How The Big Picture (TBP) Can Help You Understand Your Cinema Investment

We provide cinema consultancy services to those who want to invest in new or existing cinema sites around the world. Operating globally, our team of consultants have a great deal of pooled knowledge and experience from long-standing careers in the cinema and leisure industries.

We have the expertise to advise and guide you on what’s right for you as an investor before you outlay significant amounts of capital.

Why Invest in Cinema?

family-cinema

Leisure remains one of the overall strongest performing consumer areas in the world. Even in times of recession, leisure - and more specifically cinema - has been proven to be counter-cyclical to economic downturn in other sectors. When families and individuals are looking for more affordable entertainment and escapism, cinema definitely fills that need.

Consumers see watching films at the cinema as an affordable luxury provided by some of the most recognisable and trusted brands on the planet – Disney, Paramount, Sony, Universal and WarnerBros.

If a cinema investment fails it is more often because of a lack of planning, necessary assessment and general due diligence. And that’s where we come in.

Investing in cinema contributes to a larger investment profile and can strengthen and diversify a portfolio. What's been shown repeatedly in our case studies is that a cinema is a key ingredient to repurposing a struggling town centre or shopping centre. However, it's only part of the solution and needs to be assessed in the context of the overall strategy.

Shopping malls and town centres have both made bigger statements as strong businesses by investing in cinemas. Outside of typical shopping hours, town centres in particular can often be left empty and unsafe but a cinema is particularly powerful at creating footfall especially in off-peak and evening times.

This leads to an increase in dwell time in the shopping or town centre, with visitors now seeing the centre as both a convenience and a leisure destination. What’s more is that the adjacent sites surrounding the cinema - particularly food and beverage (F&B) venues - thrive because of this proximity and the traffic it brings with it.

The historically-solid performance of cinema as a business means that investors are likely to see a reliable return on investment (ROI). Investment of any kind comes with risk, but we have the know-how to guide you through the underlying business of cinema, steering you around the risks this sector can pose.

global box office

Different Investors with Different Needs

There are different types of investors that approach us and engage our services at The Big Picture. You might be an investor that focuses specifically on investing in cinema real estate or property or you might be an investor wanting to invest in cinema operations companies.

Whichever type of investor you are, your situation and resulting queries will be specific to you, and different to any other case. But it’s exactly the variety and volume of past clients and cases that we’ve successfully consulted on that puts us in the perfect position to help you.

Property Investors

Some examples of the companies we've worked with in this area include shopping centre owners, private equity firms, property investment companies, local authorities, government agencies, agents, architects and town planners.

For a property or real estate investor, a cinema can make a complementary addition to a portfolio mix. Most cinema tenancies can last 25 years or more which can provide a steady income stream. If the lease is considerably shorter, at around only seven or eight years, it’s vital you explore the underlying business to fully comprehend if you’re investing in a solid future. If you’re a local authority, investing in cinema assets can create a stream of revenue that can then be used to invest back into other services.

If your interests are in long term property investments, be assured there have been few failures when compared to investments in other sectors. If you’re a property company coming to us for advice on purchasing real estate in international territories, you’ll want to know about the strength of the actual functioning business that will provide you with your future tenant. It’s vital that you know who your ideal tenant should be - and perhaps, more importantly, who the wrong tenant would be. Contact us to discuss your property investment.

Avoiding Problems With Cinema Investment

One significant problem with cinema investment is a question of how secure the investment itself is, a lot of which comes down to the quality of the tenant. To that end, certain questions arise, such as - how long will the tenant be in the property for? How reliable are they? What are their future plans? Who might likely future competitors be?

Our understanding of the underlying business itself is what’s important here - so the tenant may well be risky but we’re here to explain in detail how cinema itself is a solid investment. Through the due diligence measures we carry out, The Big Picture’s expertise significantly minimises many potential risks faced.

We'll discuss any potential threats to your investment with you. Some to consider include cinema piracy, online streaming and home entertainment services. But it's important to remember that certain threats can also be embraced as opportunities.

film streaming services uk

Investing in Cinema Operating Companies

You might have an existing cinema estate and want to invest in increasing your cinema portfolio, or you might be a start-up wishing to create your debut one or two screen cinema. Or it might be that you're an investor looking at a merger or acquisition between cinema companies. Whatever your investment situation, we will investigate the strength of the business you’re looking to set up or acquire.

In order to give you a full analysis of the extent of the business as an operating entity, we’ll assess certain questions on your behalf, such as: how strong is the cinema industry? And its future? What are the threats to and within the industry?

If you're a private equity firm wanting to invest in a cinema operating company then we perform all necessary due diligence for you to know how to invest wisely.

TBP can also reposition a specific cinema in a certain location, if that cinema has been presented with a nearby competitor. This is a good example of when a neighbouring threat can be transformed into an exciting opportunity and we'll look at how the current cinema can be represented successfully and suitably.

cinemas for sale

Asking and Answering the Right Questions

There are lots of considerations to be aware of in order to ensure your investment is as sound as possible from the beginning, whichever type of investor you are. And it’s vital that these considerations are discussed early on at the start of the process.

We compile and address all the necessary questions that need to be asked on your behalf. These questions are often the same, whether from an operational or investment perspective. Through our analyses and investigation, we then communicate our findings to you, pre-empting any problems that may arise and preparing you before making your investment decision.

  • Is the site suitable for a cinema?
  • Is the market suitable for a cinema?
  • Is the business case viable?
  • Is the cinema design appropriate?
  • Is the operator appropriate to the market that we want to address/observe?
  • Have we fully quantified the costs?
  • Is there nearby and plentiful car parking?
  • How long is the journey to screen?
  • What are the surrounding adjacencies / F&B / retail offers?
  • How does the planned cinema integrate with adjacencies?
  • Does the planned cinema achieve what we want it to achieve?
  • What are the strengths of the tenant - (propcos)?
  • What are the strengths of the business - (opcos)?
  • What are the other opportunities if we’re going to buy the property?
  • How do I use the destination to create synergistic events, such as Market Fairs, Festivals etc?

Why Work with The Big Picture

TBP are the only company to offer you a comprehensive service of detailed due diligence combined with global best practice in our industry. Our hands-on operating experience with the world's biggest cinema companies means we can give you highly knowledgable and reliable advice, as well as prepare you for the risks and rewards that you’ll face. We usually perform a full SWOT analysis in any situation, whether for property investments or operations, to give you a full picture of the Strengths, Weaknesses, Opportunities and Threats.

We achieve our conclusions by gleaning intelligence through market research, our specific methodology and our industry experience. Identifying any and all risks at an early stage is crucial to determining the future success of the business and avoid later pitfalls. It goes without saying that we continually look at the strengths and the future direction of the industry.

One USP we’re particularly proud of is our knowledge of, and expertise in, current cinema operators. We focus specifically on this key detail because of how important it is to any project and we have the right connections to hone in on who would be ideal for a particular site.

To find the right operational management for your property or business, one size most certainly does not fit all and so it’s vital to the success of the project that the appropriate operator is identified and brought on board.

Here’s an example

If a favourable location has a run-down multiplex, and there’s a potentially desirable site for a new cinema nearby, we would identify - as part of our SWOT analysis - the perfect operator for the new site. A particular brand of arthouse cinema would offer a chance to tap into a new market than the multiplex previously did, thereby creating a new opportunity. Conversely, the threat in this instance would be if the multiplex then decided to turn their run-down site into a luxury or more upmarket, refurbished site.

Mike Thomson

Mike Thomson, Partner at The Big Picture, says,

“We’re the only company to provide the range of services that we do on an international level. Our depth of analysis and the extent of our experience is unrivalled and our USP at The Big Picture is our global knowledge of constantly-shifting markets, which means we can meet ever-changing demands.”

John Sullivan, Executive Director of The Big Picture, adds,

“We provide a head to tail service in order to make a success of your investment. My main interests lie within getting a project started, and analysing where to strategically place the business.”

"We’ve worked with numerous local authorities, and many major UK-based property firms to advise on cinema investments, as well as being experienced in working with private equity firms. Our methodology begins with our ‘gut feeling’ based on our intuition and we work to a specific, detailed criteria."

John Sullivan

Get in touch to see how we can help with your cinema project

Need expert advice?Please get in touch:+44 (0) 7708 499 129 | kath.knight@the-bigpicture.com