Boxoffice LIVE Sessions Recap: UNIC’s Insights on the European Cinema Market

As cinemas across Europe continue to be affected by the financial fallout of the COVID-19 crisis, Boxoffice Pro hosted a LIVE Session with the executive leadership from UNIC, Europe’s trade body for cinemas, to discuss the state of European exhibition.

The conversation opened with an introduction from Andrew Sunshine, president of Film Expo Group, which organizes UNIC’s annual convention, CineEurope. This year’s edition of the event was originally scheduled for June in Barcelona before being moved to August 3-6 in the same venue. Sunshine expressed his confidence that the show will go on in August “as long as it can be done safely for all our attendees and guests.” A final decision on the status of CineEurope 2020 will be made by June 18.

In recent weeks, UNIC has been busy compiling data from its 38 member territories to provide greater visibility on each country’s measures and progress in combatting the virus and its subsequent economic toll. Additionally, the trade body has lobbied the European Commission in its efforts to defend exhibitors’ interests during the crisis.

The goal is to have data provided by UNIC help cinemas in discussions with their own national governments in the acquisition and distribution of emergency funds. Eventually, this open line of communication will also help cinemas adopt best practices guidelines based on the experience of their colleagues in other countries. “It’s about sharing information, sharing experience, and empowering national associations and nationally-based operators to make the arguments for support for their industry,” said Phil Clapp, president of UNIC and CEO of the UK Cinema Association (UKCA).

On the lobbying side, UNIC chief executive officer Laura Houlgatte-Abbott shared the trade body’s insights on the recently announced €500 billion European stimulus package. “One thing everyone needs to keep in mind is that any money that the EU is spending comes mainly from the member states. That’s where the budget comes from…[it] has to be implemented by EU countries, and they will decide how they will spend the money,” she said. “It’s up to regions within the EU to decide how they will spend that money and which industries they will support. We have more flexibility regarding state aid rules. Member states can decide to support a specific sector of the economy,” including cinema.

UNIC is currently working on a document that will detail how this economic stimulus can help cinemas in their respective countries. As this is still in its early stages, funding that might have already been earmarked still hasn’t made it way to businesses impacted by the crisis.

Fixed costs, such as rent, are a unique challenge that affects exhibition more than other segments of the entertainment sector. These costs can mount even when there is no revenue, creating a potential crisis for the industry. Clapp highlighted that cinemas are not alone in appealing to their local governments for aid.

“One of the positives for us as an industry, if you can see it as that, is that we’re not alone in this. There are other similar sectors, or other sectors with similar concerns: hospitality, leisure, and retail, for example. On a national and regional level, we can make common cause with those sectors in arguing our case to government,” he said. “The cinema sector has an importance far beyond its footprint in terms of employment and economy, but we can amplify that importance by making clear that if we disappear, there are a range of associated goods and services which also potentially go with us.”

As in other parts of the world, the funds are intended to provide liquidity while cinemas, along with all other out-of-home entertainment options, are closed. The length, and in some cases laws, associated with these closures vary in each of UNIC’s 38 member countries. In some countries, like France, strict lockdowns are expected to continue over the coming weeks. In other markets, economic and social activity has begun to slowly emerge as health care capacity recovers from an early surge of cases.

“We have a country like Austria that has just started to reopen—not cinemas, but economic activity—this week,” explains Jaime Tarrazón, SVP and treasurer of UNIC. “We can learn from different experiences in different countries, and that is the role UNIC is bringing to all its members and associations and companies around Europe and its territories,” he said. “It allows us to be more flexible and to have more elements to convince our governments or to advocate for different solutions. We have [experienced] this in different [stages]; there are some territories that were heavily impacted initially and others that have coped better with the current situation. By the end of all this, if we are good at combining our experiences and learning from them, we might be coming out of this more or less at the same time.”

Once cinemas do reopen, Clapp expects additional safeguards such as social distancing measures and sanitation procedures to be part of the process. “Our expectation is that cinemas will reopen with additional safeguards for customers. There won’t be a point of waiting until such some indeterminate point when those are no longer needed,” he said. “Even if the government doesn’t require them at the national level, there’ll be an expectation on the part of customers, not least because many of those cinemas that went into lockdown introduced social distancing before they went into lockdown. The nature of those [policies] will need to be a balance between providing suitable reassurance to customers that they’re entering into a safe environment that places a priority on people’s wellbeing and the fact that these are places of entertainment.”

Houlgatte notes that in some countries UNIC member cinemas have already been approached by local governments to start devising what some of these safeguards and policies will look like. She is confident any policies adopted by cinemas will be done in cooperation with their government rather than imposed by local authorities: “Each territory will probably have its own rules to implement regarding health and safety. We’ll make sure to exchange best practices and see how we can best help members.”

“We need to be mindful of that there are different kinds of political and cultural environments in every territory,” reiterated Clapp. “The fact that some territories are coming out of this sooner than others means that there’s an opportunity to learn lessons and to share that experience and seek a greater kind of quality in terms of that implementation.”

Houlgatte’s position at the head of UNIC is a constant reminder that coordinated efforts across the region are among the organization’s biggest challenge. “One of the beauties of Europe is its diversity. There’s not really consistency across the exit of the lockdown and calendars; each country has its own, and it can change within one or two weeks. We’ve seen some countries slowly starting reopening either their schools or some very specific shops,” she said, citing the case of the Czech Republic and markets like Austria and Denmark, where select lockdown measures have begun to be relaxed. “It’s going to vary territory by territory. Interestingly enough, when the European Commission tried to prepare an exit strategy for all EU countries, it was very badly received.”

Despite the varying timetables for a return to business, Clapp expressed optimism that cinemas wouldn’t have to endure an excessive wait to reopen. “We have the ability to control admission, to the extent that people are willing to abide by it, through [reserved] seating. There is the technology now in place to allocate seating for people to maintain social distancing,” he said. “There’s a danger sometimes, in the U.K. and elsewhere, of [combining] cinemas and theaters with bars, cafes, restaurants, and other public venues, which have much more open access. What we should be looking at and sharing is how our technologies can make [reserved] seating more straightforward in cinema than they are arguably in other sectors.”

Clapp also used the opportunity to stress the importance of maintaining a robust theatrical exclusivity window through this crisis. “We’ve maintained an open dialogue with many colleagues in distribution, particularly at the major studios.” he said. “I think it’s worth reiterating that we are in a genuinely unique situation at the moment. The decision on the part of some studios to bring films early to Video on Demand (VOD), films [released] during a theatrical window at a time when cinemas were closed, has little relevance…. I think that is a consequence of this unique set of circumstances. I don’t believe that changes the equilibrium of the industry. There is absolutely no sense that once we’re back to whatever approaches normality that the window won’t continue to exist and continue to work for the sector. And by ‘the sector,’ I mean not just cinema exhibitors but also for our colleagues in distribution.”

It is unlikely for any sort of global wide release to take place until cinemas can effectively reopen and at least partially recover from the COVID-19 economic crisis. Social distancing and sanitation guidelines could help boost consumer confidence in the theatrical experience, but a wider effort to encourage moviegoing will be crucial for a true recovery to take place.

Different countries have already begun sharing messaging around these recovery efforts, in some cases tying the passion for moviegoing to fundraising efforts supporting cinema workers unemployed by the crisis. In the United States, Lionsgate is working with Fandango and the National Association of Theatre Owners on a streaming series benefiting the Pioneers Assistance Fund.

In France, AlloCine (part of Boxoffice Pro parent company, Webedia) has begun rolling out a social media campaign rallying around the hashtag #oniratousaucinema to support the moviegoing experience. Those efforts have been carried over to the United States through The Boxoffice Company using the hashtag #MoviesTogether.

Clapp sees a more segmented approach when the time comes to start promoting a return to cinemas. “There’s a danger in seeing the audience as one homogenous group. We know that this virus presents a greater risk to some subsectors of the audience than others. One of the things we need to be mindful of is that different audience subsets may have a different perception of the threat that going to the cinema poses.” He suggests campaigns that could focus on the excitement of going to the movies for younger audiences, with different efforts focusing on the safeguards in place targeted for older moviegoers who might be at higher risk of complications from the virus. “When we go back, are we providing content for those people we think are most likely to come back, or are we also mixing in content for people we most need to encourage to come back because they’re the people who are most hesitant about doing so? The lesson I take from that is this needs to be analysis- and insight-driven. There can’t be an assumption that the message that works for one part of the audience will work for another part of the audience.”

While UNIC supports the messaging around the promotion of the moviegoing experience, it believes these efforts are likely to take a national or regional approach rather than a coordinated global campaign. “There isn’t a ‘one-size-fits-all’ message,” says Houlgatte. “I think it will vary a lot from territory to territory, each country deciding what works best for them since they will reopen at different times. Our role in this as UNIC would be to share information, promote these campaigns, and talk about the value of going to the cinema and sharing that amazing experience together.”

With wide releases off the schedule in the United States until the second half of July, the European sector will continue to wait out this crisis period until governments can provide a clear timetable for recovery. In this capacity, the global cinema industry has already learned a valuable lesson from the Chinese market in what not to do once the health crisis begins subsiding. “We can’t open cinemas too soon,” stressed Tarrazón. “Because if you are forced to close them the following week, it doesn’t send a good example or message to the audience.”