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Cinemas - UK - June 2012

“The dynamic pricing model is one which could transfer well to cinema, since the planning and cash flow advantages of encouraging early booking to operators are clear.”

– Michael Oliver, Senior Leisure and Media Analyst

Some questions answered in this report include:

  • 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?

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Table of contents

  1. 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

                                                                                                          Companies Covered

                                                                                                          • Apollo Cinemas Limited
                                                                                                          • Arts Alliance Media
                                                                                                          • Arts Council England
                                                                                                          • Cineworld
                                                                                                          • Cinven Ltd
                                                                                                          • De Vere Group PLC
                                                                                                          • IMAX Corporation
                                                                                                          • London Stock Exchange plc
                                                                                                          • National Amusements Inc.
                                                                                                          • National Electrical Manufacturers Association
                                                                                                          • Odeon Cinemas
                                                                                                          • Pearl & Dean Cinemas Ltd
                                                                                                          • Reel Cinemas Ltd
                                                                                                          • Showcase Cinemas
                                                                                                          • Sony Pictures Entertainment
                                                                                                          • Starbucks Coffee Company UK Ltd
                                                                                                          • Terra Firma Capital Partners Ltd
                                                                                                          • Tesco Plc
                                                                                                          • United Cinemas International (UK) Limited
                                                                                                          • Vue
                                                                                                          • WestLB AG

                                                                                                          Cinemas - UK - June 2012

                                                                                                          £1,995.00 (Excl.Tax)