Cineworld shares plunge 56% as they confirm temporary closure

Following on from our breaking news story yesterday, Cineworld has this morning confirmed temporary closure of all UK and US screens. The proposed ‘temporary’ closure will come into effect from Thursday, with little consultation with staff; many of whom found out via the press yesterday. The announcement quickly led to the groups share price falling by 56%, only further damaging the business. Meanwhile, staff have been left angry, upset, and in limbo, as the companies decision came out of the blue.

Cineworld was quick to blame the big studios for its decision, however, its problems may run far deeper than the postponement of No Time to Die. The chain’s decision highlighting a much bigger issue facing our multiplex giants; the inability to accept a diversity of films. For years multiplex chains have survived on Hollywood movies, prioritising big-budget films over everything else. A trait only confirmed when we picked a smaller Cineworld venue at random at looked at their programme. The line up of movies scheduled from Thursday 8th October did not even include the outstanding Saint Maud. Instead, Tenant continued to play in three screens, with no smaller independent films scheduled.

This reliance on Hollywood blockbusters not only denies audiences a wealth of entertainment, but leads cinemas into a cul-de-sac of programming. And let’s be honest cinema chains have been more than aware that Bond could and would likely move again. Therefore, placing the blame on one picture seems slightly ludicrous. Of course, that does not mean studios do not shoulder some of the guilt, as they continue to sit on significant prized assets. But, in the meantime, smaller distribution companies and studios have continued to release a wealth of content. The difference is, many big cinema chains have chosen not to show them, waiting with their fingers crossed to be fed by the big beasts of Hollywood.

As discussed in our recent article on cinema post the pandemic, the conveyor belt of the multiplex era is all but dead. And unless cinemas embrace a new model that brings a wealth of content to audiences, they will also die. Therefore the business model must now adapt and change. With studios and cinema chains working in unison to make this happen. However, one can’t help but feel that for Cineworld, the problems already run much deeper than programming. The chain has expanded too far, too fast, the result a company that may ultimately face the same final curtain as its predecessors; UGC, Virgin Cinemas, MGM and Cannon. With its estate eventually broken up into a more manageable offer. Whatever happens from here, we hope that Cineworld will place its staff at the heart of decisions, all of whom deserve a voice in the decisions made.