Paradiso regained?

Almost a quarter of a century has passed since the first multi-screen cinema was opened in Poland and since this time it has become a permanent fixture of the entertainment on offer in cities. The sector grew rapidly together with large shopping centres. That is, until 2020 – when, with the outbreak of the pandemic, everything changed.

Stalls in malls

“The times when cinema chains were expanding across Poland are now over,” declares Krzysztof Wyrzykowski, a senior associate in the retail department at Colliers. Together with such economic issues as high inflation, rising labour costs and unstable building material prices, given the already high saturation of cinema networks across Poland there is little prospect of their further expansion. “The development of cinema chains in Poland followed that of the construction of multi-format shopping centres, which are no longer being built today. These days the retail market is only growing through the development of retail parks and other convenience centres. One example is the recent opening of the 53rd Helios cinema in Poland in the Galeria Dworcowa retail park in Łomża. But this kind of growth is only going be sporadic, because such retail formats do not fully fit the requirements of cinema operators,” admits Krzysztof Wyrzykowski. The chains themselves don’t seem to contradict that, but they also point to other reasons why cinema openings are now occurring relatively infrequently. “We’re currently in a slowdown when it comes to new cinema openings and our most important goal is to maintain the standards of the cinemas that are already operating. From the financial point of view, the most important thing is paying off the debts incurred during the pandemic, and so, as a result, organic growth is now on the backburner,” explains Tomasz Jagiełło, the CEO of the Helios cinema chain. Krzysztof Wyrzykowski does not believe that cinema chains are likely to grow, but neither does he think they will contract, as pessimists predicted during the lockdowns. “When you take into account the investment costs and the length of the returns on them, a reduction in the scale of the concept does not appear to be the ideal course for operators. The sector is going to have to find some other way to cope with the current situation,” he says and then goes on to suggest that cinemas could be converted into something else, as long as this was economically justified.

If you build it, they will still come

None of this means that the pandemic has drawn the curtain on the history of the Polish cinema sector and that further silver screen openings will fail to materialise. Cinema City, for example, has other plans. In November, it completed the construction of a new cinema in Elbląg in northern Poland to bring the number in its chain in the country up to 35. “This was a massive venture built from the ground up. The complex has six screens with seating for around 900 people and is fitted with the latest equipment. In October, we also opened a cinema in our flagship Imax format in Kraków in a new form with laser projectors,” reveals Oldřich Kubišta, the operations director of multiplex chain Cinema City Poland. The company is currently in the middle of another joint development with Cromwell, the owner of the Korona shopping centre in Wrocław, to modernise the mall’s multiplex, which is scheduled to reopen in 2023.

A little difficulty

It’s not only the lack of new shopping centres that has been holding back cinema chain development. Krzysztof Wyrzykowski of Colliers stresses how the outbreak of Covid-19 in 2020 turned our world upside down. “Our shopping habits changed as well as the way people consume entertainment. The hybrid work model became more common. The impact of the lockdowns, which cinemas had to contend with from the beginning of the pandemic, hit the sector extremely hard and even today it’s in a vulnerable state,” he admits, before adding: “You could simply say that cinema operators are still operating in a post-Covid crisis mode, both financially and organisationally. This can be seen in the numbers. In 2019 there were around 90 Hollywood film premieres; this year there were only 60, while next year around 70 are planned.” Moreover, cinema chains face strong competition from streaming services, which grew rapidly during the lockdowns. “It’s not about streaming customers not going to the cinema. It’s just the opposite: these are some of the most loyal viewers; but the battle between operators over subscriptions and their position on the market, which we have been following for quite some time, is taking customers away from cinemas and it’s hard for them to compete with what such platforms offer,” explains Krzysztof Wyrzykowski.

No Polish, please

According to Colliers, around 50–55 pct of cinema seats were filled in the third quarter of this year. “The operators themselves put the figure at around 70–75 pct. In their opinion, it’s Polish movies that are reducing these turnout figures,” says Krzysztof Wyrzykowski. The sector believes that its success, financial results and future depend on the films they have and the premieres that are supplied to them by distributors. “This year we’ve had titles that have attracted viewers in the same numbers as in the record year of 2019. These included the ‘Spiderman’, ‘Minions’ and ‘Top Gun’ sequels,” points out Oldřich Kubišta of Cinema City Poland. “What’s definitely changed is that Polish productions have clearly attracted lower turnouts than before the pandemic. Home-grown films are normally hits, but this year has been different. The question is why and we are still analysing that,” he adds. Helios’ CEO Tomasz Jagiełło also points out that from January to October this year, cinema attendance was 70 pct of that of 2019: “Of course, you have to bear in mind that at the beginning of the year cinemas were still subject to Covid restrictions, so you could only sell a limited number of tickets for each screening,” he says. The audience has, however, fully returned to the cinemas of his chain for the most awaited Hollywood releases, with audience numbers now back at the same level as 2017–2019. Interestingly, the situation seems no different for small studio cinemas. Maria Majchrzak, the project manager at Warsaw’s Kinoteka cinema, reveals that audience numbers are at 70–75 pct of pre-pandemic levels and on some days they are the same.

Making it an occasion

To draw in both older and younger cinemagoers, cinemas have been introducing new attractions and organising events. “Our main customers are people that watch our films, but we now also specialise in unique viewer offerings,” explains Tomasz Jagiełło of Helios. “Over the last few years we’ve seen the highest ever turnout for our Night Film Marathons for Halloween. In 2022, we also had record numbers of football fans in to watch matches on the big screen. Familiar and traditional events, such as Kino Kobiet, still remain popular, while new ones, such as Helios Anime, are also gaining fans. School groups also come to our screenings,” he adds. It’s also worth pointing out that Helios was the first cinema to screen films in Ukrainian and is still the leader in this regard. According to Tomasz Jagiełło, Helios is the only chain that has regular customers who have fled to Poland from the war. However, the director of Cinema City emphasises that his chain’s success is based on the quality of its screenings. “Imax, 4DX and ScreenX screenings create quite an impression for a movie. As well as this we organise special events, such as our Ladies Nights, with pre-premiere screenings, Imax Days and screenings of concerts, which recently included BTS and Coldplay,” reveals Oldřich Kubišta. Kinoteka is also increasing its events operations. “We put on various festivals, film and music events, screenings with special guests, conferences and even night screenings. This multi-directional approach ensures that we are continuously working and that our cinema is always bustling with life,” argues Maria Majchrzak. Krzysztof Wyrzykowski of Colliers, however, claims that attendees of all these special events only account for 10 pct of those who go to the cinema and that this is not going to change at any time soon. “The most important thing is to entice cinemagoers to come to all the big movie premieres,” he insists.

Inflated expectations

Cinema operators are also under pressure due to the current high inflation levels and the tricky issue of how not to frighten away customers by increasing ticket prices. “The small price rises that we have been unable to avoid are not so big when compared to other goods on the market,” says Oldřich Kubišta. Cinemagoers for whom price is an important criterion are encouraged to go in the middle of the week, when tickets cost less, discounts are available for families as well as unlimited entrance to the cinema for film buffs for a single fee. Discounts are also being offered by chains when tickets are purchased well in advance or via their mobile apps.