For much of the last five years, cinemas have had to contend with the aftershock of the Covid-19 pandemic and the rise of streaming services. But, as Rich Robinson, Head of Hospitality & Leisure at Barclays outlines, the industry has rebounded and is thriving once again…
The cinema industry has faced a number of challenges since the pandemic. It was forced to adapt to the changes brought about by the advent and explosive growth of streaming. Suddenly, older audiences who might never have become active users of these services had ample time to learn and explore the platforms.
With leisure facilities shut and socialising a non-option, viewers felt trapped at home. Suddenly consumers had a lot of spare time and more disposable income than they had envisaged.
It’s a trend that has continued. At the end of Q4 in 2019, Netflix had 167 million subscribers, and, by the start of 2022, it had 222 million. Disney had recruited 26.6 million subscribers in its first quarter at the end of 2019, and, by the time restrictions were lifted in January 2022, it boasted 129.8 million. In the UK, spending on Digital Content & Subscriptions was up 7.3 per cent last year, which followed growth of 13.2 per cent in 2023.
The embrace of streaming services has also changed audience expectations. Blockbuster movies with budgets in the hundreds of millions are now routinely released on streaming services first and prestige television now attracts the finest actors, directors, and writers, with budgets and marketing campaigns to match. Long-established release windows were already starting to be disregarded, but the pandemic, and the forced closure of cinemas, put that process into warp speed.
Feeling the squeeze
It’s undeniable that the game has changed for cinemas. In 2024, UK box office revenue totalled £979m, which is 22 per cent below 2019’s pre-COVID figure of £1.35 billion. Despite 48 per cent of consumers trying to cut their discretionary spending, people are prioritising spending on experiences. More often than not, there are trade-offs involved.
Unmissable events like Taylor Swift’s Eras tour and the Oasis reunion tour can cost fans hundreds of pounds each, and spending on Live Shows & Concerts increased 6.7 per cent in 2024. It’s clear people also want to travel, up 6.9 per cent last year. Beyond streaming, the film industry is competing with multiple forms of entertainment and leisure in a bid for consumers’ attention.
However, things are looking brighter and cinemas are enjoying a renaissance.
2024 ended strongly, and 2025 has continued that form
2024 got off to a quiet start. Release schedules were impacted by the gap in production following 2023’s Hollywood labour disputes. November marked a turning point for the cinema industry, when spending increased 22.8 per cent, helping by bookings for blockbuster hits such as Wicked, Gladiator II, and Paddington in Peru.
A bumper December followed, when the sector enjoyed a huge 52.1 per cent boost. Overall, 2024 admissions reached 126.5 million, up 2 per cent year-on-year, largely driven by the year’s final quarter.
Continuing its strong run and starting 2025 on a high, cinema spending was up 15.1 per cent in January, and 9.0 in February, outpacing Digital Content & Subscriptions. Overall, over the past four months (November 2024-February 2025) cinema spending has jumped 25.9 per cent year-on-year.
The box office returns have been strong too. In the four-week period from February 7 to March 6, 2025, UK cinemas brought in £100.7m, which is 20 per cent up on the £83.8m recorded in the equivalent period in February 2024. Much of that success has been driven by the huge success of Bridget Jones: Mad About The Boy, as well as Marvel adventure, Captain America: Brave New World, and it’s fantastic to see cinemas start the year off with two big tentpoles.
There's a great year of blockbusters to come
The release calendar for 2025 is very strong. There’s a new instalment of Jurassic World, four new releases from Marvel Studios, a new take on Superman, and the hugely anticipated sequels to both Wicked and Avatar arriving at the end of the year. As well as that, there’s the much-anticipated big screen debut of megagame Minecraft.
A strong release schedule is one way to get consumers through the doors, but the extras offer cinemas another opportunity.
Making the big things bigger
People report visiting the cinema less. According to Barclays research, 55 per cent say they are taking fewer trips than they did 10 years ago. This reaches 69 per cent for the over over-55s. London, however, is an outlier. Those living in the capital say they are making just as many trips as they did 10 years, while every other part of the country is in decline .
How can cinemas counter this? In the same way the live music industry has; by making the biggest events feel bigger. It was fantastic to see the effort cinemas went to when Wicked was released, encouraging longtime fans of the musical to dress up, and making sure the occasion was marked with an array of merchandise.
The standard of seating has also hugely improved, and the options for food and drink have come on leaps and bounds in recent years. In many of the newer openings, they offer in-seat service, and there are bars and restaurants, meaning consumers can make an occasion of the outing.
Cinemas must make the trips consumers do make that much more lucrative, and they are doing a sterling job thus far.
Looking to the future
Competition for consumer leisure time has never been fiercer. Cinemas are adapting by making the experience of going to see a film more enjoyable, such as by installing sofas and reclining seats, and improving food and drinks menus.
With new and enhanced locations, an exciting 2025 release schedule, and a revived public appetite, I’m hopeful that cinema takings will exceed last year’s total, and that we will see the return of the billion-pound UK box office.
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