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CineEurope, the annual convention of UNIC, the trade body representing European cinemas, was originally scheduled to take place in Barcelona this month. The onset of Covid-19 forced the convention’s organizers, Film Expo Group, to shift their strategy: initially rescheduling the event for August, eventually moving the entire program online. Front and center in the conversation: the return of European cinemas as the world continues to grapple with Covid-19.





It’s hard to quantify the full impact of Covid-19 on the cinema industry. From an M&A perspective, the abandoned acquisition of Cineplex, Canada’s leading circuit and the third-largest in North America, by UK-based Cineworld, is the most high-profile example of plans going awry. The planned acquisition, announced in December 2019, would have made Cineworld the world’s largest circuit with over 11,200 screens. The deal is now scrapped, however, with both circuits resolving to take the matter to court. 





Based on box office receipts, Covid-19 is estimated to have caused a 70 percent year-to-date slide against last year’s record-setting earnings, according to David Hancock, director of cinema at OMDIA. The firm forecasts a drop of 58 percent in global box office revenue in 2020, outlining a range of $20 to $31 billion in losses from a year that was expected to once again surpass $40 billion. A big factor in that drop is the extended period of closures in China, where cinemas have been closed since January. Hancock estimates that China’s closures are mostly responsible for a $4 billion year-over-year change in global box office earnings for the first quarter of 2020 alone. 





Cinema closures in Europe formally began within a month of China’s shutdown. The Italian government ordered movie theaters in its northern states to close on February 23, as reports of an outbreak in the Lombardy region made global headlines. Northern Italy represents around 48 percent of the country’s total screens; the rest of the country’s cinemas closed their doors by March 8. The rest of the region followed suit: Belgium (March 14), France (March 14), Germany (March 14-18), Russia (March 26), Spain (March 14), and the United Kingdom (March 17-20) all shuttered in subsequent weeks. 





While cinemas began reopening in some of the region’s top markets as early as April, the road to recovery is expected to drag on for months. UNIC territories are expected to be fully operational by early August––observing local restrictions on admission, social distancing protocols, and enhanced sanitary measures.





Image courtesy: Cineworld



Cineworld CEO Mooky Greidinger admits that while the pandemic took him by surprise, his circuit’s reaction quickly shifted to finding a safe way to re-open while still retaining the comforts of the hospitality business. Cineworld and its subsidiaries have already begun to resume operations under a set of Covid-19 guidelines, with its UK theaters and US Regal Cinemas locations set to open on July 10. “We need to be very careful but also make sure we don’t overdo it,” he says. “We don’t want to create a hospital atmosphere in the cinema. We don’t want to be running after the customers on every step that they [take].” 





Guidelines can only go so far and will require adherence and personal responsibility from guests to minimize risk. That balance between corporate policies and enforcement will be a crucial and delicate factor during the recovery effort. Across the Atlantic, AMC Theatres faced public backlash after stating it would “strongly encourage,” though not require, audiences to enter its cinemas with face masks once they resume operations in mid-July, claiming the matter had become politicized in the United States. The stance drew harsh criticism from audiences, culminating with the circuit revising its policy a day later to make face masks mandatory for all audiences. 





In Europe, however, the face mask policy has drawn considerably less scrutiny. The use of face masks by audiences is recommended but not required in markets such as France and the Czech Republic. In countries such as Austria, Germany, and Italy audiences are required to wear masks when entering a cinema but allowed to remove them once inside an auditorium. 





Regardless of the specific policies across individual circuits and entire countries, the reality remains that there is no risk-free guarantee for audiences returning to cinemas as they re-open. The support of audiences won’t be predicated by sanitary measures or programming, but will rather come down to individuals’ risk tolerance depending on personal and demographic factors as well as the prevalence of positive cases at any point in time. That uncertainty is what Kinepolis CEO Eddy Duquenne cites as the biggest challenge as his multi-national circuit embarks on its re-opening effort through June





Image courtesy: Kinepolis



“The first thing I’ve learned from this situation is how labor-intensive it is to manage closed theaters, it is much more labor-intensive as a CEO than it is to manage open theaters,” he says. “We don’t know how things are going to turn out: when we will be able to open, how we’ll open, and what the impact will be. That’s the landscape we’re working in. As a company, we are preparing for the worst and hoping for the best.”





Without an objective sample of box office data, results from the global re-opening effort have been largely anecdotic. Although several circuits report week-to-week increases in attendance, they don’t take into consideration lower ticket prices or the pent-up demand after months of stay-at-home orders. Sony Pictures Entertainment president Steven O’Dell is nevertheless optimistic about the return of cinemas. “You don’t really know what the market’ is going to be like or the way people will behave until you show them something,” he says. “We came out with some carryover films that had stopped their releases when Covid started in January: Little Women, in Denmark and Japan, and we opened a Korean film as well, and could not believe the response.” Little Women took in $760,000 from 440 screens across 13 markets over the weekend of June 12-14, according to the studio’s first box office report to the press since mid-March. 





Though those figures don’t approximate the usual summer blockbuster numbers we’ve grown accustomed to from studios, they are an indication that the global cinema business is on its way to resuming. “Distribution and exhibition companies need to assess what success is going to look like initially, it’s not going to be the same,” explains Cathleen Taff, president of distribution at the Walt Disney Studios. “We’ve got to make sure expectations are based on reality.” 





That reality, for the foreseeable future, will be distinctly different from anything the industry has faced before.


The post CineEurope 2020: European Cinemas Take on the Re-Opening Effort appeared first on Boxoffice.





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