Executive Summary

With estimated box office revenues of £776m in 1996, both cinemas and theatres represent two of UK's most popular cultural and leisure pursuits. The past decade has seen a revival in cinema going in the UK, with admissions more than doubled to 123 million in 1996. Multiplex development continued over the past year, with all the leading cinema operators stepping up their expansion programmes. In 1996, multiplexes accounted for 40% of UK screens and over 50% of customer visits.

The UK cinema is dominated by five major chains (Virgin, Odeon, ABC, UCI, and Warner Bros), which account for around a third of all sites and nearly 60% of all screens. Over the past year, the market has become increasingly crowded, with the entry of many new players, for example Hoyts and Ster-Kinekor. This has inevitably resulted in a fierce battle for new sites.

There are two principle types of theatres in UK: the commercial West End theatre; and the grant-aided or subsidised theatre. Compared with the cinema, the theatre industry is extremely fragmented, comprising a wide diversity of companies, ranging from the major commercial theatre companies and the national companies, to the small provincial theatres and touring groups. The leading commercial theatre companies are Apollo Theatre Group, The Really Useful Group, Mayfair Theatres and Delfont Cameron Mackintosh Theatres.

Generally, the UK theatre industry is seriously underfunded due to cutbacks in government grant aid over many years. Despite new funding from The National Lottery, there is a crisis in the subsidised sector, with many theatres experiencing financial difficulties. For example, three of the four national `flagship' companies --the Royal Shakespeare Company (RSC), the Royal Opera House (ROH) and the English National Opera (ENO) -- are in debt, while some of London's established fringe theatres -- The King's Head and The Gate -- are also facing closures.

Future prospects look extremely promising and positive for cinemas than theatres. Key Note forecast total box office revenue for cinemas will grow on average by 11% per year from £490m in 1997 to reach £700m in 2001. Theatres will increase from £331m to £400m over the same period. The main growth will come from the London theatres.

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