Specialist
Former director at Odeon Cinemas Group Ltd
Agenda
- Attendance and pricing expectations in 2021-23
- Estate restructuring opportunities by brand
- Short- and medium-term profitability outlook, including rental expense trends in light of landlord negotiations
- CAPEX requirements by exhibitor
Questions
1.
How long it will take to open all UK cinema sites? What sort of capacity limits do you think will be in place and how might that change throughout 2021?
2.
You mentioned the number of blockbuster films that are likely to come to screens in 2021. What are the challenges around managing this stuffed pipeline of films?
3.
How much pent-up demand do you think there is for cinemas? Are there any statistics from additional geographies that we can analyse and therefore assume certain metrics around the UK?
4.
You mentioned statistics around potential box office recovery. What does this mean for exhibitors’ revenue recovery? Are you expecting a similar revenue trajectory, considering pricing, retail spend and advertising spend?
5.
How do you think unlimited subscriptions will play a part in the broader UK cinema landscape post coronavirus? We’ve discussed Cineworld and its Unlimited offering.
6.
How might exhibitors play around with price? You mentioned a 5% decrease in prices between 2017-19. How sustainable are current levels? Are you expecting further decline?
7.
Do you think there’s been any change in customers’ perceptions around value for money? A lot of films have moved direct to PVOD [premium video on demand]. Do you think that’s impacted customers’ opinions around the affordability of cinemas?
8.
You forecasted 10% smaller box office revenues post-coronavirus. Is it 10% smaller for the operators in the UK, or do you think there are opportunities to mitigate that decline through F&B [food and beverage] spend or advertising?
9.
To what extent do you expect closures across Cineworld, Odeon and Vue’s portfolios?
10.
What are your thoughts around Cineworld’s announcement that it has struck a deal with Warner Bros, shortening the theatrical window to 31 days in the UK and 45 days in the US? This is being spoken about positively within the company.
11.
What percentage of UK box office revenue is typically made within the first 31 days of a film’s release, excluding any potential impacts of customers waiting for it to reach PVOD?
12.
How might customer behaviour be affected by the theatrical window being shortened? If you assume 90% of revenue is made in the first four weeks, how might that change through potential customer behaviour shifts?
13.
What sort of precedent does it set for additional deals that are yet to be struck between exhibitors and studios?
14.
AMC has a 17-day theatrical window with Universal. What is your outlook for that deal? Do you think it is likely to change? Could Cineworld strike a different deal?
15.
Do you expect a potential Disney deal to be similar to the one struck with Warner Bros or AMC and Universal?
16.
Is there a realistic scenario post-coronavirus in which exhibitors regain an upper hand vs studios?
17.
How do you think studios will approach the big blockbuster films? Could releases such as the Bond films be sold exclusively to one of the streamers, such as Netflix, Amazon or Apple TV, or even released on studios’ own streaming platforms?
18.
We’ve heard potential positive news from regions such as China and Japan, indicating a lot of pent-up demand. Do we have any data from those regions that indicates how positive this demand is? To what extent do you think this is comparable to what could happen in the UK?
19.
One of the key cost lines for exhibitors is rental expenses. How do you think landlord discussions are progressing?
20.
Could you suggest which exhibitors you think are engaging with landlords and which ones aren’t?
21.
Could you estimate pre-coronavirus rental expenses as a percentage of revenue vs what you expect post coronavirus?
22.
Would it be more beneficial to EBITDA margins if operators or exhibitors move to a turnover rental model?
23.
You mentioned some fairly significant investment requirements across exhibitors. How do you think that is on a per-cinema basis? What CAPEX requirements do you expect in 2021 and beyond?
24.
Do you think that revenues and overall profitability for cinemas in mature markets such as the UK will end up better or worse post- vs pre-coronavirus, considering potential impacts to attendance and auxiliary revenue?
25.
Who do you think are the winners and losers in the UK cinema industry? You mentioned that there’ll be positives around profitability for operators that survive. Who do you think will do best out of the big three UK operators and how might independents compete?
