The Role of Multiplex Cinemas
The development in several European countries of multiplex
cinemas, defined here as purpose-built multi-screen cinema complexes with
at least 8 screens, has led to mixed reactions from the public on the one
hand and from the exhibition sector on the other. Undoubtedly this development
has been the most fundamental change in the exhibition sector for decades,
and comes after a long period of decline in cinema-going in all European
countries. Furthermore, the growth of multiplexes has been faster and more
extensive in some countries then in others. For example, multiplex penetration
in the UK is approximately five times that in Germany or Spain.
For the European exhibition industry it is important
to understand fully the phenomenon of multiplexes in all its implications.
It is also crucial to realise how far the introduction of multiplexes is
likely to go and whether they can be expected to be introduced on a more
comprehensive scale throughout Europe.
This paper draws on existing studies and original research
on multiplexes to reach a comprehensive understanding of the phenomenon.
Section 1.2 reviews the experience to date
and reports findings from recent studies which have commented on the advent
of multiplexes, the likely reasons for their success and their impact on
the cinema sector. In addition it presents data from the MEDIA Salles European
Cinema Yearbook 1993. This allows us to illustrate the development of the
multiplex against a background which varies considerably between countries,
ranging from the UK, the pioneering country(1),
where multiplexes have been established as early as 1985, to Greece where
99% of the cinemas are single screens.
(1) The first European multiplex was
actually built in Sweden in 1980, but the UK was the first country to develop
the concept on a large scale.
In Section 1.3 we use the LE/BIPE survey to
analyze the profile and characteristics of the European cinema sector with
respect to a classification of cinemas by number of screens. The survey,
which includes selected interviews with cinema operators and a quantitative
questionnaire, is unique in its coverage of the phenomenon of multiplexes
across Europe. For the first time a large data set of screens across Europe
has been collected, which allows the role and impact of multiplexes to
be evaluated. We also use the results from the LE/BIPE survey to test empirically
what factors - other than simply the quality of the films being shown -
explain the success of individual cinemas in attracting audiences. We test
in the form of a regression analysis the utilisation levels of over 1,000
screens over a one week period in March 1993. We also test the factors
influencing admission levels per seat (our preferred measure of success)
on the basis of annual information on attendances in 1991 and 1992. These
results confirm the positive impact of multiplexes on capacity utilisation.
Section 1.4 discusses the economics of multiplexes
from a theoretical point of view. The aim is to reach an understanding
of the key factors which are likely to make a multiplex more attractive
for audiences and provide a more efficient operation for distributor and
exhibitors alike. This analysis helps to clarify the issues and underlines
the results from the empirical study of the impact of multiplexes. This
section is theoretical in that it draws on simple models of the key features
of cinemas and cinema-going. Illustrative calculations are presented which
demonstrate the advantages of multiplex operations as against single screen
Our unique survey of over 1,000 screens in Europe confirms
that multi-screen cinemas exhibit a higher percentage of modern facilities
and achieve more admissions per seat than cinemas with one or two screens.
Multiplexes, defined as cinemas with at least 8 screens,
achieve the highest level of admissions per seat for the one week period
surveyed in Spring 1993 with 7.7 admissions per seat, whereas average admissions
per seat in our sample was 3.4 per week.
Admissions per seat for survey period in March 1993:
6 & 7 screens
The LE/BIPE survey also shows that performance of cinemas
in terms of capacity utilisation per seat is significantly better in:
Þ cinemas located in
town centres of cities with a population of more than 1,000,000
Þ cinemas with free
or cheap parking
Þ cinemas with restaurant
or poster shops
Þ recently modernised
Whilst our economic analysis leaves no doubt that the multiplex
phenomenon will spread throughout Europe there are several voices of reason
that point to more cautious conclusions. There can be no doubt, however,
that multiplex cinemas will lead to a more modern exhibition sector in
those countries where modernisation of cinemas has not yet happened. It
is only through the offer of a high quality cinema experience that cinema-going
in Europe can be revived. Multiplexes are key to that development, but
they are a threat to many independent single screen cinemas who do not,
or cannot, upgrade their facilities.
It is the combination of number of screens, site specific
factors and location that explains superior performance of cinemas; it
is therefore not only multiplexes that can achieve high capacity utilisation.