On this episode of the Boxoffice Podcast, we break down new release changes (Hotel Transylvania: Transformania moving to October and The Beatles: Get Back abandoning theatrical entirely) and Pacific/Arclight bankruptcy news before co-host Daniel Loria dives into the week’s main feature: a discussion with Phil Clapp—CEO of the UKCA and President of UNIC—on the U.K. cinema sector’s long-awaited second reopening, which began on May 17. An abbreviated version of that conversation is below; to hear Clapp’s complete insights, listen to the podcast episode below or on Spotify, Apple, or wherever you get your podcasts.
Don’t forget to tune in next Thursday for an in-depth recap of F9‘s domestic debut and international progress with Boxoffice Pro Chief Analyst Shawn Robbins.
Can you tell me a little bit about that run-up to the May reopening, which was essentially the second big reopening of U.K. cinemas? What were some of the lessons you learned from that first period of closures, and how did it influence your priorities this time around?
We had the first lockdown in March of last year. And then, really, cinemas only began to open again from July of last year, for what in the end turned out to be a quite limited period of two to three months before we had a second lockdown. And I think, not least given the fact that the slate of films wasn’t as strong as we’d like and given the fact that there was a great deal of uncertainty, that was not really a full-blooded reopening. It was really—although we clearly didn’t see it at the time—a kind of test run for May of this year. Learning around the safety protocols, learning around customers’ responses to safety protocols and the extent to which customers do or do not take responsibility for their own safety.
As we approached [the reopening in May], we were very confident that cinemas were able to deliver a safe and enjoyable experience without it being overly regimented or overly medicalised, if I can use that as a phrase. Undoubtedly, there were some cinemas that weren’t able to open last year for whom this was a new experience. There were also some cinemas whereby—we’ve had a furlough scheme in operation over in the UK, and I think it differs from the furlough scheme in one or two other territories, because staff on furlough are able to take other jobs at the same time. So there was a good deal of uncertainty, particularly amongst the larger circuits, about whether all staff would return. Whether they’d found other, better-paying or more enjoyable [jobs], or other jobs that they were more confident of having a return to.
But in the end, notwithstanding a few local difficulties, all of that played out as well as we could have hoped. Staff returned [and] were already aware of the safeguarding protocols. Usefully, many customers were now used to many of the things which were underway in cinemas, either because they’d been to the cinema, or because they’d seen it in other retail and other leisure, for example. Face coverings—which is not something the UK public have really been used to before, unlike some other territories—issues of social distancing, etc.
So we had a head start in May compared to where we would have been otherwise. But that still doesn’t mean that we could be complacent. All the signs that we’ve had from from surveys of customers in the run-up to reopening and post-reopening suggest that in terms of that safeguarding piece and in terms of that welcoming back piece, we’ve done as well as can be expected, notwithstanding whatever decisions our government or other UK governments take in terms of when those safeguards will be relaxed.
You mentioned that furlough scheme for UK cinema workers. We’ve seen very different approaches in how local governments support the arts and the cultural sector here in the US and Europe. What has been the situation in the UK? What support have you seen, and what really hasn’t been there so far?
There’s been a good deal of what you might call general business support. The furlough scheme was essentially open to all business sectors. And for broadly termed hospitality, leisure, and retail—and cinema clearly touches a number of those buttons—there have been additional elements of help. All cinemas, indeed all businesses, pay local business taxes. Those have been suspended for 12 month, and they’ve now extended that suspension for a further six months. The VAT, the additional sales tax which is on on cinema tickets and other venue tickets, has been reduced from 20 percent down to 5 percent. Although, to be perfectly honest, for most of that time cinemas haven’t been open, so it’s been kind of there in there in readiness. And we’re very much hopeful that it will be an additional benefit.
Very much as is the case in the US, for smaller venues there has been additional direct funding from government. We’ve had nothing like the challenges that I know U.S. colleagues have in accessing that, although it’s not always been as straightforward as we might have liked. And, again, that’s something which is being dealt with on a nation-by-nation basis. In England, for example, there have been two rounds of that funding, as there has been in Scotland, whereas colleagues in Wales and Northern Ireland have only had one round of that. There’s discussions about a second round now, not least given the ongoing uncertainty about further relaxation.
We can be nothing but grateful for the support that’s been there. Undoubtedly, things like the furlough scheme and, for the smaller operators, the direct funding they received have been a huge support and benefit. We did, as you would imagine, lobby the the UK government for funding support for the larger operators. The reality of the market in the UK is that the largest six or seven operators are 80 percent of the market. You could have spent—the government did spend—significant effort and resource supporting smaller operators without really understanding that the critical mass of the market is somewhere else, as it were.
But, as I’ve seen in other European territories, and I know is the case in the US, governments were very loathe to be seen to be supporting big corporations. I think the optics of that for government are not always the most straightforward or easy, despite the impact and the benefit that would have. So those companies have had to rely on the more general business support.
We’re not out of the woods yet, but we’re in a place where we fully suspect that a tiny number of cinemas would have closed. And, to be honest, no disrespect to those companies, but they were companies that were probably in distress before Covid, and all Covid really did was hasten their demise. But through support from government and obviously through the hard work and commitment of the people running these companies, we’re coming out of this [with] not just the cinemas we went into it with. Within the last four to six weeks, we’ve had six to ten new cinemas open for the first time post-Covid. No one is under-estimating the challenges the industry faces and will continue to face. But it’s certainly not as bad an outcome as it might have been without that support.