Exhibitor Scott Seddon on the challenges of relaunching the cinema industry

22 April, 2020 by Don Groves

Scott Seddon.

Independent Cinemas Australia president Scott Seddon addresses the challenges facing cinemas in negotiating with landlords, cash-flow problems with JobKeeper and the need for a coordinated industry-wide approach when cinemas re-open.

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Q: I know no one can predict when cinemas will re-open but, as you know, in the US Cinemark and other chains aim to be back in business by July. Does that give you hope that July may be doable here?

A: There is always hope but the safety of exhibitors and their team members and of our patrons has to be the first priority. The last thing we want to do is to open prematurely and then be forced to close for another two months. When we re-open it needs to be a carefully coordinated plan. I think there is a reasonable chance that drive-ins may get a few weeks head start but we shall have to wait and see.

Q: In the US the proposed federal guidelines stipulate strictly limiting seating capacity for social distancing, including cinemas. That might be necessary in Oz?

A: In the days prior to March 23 when Australian cinemas were mandated to close, we were under the 4 sq metres per customer rule and I am thinking that would likely be the case in a re-opening scenario. Under that, cinemas were seeing their maximum occupancy at between 30 and 60 per cent. The 1.5 metre spacing between individuals or family groups in most cases meant two empty seats between individuals or family groups which further lowered the seating capacity.

In that last week, when the world was abuzz with the postponement of movie releases and the box office had dived it wasn’t an issue. But in determining profitability and dealing with crowds for major releases under these restrictions there will need to be much financial analysis before the doors open. I believe we will see a big swing towards online sales and customer spacing managed at that level.

Q: Apart from extra cleaning, some US exhibitors are talking about doing temperature checks on patrons. Can you see that happening here?

A: It is not our role to rule anything in or out. The two key issues are that the public health authorities need to be confident that we are not contributing to an uptick in the curve and that patrons feel their safety is being considered in their cinema experience. I note that the Sydney Fish Markets on Good Friday did temperature checks on everybody.

My personal feeling is that multiple hand wash stations at the entrance would probably be more effective than temperature testing but we must wait and see. You probably need to look at the extra labour costs in temperature testing which would have to be passed on to the patron, as will all additional costs if cinemas are to be viable. However if it leads to patrons, especially our seniors, feeling safer then it may happen.

Q: I’ve seen worst-case scenarios of up to 30 per cent of indie cinemas in the US closing their doors permanently. I hope the vast majority of ICA members will not be lost to the industry.

A: I also hope that Australians do not lose their independent cinemas. It is to a great extent in the hands of the government and the banks; however the resourcefulness of exhibitors and the lateral thinking of distributors will play a key part as will the most important group, the cinemagoing public.

Q: Generally speaking are your members finding landlords and banks are being supportive? Most have been able to access JobKeeper for their employees except casuals?

A: We are hearing mixed reports on the banks, especially for existing customers. Following the Royal Commission it seems most have genuinely made an effort in general to assist. Some landlords are waiting for their States to pass legislation to endorse the mandatory code of conduct for rent relief but many others are in discussions and some have already reached agreement with their landlords.

However many landlords, often smaller ones, are struggling both financially and to come to grips with the mandatory code and what is required of them. JobKeeper isn’t really a great help for cinemas. Certainly it does keep the relationship between staff and the cinema alive for six months but what if the closure of cinemas is longer than six months? Some staff may take other jobs anyway and still be receiving JobKeeper and some will choose to stay with the new job post pandemic.

JobKeeper requires cinemas to ensure they have three fortnight’s pay available. This gives the staff money to spend on their bills and at other businesses whilst neither they nor anybody can spend money at the cinema.

It takes pressure off Centrelink and stops those people from being included in the unemployment statistics but the payment to employers in arrears makes it a gigantic cash flow impost on cinemas and makes exhibitors divert that precious money away from paying the costs required to keep the cinemas alive in hibernation and in a position to pay film hire and open their doors when the time comes.

Q: Are you talking to distributors about tentative releases plans for their big titles, depending on the timing of all-clear to re-open. So, for example, if you’re back in business in August you can count on X number of films for that month?

A: I have spoken to our friends in distribution. I think most of them have a number of versions of release schedules based on various possible opening dates. There are a number of key factors. Firstly there is the timing of the opening and the level of occupancy and other restrictions and also the timing of the relaxation of them. Secondly, there is the willingness of the public to come out and feel safe in the cinema environment.

On that first visit they need to feel safe enough to come back the second time and so on. In this environment we will see the third issue addressed and distributors will confirm what titles will be released and when.

Q: Are distributors and exhibitors discussing an industry-wide campaign to win back cinemagoers?

A: I am on record as saying that we should seek temporary approval from the ACCC so ICA, NACO, MPDAA and AIDA can sit down together and coordinate the relaunch of the industry. The experience in China a few weeks ago [when cinemas were forced to close again after fresh COVID-19 oubreaks) shows that the relaunch has to be coordinated and responsive to the environment.

Relaunching the industry will not be easy. We don’t want to spend funds on re-hiring staff, replacing outdated candy bar stock and marketing when we are unlikely to turn a profit for a month.

Q: Do you still have concerns that some older people, in particular, may be reluctant to be part of large public gatherings?

A: My experience talking with our senior patrons on the days leading up to March 23 was that they wanted to live their lives and they would rather risk infection that be locked down. One lady said that nobody had asked seniors what they wanted. The authorities had just made the decisions to “protect” them without consulting seniors themselves.

At our own cinema many seniors come in minibuses on organised outings from retirement villages or community groups. Many others come under their own steam. We are yet to see what happens with these two distinct groups. My feeling is that they will be very keen to get out as long as they feel safe in the cinema environment.

Q: Which films are you most looking forward to screening? I guess the list includes Warner Bros.’ Tenet and Wonder Woman 1984, Disney’s Mulan and Black Widow, Sony’s Monster Hunter and Universal’s No Time to Die?

A: Clearly we are all looking forward to seeing all these major titles but programming the first two months after the initial lifting of restrictions, be it with now titles or re-runs, will be the most challenging programming decisions we have ever made.

 

 

 

 

 

 

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