There were hints that the end of cinemas was near due to the arrival of on-demand entertainment. However, that doesn’t seem to be the case in regional areas in Australia.
Cinemas in regional towns are adding more screens to the roster amidst on-demand entertainment companies that are also adding shows to their list. The increase of screens has paved the way to two outcomes — increase in box office profits and continuous patronage and demand for these cinemas.
Recently, Louisa Blennerhassett, an agent from Ray White Commercial Noosa and Sunshine Coast North, sold a cinema worth $900,000. Located in Gympie, north of Brisbane, it was bought by a private-investor family. The cinema was sold after receiving strong interest from buyers in the south-east Queensland region and even other parts of the country.
“Realistically, we’ve been saying that TV was going to kill the cinema for years, and it didn’t happen,” Ms Blennerhassett told Commercial Real Estate.
Families in regional areas say otherwise. Families who have little or nothing else to do on a weekend are still choosing the big screen for entertainment.
“People always want an excuse to get out of the home, particularly in regional areas,” Ms Blennerhassett told Commercial Real Estate.
Ms Blennerhassett explained that this “excuse” has transformed regional cinemas into a popular business to invest in. However, local cinemas are not easy to buy as it’s usually part of a shopping area.
According to Screen Australia, there were 921 cinema screens located in country areas last year. Comparing this to previous data, it’s an 805-increase compared to 2018’s, and 600 compared to 1998’s.
Meanwhile, the cinema box office in the country was able to bring in $1.245 billion last year. Motion Picture Distributors Association of Australia said this is the second highest annual profit ever.
Paul Besenko, Wallis Cinema Group marketing manager, said the demand for watching movies on the big screen remains strong as the Adelaide-based group is receiving “strong support” from the Mildura community and “improved box office takings” since purchasing a cinema complex in the regional Victorian town of Mildura in 2017.
“Regional cinemas are doing very well. Metro cinemas aren’t doing as well, but that’s only because of cannibalisation – the big players coming in and taking over,” he told Commercial Real Estate.
Mr Besenko said the returns still depended on the patronage of cinema-goers to different movie releases, with the trend is still pointing towards increased patronage and revenue.
“It’s an activity that appeals to all age groups,” he said.
Cinemas in the regional areas are going strong as movie-goers in the area choose the big screens to watch a movie on a weekend instead of using on-demand entertainment platforms. The continuous demand for cinemas is increasing the box office profit, and even the price of cinemas when sold off through auctions or listings.
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