Cinema City looks for growth

Multiplex cinema operator Cinema City is featured in the FT, though there doesn’t seem to be any particular news reason for it. Still an interesting read, basically suggesting that increasing the popularity of cinema going is the best bet for growth in the industry (rather than building new theaters).

The company has 40% market share in Poland and made €234.5m in revenues in 2010. The company’s CEO Moshe Greidinger says Warsaw has 9 multiplexes and that people there go to the theater on average 3.4 times per year. That falls to just once, nationwide, a number that’s in line with the rest of CEE (except for Romania, where there are just 0.3 visits per year). The average in Western Europe is more like 3. The company will be difficult to dislodge from its position, claims the CEO.

“Now, it will be difficult to enter these markets. We are here and we are very alert,” says Mr Greidinger.

From speaking with various developers, we’d suggest it will be difficult for any cinema operator to expand in a big way. The multiplexes were popular back in the day, but more because of herd mentality (everyone’s doing it) then for solid economic reasons (wonder if valuers were saying that from day one…). These days, everyone’s counting every euro, and hazy notions of synergy don’t cut it.

As one regional retail developer told us recently “If you put a cinema in, it kills the project. You need to invest millions on fitouts but you never get it back from the rent. They expect it almost for free. They just want to put the chairs and the machines.”

Ouch.

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