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edition 6 (231)
June 2018
Retail & leisure

Golden prospects for the silver screen

TSG

Golden prospects  for the silver screen
The cinema market in smaller towns in Poland is dominated by Helios

POLAND 2017 was a record year for the cinema sector in Poland. According to the ‘Analysis of the Polish Cinema Market’ report by Cushman & Wakefield, cinema attendance set an all-time high of 56.6 mln admissions to see both big Hollywood productions and Polish films, which have seen a notable rise in popularity. Today, there are more than 1,300 screens in nearly 500 cinemas across the country. Multiplexes with two or more screens make up only app. 25 pct of all cinemas in Poland, but account for 75 pct of all screens. Most of them (80 pct) are located in shopping centres.

Hand in hand with shopping centres

The Polish market’s growth potential is best illustrated by the number of screens per 1 mln inhabitants. According to 2017 data of the International Union of Cinemas, Poland, with just under 40 screens per 1 mln people, was ahead of only eight countries (Latvia, Turkey, Russia, Bulgaria, Lithuania, Hungary, Romania and Bosnia-Herzegovina) of the 30 European markets tracked. By contrast, Ireland, France, the Czech Republic, Norway and Sweden came top of the league table with more than double this ratio. In Poland, however, the expansion of the modern cinema market has been going hand in hand with the growth of large-scale shopping centres with leisure and F&B operators now accounting for up to 20 pct of space in prime retail schemes.

Four big market players

The Polish market of mini- and multiplexes is dominated by four leading cinema operators with a market share of over 90 pct between them. The multiplex market is expanding together with the growth of modern retail formats. In the four years after 1998, this expansion was limited to Poland’s largest cities and it was not until 2002 that new multiplexes began to be developed in cities with populations of less than 400,000. In 2011, cinema operators shifted their focus to towns with populations below 100,000. Such smaller markets are dominated by appropriately-sized two- or four-screen cinemas operated either by Helios (a 35 pct market share by the number of cinemas and a 25 pct market share of the number of screens) and Cinema 3D (9 pct and 5 pct, respectively). Cinema City (27 pct and 39 pct) and Multikino (25 pct and 27 pct) focus on larger cities where they tend to operate between eight- and twelve-screen cinemas.

Risks and challenges

A survey of a representative sample of 2,048 Polish cinemagoers conducted by the University of Economics in Katowice shows that more than half of the respondents go to the cinema once a month or more often. The highest frequency is recorded among young people. The average number of annual cinema visits per inhabitant stands at a stable 1.9 in Western Europe and at 1.5 in Poland, but the figure in Poland is rising fast. Ticket sales rose by an average of 2 pct y-o-y across Europe in 2017 compared to a staggering 8.7 pct in Poland. And most importantly, the Sunday shopping restrictions are not expected to slow down the market’s growth as cinemas will remain open, even in shopping centres closed for trading on Sundays. In addition, Fridays and Saturdays are preferred over Sundays for going to the cinema. . Despite its rapid expansion, this market still has a lot of potential growth considering the difference in saturation between Poland and Western Europe. The rapid expansion of cinemas across Poland in recent years, particularly in smaller towns and cities, has been fuelled by a growing number of new retail schemes adding non-retail tenants to their mix. Shopping centres are increasingly being designed with a substantial part of their space allocated to leisure and food and beverage operators. The cinema sector’s growth is further being driven by a robust increase in consumer spending, rising salaries and Poland’s overall strong growing economy. The Sunday shopping restrictions that came into force in March 2018 constitute a major challenge for both the retail sector and the cinema segment Another challenge is the rise in popularity of streaming services offering easy online access to new films and series. There are already a few streaming media and video on demand service providers in Poland, including Showmax, HBO GO and Netflix. However, despite the continued growth of such services, cinema will always be one of people’s favourite pastimes.

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