The theatrical exhibition sector remains in a state of flux following the COVID-19 pandemic finds an ICO survey undertaken in September 2023, which gathered responses from 157 independent cinemas, small chains, and mixed arts venues on the current financial health of the sector.

The survey reveals that a large proportion of venues (45%) forecast operating at a loss this financial year. Just 10% of venues reported being very confident of their financial position 42% of survey respondents said that, if the situation persists, they could not continue operating in a year’s time.

These venues, which serve as vital community hubs for a diverse range of audiences, also have a wider positive economic impact on the cities, towns and rural areas where they are located. Most independent cinemas are significantly invested in being a cultural space, reaching new audiences, showing a broader selection of films, focusing on environmental sustainability, and improving accessibility.

The impact of the loss of even a small number of independent cinemas would be felt beyond the communities that they serve, as their closure could seriously impact the viability of distributors releasing independent films.

Director of the Independent Cinema Office, Catharine Des Forges said, “These findings paint a concerning picture and suggests the urgent need for some type of intervention in order to safeguard these cultural and economic assets for local communities across the UK. Cinemas have had to cope with changes to operating models, shifts in audience behaviour and the rise of online streaming, with all these factors liable to future fluctuations. There are also obvious economic challenges, with reduced availability of public funding, a cost-of-living crisis, and a rise in energy prices, all of which have impacted the sector and seen the recent closures of key independent cinemas.

Once closed, cinemas are unlikely to return given the significant amount of capital needed to restart operations”.

The findings of this report will help shape the ICO’s suggestions for how support could be provided when making their submission of evidence to the UK Parliament Culture, Media and Sport Committee’s Inquiry on British Film and High-End Television in October 2023.

KEY FINDINGS:

• 45% of respondents forecast that they would be operating with a loss at the end of this financial year. 29% forecast a balance, 20% forecast a profit, and 6% were unsure.
• 61% of respondents said they were not meeting their income targets for this financial year. 28% were meeting their income targets, 8% were unsure and 3% had not set targets. On average respondents were 10% under their income targets.
• When asked how long the venue could continue to operate within the current climate, 42% answered between three months to a year.
• 76% of respondents project a loss in admissions this financial year in relation to ‘normal’ operating years. 11% project a growth in admissions. (Admission figures across UK cinemas in 2023 are 25% lower than 2019 (last pre-pandemic year), to the period to the end of August (source UKCA https://www.cinemauk.org.uk/the-industry/facts-and-figures/).
• 50% of respondents said they need further public/government financial support to remain operational. 21% do not require further support and 29% were unsure. The most useful support was via organisational grants (65%) and a reduction in Sales VAT (61%).
• 53% of respondents receive public funding. 43% did not and 4% did occasionally. The largest proportion of respondents receive funding from their local authority (47%), the BFI (37%) and their local Film Hub (30%).
• 31% of respondents had made redundancies in the past three years. 56% had not made redundancies. 5% were unsure, and 8% replied ‘other’ – as staff left their roles they had not been replaced, they rely on volunteers.
• The top priorities for venues over the next one to three years are increasing audiences (87%), increasing revenue (70%) and engaging new audiences (64%).

To read the full report please visit the Independent Cinema Office website.

This survey was undertaken by the ICO with the support of the BFI, awarding funds from the National Lottery.

About the Independent Cinema Office 
The Independent Cinema Office (ICO) is the UK’s national body that supports independent cinemas through programming, training, consultancy, cultural distribution and organising Screening Days events that help cinemas broaden their programmes. Their mission is to build an open, thriving, robust cinema sector and for everyone to have access to cinema that nourishes the soul and changes lives. Internationally, the ICO runs intensive training programmes, Developing Your Film Festival and Sponsorship Success for Film Festivals, as well a variety of courses on their Online Learning Platform.