March 2012
What we think
ISSUES IN THE MARKET
What can cinema operators learn from other leisure markets?
What other areas can cinemas look to for additional revenues in the future?
How might operators capitalise more on the impulse nature of the cinema-going experience?
How much more upwards price movement can consumers withstand?
FUTURE OPPORTUNITIES
Trend: Brand Review
Trend: Access All Areas
2015 Inspire Prediction: Access Anything, Anywhere
INTERNAL MARKET ENVIRONMENT
Key points
Greater product consistency pays off in 2011
Figure 10: Box office results for the top 20 films released in the UK and Republic of Ireland, 2010
Figure 11: Box office results for the top 20 films released in the UK and Republic of Ireland, 2011
Digital and 3D capability grows…
Figure 12: Digital and 3D digital screens in the UK, 2007-11
…but box office falters
Figure 13: Top ten 3D releases, 2010
Figure 14: Top ten 3D releases, 2011
BROADER MARKET ENVIRONMENT
Key points
Cinema proves to be resistant to economic weakness…
Figure 15: GDP, PDI, consumer expenditure and savings, at constant 2012 prices, 2007-17
…as UK falls back into recession
Figure 16: GDP quarterly percentage change, Q1 2007-Q1 2012
Consumers remain wary
Figure 17: Trends in consumer confidence, January 2008-April 2012
Youth unemployment still growing
Figure 18: Unemployment rate, by age group, November 2010-January 2012
Age trends to impact on programming?
Figure 19: Trends in the age structure of the UK population, 2007-17
AB growth could be positive for industry
Figure 20: Forecast adult population trends, by socio-economic group, 2007-17
Retired only lifestage group set to grow significantly
Figure 21: Forecast adult population trends, by lifestage, 2007-17
People get connected
Figure 22: Ownership of consumer technology products, December 2011 and January 2012
Extremes of weather prove frustrating for cinema industry
Figure 23: UK weather trends, 2007-11
COMPETITIVE CONTEXT
Key points
Other youth-oriented leisure sectors feel the pinch
Figure 24: Value of the UK leisure* industry, by segment, 2006-11
WHO’S INNOVATING?
Key points
There’s an app for that
Live, 3D broadcasts hit the big screen
The 4D revolution
Premium offerings abound
MARKET SIZE AND FORECAST
Key points
Industry stays buoyant through admissions and spend per head growth
Figure 25: UK cinema market, 2007-17
Forecast
Figure 26: Forecast UK cinema revenues, 2007-17
Figure 27: Forecast UK cinema admissions, 2007-17
SEGMENT PERFORMANCE
Key points
Box office continues to drive growth as secondary spend remains flat
Figure 28: Breakdown of UK cinema market, 2007-11
Seasonality a factor but dictated by product
Figure 29: UK cinema monthly admissions, 2007-11
Figure 30: UK cinema monthly admissions, 2007-12
Key metrics on the increase
Figure 31: Trends in UK cinema sites and screens, 2007-11
March of the multiplex
Figure 32: UK multiplex cinema development, 1985-2011
London biggest region but Northern Ireland sees strongest growth
Figure 33: Trends in UK cinema screens, by region, 2007-11
MARKET SHARE
Key points
Odeon biggest player by sites, screens…
Figure 34: Leading cinema operators in the UK, by sites and screens, December 2011
…but Cineworld leads box office
COMPANIES AND PRODUCTS
Key points
 MAJOR CIRCUITS
Cineworld Group PLC
Figure 35: Financial performance of Cineworld Group plc, 2007-11
Figure 36: Breakdown of Cineworld Group plc’s revenue, by segment, 2008-11
Odeon & UCI Cinemas Group Limited
Figure 37: Financial performance of Odeon & UCI Cinemas Group Ltd, 2007-11
Vue Holdings (UK) Limited
Figure 38: Financial performance of Vue Entertainment Holdings (UK) Ltd, 2007-11
Figure 39: Financial performance of Apollo Cinemas Limited, 2007-11
Figure 40: Breakdown of Apollo Cinemas Ltd’s revenue, by segment, 2009-11
NATL Amusements (UK) Limited
Figure 41: Financial performance of NATL Amusements (UK) Ltd, 2006-10
City Screen Limited
Figure 42: Financial performance of City Screen Ltd, 2006-10
BRAND COMMUNICATION AND PROMOTION
Key points
Film and cinema adspend close to breaking through the £200 million barrier
Figure 43: Main media expenditure by UK film distributors and cinema exhibitors, by type of film certificate, 2008-11
TV tops but outdoor closing gap
Figure 44: UK film distributors' media expenditure, by channel, 2008-11
Spending big no guarantee – but it helps
Figure 45: UK film distributors, top ten advertisers, 2008-11
A few companies try to break the mould
Figure 46: UK film distributors – top ten advertisers, by channel, 2011
Cineworld dominates cinema spending
Figure 47: UK cinemas – top advertisers, 2008-11
Figure 48: UK cinemas – top advertisers, by channel, 2011
Digital activity continues to grow
Cineworld pushes into lead in website unique visitors rankings
Figure 49: Trends in numbers of unique monthly visitors to UK cinema operators’ websites, May 2009-April 2012
CINEMA VISITING FREQUENCY
Key points
Eight out of ten people visit the cinema
Figure 50: Frequency of cinema-going, March 2012
CINEMA VISITING AND BOOKING BEHAVIOUR
Key points
More people taking in food and drink than buying it
Figure 51: Cinema visiting and booking behaviour, March 2012
Cinema-going still an impulse activity
Weekday winners
3D achieves near-40% penetration of cinema-goers
Promotional days chime with consumers in the current economic environment
Six in ten watch movies at home
Getting social
Spectacle wearers see red
Frequent cinema-goers more likely to buy food and drink than bring it
Figure 52: Cinema visiting and booking behaviour, by highest frequency of cinema-going, March 2012
Figure 53: Cinema visiting and booking behaviour, by lowest frequency of cinema-going, March 2012
ATTITUDES TOWARDS CINEMA
Key points
Pricing continues to be an issue in the current economic environment
Figure 54: Attitudes towards cinema, March 2012
Ticket troubles in prospect?
3D glasses: to pay or not to pay?
No rush, watch it at home
Home comforts hard to beat
3D divides opinion
Cinema-goers even more irritated by pricing
Figure 55: Attitudes towards cinema, by highest frequency of cinema-going, March 2012
Figure 56: Attitudes towards cinema, by lowest frequency of cinema-going, March 2012
Even nine in ten buyers of food and drink at cinemas agree it is overpriced
Figure 57: Attitudes towards cinema, by most popular cinema visiting and booking behaviour, March 2012
Figure 58: Attitudes towards cinema, by next most popular cinema visiting and booking behaviour, March 2012
Figure 59: Attitudes towards cinema, by other cinema visiting and booking behaviour, March 2012
Figure 60: Attitudes towards cinema, by least popular cinema visiting and booking behaviour, March 2012
CHAID ANALYSIS
Methodology
Are ticket price increases hurting the family market?
Figure 61: ‘Cinema tickets are becoming too expensive’ – CHAID – Tree output, March 2012
Figure 62: Cinemas – CHAID – Table output, march 2012
INTEREST IN POTENTIAL IMPROVEMENTS OR INNOVATIONS
Key points
More imaginative pricing strategies required?
Figure 63: Interest in potential improvements or innovations in cinema experience, March 2012
Less frequent cinema-goers favour booths
Figure 64: Interest in potential improvements or innovations in cinema experience, by highest frequency of cinema-going, March 2012
Figure 65: Attitudes towards potential improvements or innovations in cinema experience, by lowest prevalent frequency of cinema-going, March 2012
All-day ticket could be good for food and drink revenues?
Figure 66: Attitudes towards potential improvements or innovations in cinema experience, by most popular cinema visiting and booking behaviour, March 2012
Figure 67: Attitudes towards potential improvements or innovations in cinema experience, by next most popular cinema visiting and booking behaviour, March 2012
Figure 68: Attitudes towards potential improvements or innovations in cinema experience, by other cinema visiting and booking behaviour, March 2012
Figure 69: Attitudes towards potential improvements or innovations in cinema experience, by least popular cinema visiting and booking behaviour, March 2012
CINEMA TARGETING OPPORTUNITIES
Key points
Figure 70: Cinema target groups, March 2012
Buffs
Disgruntled
Home fans
Buffs and Disgruntled equally likely to be regular cinema-goers
Figure 71: Frequency of cinema-going, by target groups, March 2012
Disgruntled most likely to take food and drink into the cinema with them
Figure 72: Cinema visiting and booking behaviour, by target groups, March 2012
Disgruntled most open to innovations, particularly on pricing
Figure 73: Attitudes towards potential improvements or innovations in cinema experience, by target groups, March 2012
APPENDIX – BRAND COMMUNICATION AND PROMOTION
Figure 74: Trends in numbers of unique monthly visitors to UK cinema operators’ websites, May 2009-April 2012
APPENDIX – MARKET SIZE AND FORECAST
Figure 75: UK cinema value market size forecast scenarios, 2012-17
Figure 76: UK cinema admissions forecast scenarios, 2012-17
APPENDIX – CINEMA VISITING FREQUENCY
Figure 77: Highest frequency of cinema-going, by demographics, March 2012
Figure 78: Lowest frequency of cinema-going, by demographics, March 2012
APPENDIX – CINEMA VISITING AND BOOKING BEHAVIOUR
Figure 79: Most popular cinema visiting and booking behaviour, by demographics, March 2012
Figure 80: Next most popular cinema visiting and booking behaviour, by demographics, March 2012
Figure 81: Other cinema visiting and booking behaviour, by demographics, March 2012
APPENDIX – ATTITUDES TOWARDS CINEMA
Figure 82: Most popular attitudes towards cinema (any agree), by demographics, March 2012
Figure 83: Next most popular attitudes towards cinema (any agree), by demographics, March 2012
Figure 84: Attitudes towards cinema, by most popular attitudes towards cinema (any agree), March 2012
Figure 85: Attitudes towards cinema, by next most popular attitudes towards cinema (any agree), March 2012
APPENDIX – ATTITUDES TOWARDS POTENTIAL IMPROVEMENTS OR INNOVATIONS
Figure 86: Most popular attitudes towards potential improvements or innovations in cinema experience, by demographics, March 2012
Figure 87: Next most popular attitudes towards potential improvements or innovations in cinema experience, by demographics, March 2012
Figure 88: Other attitudes towards potential improvements or innovations in cinema experience, by demographics, March 2012
Figure 89: Attitudes towards potential improvements or innovations in cinema experience, by most popular attitudes towards cinema (any agree), March 2012
Figure 90: Attitudes towards potential improvements or innovations in cinema experience, by next most popular attitudes towards cinema (any agree), March 2012
Figure 91: Attitudes towards potential improvements or innovations in cinema experience, by most popular attitudes towards potential improvements or innovations in cinema experience, March 2012
Figure 92: Attitudes towards potential improvements or innovations in cinema experience, by next most popular attitudes towards potential improvements or innovations in cinema experience, March 2012
Figure 93: Attitudes towards potential improvements or innovations in cinema experience, by other attitudes towards potential improvements or innovations in cinema experience, March 2012
APPENDIX – CINEMA TARGETING OPPORTUNITIES
Figure 94: Target groups, by demographics, March 2012