UK reopening: Did cinema chains just pull a rabbit out of the hat?

SONY'S animated comedy "Peter Rabbit 2" drove UK cinemas' box office takings in their reopening weekend to the highest since the pandemic took hold last year, giving a boost to cinema chains which had been burning through cash during months of lockdowns.

Overall box office collections at the weekend came in at more than 7 million pounds ($9.91 million), with the speed and size of the return beyond anything most companies were expecting, UK Cinema Association CEO Phil Clapp told Reuters on Monday.

That compares with a box office of 16.6 million pounds for the whole of May 2019, before the crisis. Box office revenue slumped by 76% year-on-year to 297 million pounds in 2020, the lowest on record in modern times, the cinema trade body said.

Cineworld, the world's second-largest cinema operator after AMC, said trading had topped its expectations, encouraging it to forecast a strong performance next week too, when Disney's "Cruella" and Paramount thriller "A Quiet Place 2" are set to be released.

Shares in Cineworld, the only UK-listed cinema chain, were up more than 3%.

London-based Odeon Cinemas, owned by AMC, said it had sold more than 300,000 tickets since the reopening last week, its busiest week in more than a year and more than double the attendance of any weekend between July and November last year. The UK relaxed coronavirus restrictions last summer, but had to reimpose them in the autumn.

Nearly two-thirds of the crowd came in to watch "Peter Rabbit 2," Odeon said.

PANDEMIC UNCERTAINTY

A successful vaccination drive has allowed the UK to ease restrictions over the past few months, with the next phase set for June.

"Cinema operators have been waiting for this moment for a long time, keeping their fingers crossed that consumers would feel confident enough to return to the big screen," analysts at broker AJ Bell said. "It looks like people have missed the experience and we've just had a bumper weekend for cinema visits."

But there are question marks over whether this weekend's box office takings are a sign of a long-term revival for cinema that has been among the worst hit within the entertainment industry.

The pandemic has also accelerated a shift to online streaming, with all but a handful of big-budget movies released on Netflix or other streaming platforms, showing how studios have mostly opted to stream films rather than hold off for a movie theatre debut at a later date.

WHAT HAPPENS WHEN THE SUN IS OUT?

There has also been speculation that the gap between when a movie is made available online after its release in theatres has been shortened by the health crisis.

Cineworld, for example, has a deal with Warner Bros to screen the studio's movies in its U.S. cinemas with 45 days exclusivity, beginning next year. That was half the traditional 90-day exclusivity window.

AJ Bell analysts said the bad weather in Britain at the weekend could have also played a role in getting people into cinemas. They said Britons might prefer to be outdoors when the sun is out.

The analysts also highlighted that there are not that many big films lined up for release until later in the summer.

"This suggests Cineworld will still have to keep its fingers crossed that the past weekend's trading boost wasn't a one-off."