An Open Letter To The Competition Commission: Don’t You Mess With My Cinemas!

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Cineworld Birmingham

Got a nice little pop-up when I signed into my blog this morning, saying “Happy Anniversary!” While I thought it nice, if a little creepy and stalkerish, that WordPress knew it was my wedding anniversary yesterday, I then also remembered that last Saturday was the third anniversary of The Movie Evangelist. Seems hard to think that, at the time of my wedding in 2005, the cinema in the picture (Cineworld Birmingham) was one of my two regular haunts, and only even became a Cineworld that year after the merger between the Cineworld and UGC chains. Now I frequent mostly the local cinemas of Cambridge and Bury St. Edmunds, living as I do somewhere in between the two, and a blog that wasn’t even a glint in the milkman’s video shop owner’s eye at the time has now been running for three years, churned out over four hundred posts and been to numerous film festivals and has seen me get on local radio and host Q & A sessions.

The intent to start a blog came nearly three years after I moved to Cambridgeshire with Mrs Evangelist, but despite the wealth of cinemas in both Leicester – where I lived for seven years – and Birmingham, where I spent another three, there was something almost serendipitous about my increased love of cinema and desire to blog about it and the fact I was living where I was. Cambridge and Bury St. Edmunds are both lucky enough to have both a Cineworld and a Picturehouse cinema, and I’m certain this blog wouldn’t have had the depth and breadth it has if that hadn’t been the case. I hope that the Competition Commission isn’t about to put a giant spanner in the works of the Movie Evangelist, because of something that happened a few months back.

There was a certain amount of fear and trepidation when it was announced in December last year that Cineworld had acquired the Picturehouse chain of twenty-one cinemas for a sum of £47.3m. So far, any concerns about what the merger might mean have been unfounded, as it’s been absolutely business as usual for both chains since that date, but now another threat looms. Yesterday, the Office Of Fair Trading referred the purchase to the Competition Commission on the basis that five areas, including Cambridge and Bury, will see a reduction in competition based on the purchase.

There’s actually a total of five areas listed in the news story, so let’s consider the competition for a moment.

Aberdeen: four cinemas, of which two are Cineworld and one is a Picturehouse, the other being owned by Vue, serving a population of 212,000 people.

Brighton: this south coast resort has two Picturehouses, a Cineworld and an Odeon, all serving 155,000 people.

Bury St. Edmunds: an eight screen Cineworld and a two screen Picturehouse only in this smallish market town of 35,000 people.

Cambridge: the university city has a Cineworld, a Picturehouse and a Vue serving around 124,000 inhabitants.

Southampton: there’s an IMAX-ed up Odeon, a Picturehouse and a Cineworld in Southampton and a Vue five miles up the road in Eastleigh, all of which are easily accessible to the 304,000 residents of the Southampton urban area.

So of the five, only one – and by far the smallest of the five – doesn’t have another cinema chain in the immediate vicinity, so in four areas, competition will remain.

But what does it matter if there are two or three cinemas under the same ownership in each area? The argument made as part of the referral is that the Picturehouse chain, while generally offering a diverse range of art house and independent cinema, makes a decent slice of its cash by showing the bigger films that would be on in both cinemas. Consequently, having two cinemas with the same owners could see a rise in prices.

If that were to be the case it would have to see a radical rethink in terms of the pricing policy of one or the other chains. I would make a case that Cineworld and Picturehouse are the two best cinema chains in the UK, because they offer something that the other large chains (Vue, Odeon, Empire, Showcase) don’t: membership rates. Picturehouse members get three free films a year, and no booking fees and discounts on all other tickets, and Cineworld are the all-you-can-eat-buffets of cinema, offering as much as you can watch before your eyeballs dry out for just £16 a month. (Rest assured, I know from personal experience that you can see a LOT of movies before that happens.) It’s also the case at most of the Picturehouses I’ve been to that the big films they’re showing are also filling screens at other cinemas, such as Skyfall and Les Misérables, so it’s a case of supply and demand more than restriction of competition.

But it’s not just about the initial membership rates. Cineworld also reward me for being a long term member with their Unlimited Premium scheme, and I now get 25% off all food and drink as well as no 3D uplift charge. Picturehouse also have a proper bar at every screen, so I can take my decent coffee or my pint in with me or enjoy it, or excellent food, in the bar, all with a member’s discount. There is no doubt in my mind – and I can say this as someone who also makes regular trips to a variety of other cinemas, including Vue, Odeon, Empire, Showcase and Curzon, as well as a few independents – that the Cineworld and Picturehouse chains reward their core audience and are the best at value for money. Picturehouse goes a step further and offers the best cinema experience you’ll get, at affordable prices. If it ain’t broke, OFT, then it don’t need fixing.

I don’t want to lose either of these chains from either of my local cities, not least because it happened once before. The Cineworld chain were forced to sell off seven cinemas from the UGC chain when they merged, including the Cineworld Great Park in Birmingham, my local at the time. It’s now an Empire, and while it’s not a bad cinema experience, you do get charged per visit, which for someone like me starts to ramp up the cost significantly. It’s this that I fear the most from yesterday’s announcement, as it’s the only practical way to attempt to restrict the possibility of competition. While there might be a risk of prices increasing – and losing customer loyalty in the process – under the current set-up, there’s an absolute guarantee that selling any of the cinemas off in the affected cities would guarantee an immediate and significant price rise for anyone seeing more than two films a month, as consumers become forced to pay the higher prices of the other chains.

So please, Competition Commission, allow Cineworld and Picturehouse to carry on operating as they are. Look at restrictions in areas where they’ve yet to expand, rather than restricting their current practice, which has two business models that complement each other and drive costs down for the consumer, as opposed to the other chains who are actually the ones more interested in profit than the consumer experience.

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