The Romanian cinematographic market has started the recovery from the declines faced during the pandemic but is still far from the figures recorded between 2016 and 2019. The high demand for movies after a long period of restrictions is likely to propel the cinema sector to pre-pandemic levels in terms of viewers. However, there are still some challenges cinema operators must face, such as rising costs or the strong development of streaming services.
In total, in 2021 and 2021, the cinemas had 7.9 million spectators, representing 60% of the annual average recorded in the period 2016-2019 of about 13 million spectators, according to the data offered by the Romanian National Film Centre, and analyzed by the real estate consultancy company Cushman & Wakefield Echinox.
From 2016 to 2019, an average of around 13 million visits were made annually by Romanians heading to the cinema, equating to approximately one million visits nationally each month. In 2020, the first year of the pandemic, that figure fell to 3.3 million visitors, followed in 2021 an increase to almost 4,7 million visits, representing a monthly average of 391,000 viewers, after COVID-19 restrictions removal partially.
In 2020, the frequency of visits per capita decreased from 0.68 to 0.17, followed by an increase in 2021 to the level of 0.24.
At the end of 2021, 90 cinemas were opened in Romania, down from 98 in 2019. Actually, in 2019 Romania registered the largest number of multiplex cinemas operational in the history of modern local retail.
Although it may seem far too obvious to state that the Covid-19 pandemic dealt a damaging blow to the sector, it is important to note many of these challenges were already in play prior to the pandemic, with the performance indicators under pressure for a number of years.
Thus, after a continuously increasing register between 2013 and 2017, the average admission per capita decreased in 2018. Also, the gross box-office of cinema operators followed the same trajectory, recording a maximum level in 2017 (266.5 million lei, respectively 58.3 million euros), followed by a decrease in 2018 (262, 9 million lei, 56.5 million euros). In 2019, the gross box-office increased compared to 2018 but remained below the 2017 level.
Evolution of the main indicators of the cinema industry (2013-2021)
Dana Radoveneanu, Retail Agency Cushman & Wakefield Echinox: ”From a real estate perspective, the cinema operators remain a key shopping centers’ occupier, supported by robust fundamentals, and healthy competition. Over 90% of the cinema screens in Romania are still found in shopping centers, attracting more than 90% of the total attendance. Moreover, considering that retailers are focused on offering shopping experiences which can help them differentiate themselves, cinema operators also need to reposition and bring new, innovative concepts to the market.”
Even with the removal of the remaining COVID-19 restrictions, the cinema sector must face many challenges in the coming period.
The sector is unique when compared to many other consumer sectors, as operators have almost zero control over the product it sells and exhibits. Supply of new films has also remained low since production was halted at the height of the pandemic. Considerable supply bottlenecks, postponement, and delays remain a key issue. Furthermore, the proliferation of subscription streaming services such as Netflix, and the rapidly growing Disney+, has also intensified competition for exclusive broadcasting rights resulting in increases in film rental tariffs.
Increasing costs is another challenge for the cinema industry due to the decrease in the power purchase on the one hand and the significant uplifts in the energy cost on the other hand.
Although the cinema industry has a strong value proposition within the wider spectrum for leisure activities.
In the same time, the industry is supported by a massive demand for film, and the experience of watching films from the auditorium remains largely unattainable at home even for those that have spent thousands on trying to replicate it during the pandemic.
The outlook for 2022 remains positive with high value productions such as Avatar, Black Panther and Don’t worry Darling amongst many others set to attract large viewership.
This builds on the success of Top Gun: Maverick which, to date, has grossed over $1 billion globally (Box Office Mojo, August 2022), making it one of the most successful releases in modern cinema.