Cinemas make profit from more than just movies

Most movie theaters that can be rented fall under the authority of the autonomous self-financed entity RADEF RomaniaFilm, which in turn comes under the authority of the Ministry of Culture. Half of the total profit of this entity comes from renting the halls for events other than movie projections. Last year, RADEF posted revenues in excess of RON 11 million. “The sums which are raised are used for current expenses such as salaries, utilities and maintenance, says Elena Incrosnatu, manager of the entity. Currently, RADEF is in the process of applying new legislation which stipulates that it should transfer movie theaters under its administration to the administration of the local councils. At the moment when these stipulations appeared, RADEF RomaniaFilm was in charge of 279 rooms and open – air cinemas , of which 48 were turned over to the local authorities. Therefore, in the administration of RADEF Romaniafilm there are 231 halls and cinema gardens. The entity started renting the cinema halls in 1992 when cinema going was in decline and it had to support itself financially. Therefore, some of the movie theaters were rented to host other activities such as discos, gaming rooms and other commercial activities. Up to now, 96 of these movie theaters were rented for other purposes.In Bucharest, the cinemas that are rented are Patria, Scala, Corso, Europa and Gloria. The renting proposals that RADEF RomaniaFilm has received up to the moment concern events, concerts, generally activities that do not interfere with movie projections. Prices are established depending on several criteria such as the type of event, duration, and the hours at which it is programmed to take place.
So far, RADEF RomaniaFilm cinemas have hosted high school and faculty graduation events, theater plays, concerts, religious and
electoral meetings. Peak times
of demand are electoral campaigns and when the school semester
ends.
However, given the fact that it is subject to surrendering cinema theaters to local authorities, the direction is not making any investments in restoration or modernization, which may cause clients to opt for the services of private chains which run multiplex cinemas.
The British company The Light, which has seven screens at Liberty Center in Bucharest and will open eight screens in Tiago Malls in Oradea in October this year, is another competitor on this market. The price of renting its theaters depends on the event and time of day but starts from EUR 200. “We have hosted several launch presentations, premieres, private screenings, live opera from New York and live sports,” says Keith Pullinger, owner of the cinema. The revenues from these activities represent 5 percent of total revenues of the company, with three-four events hosted per month. Pullinger says the company will post a turnover in excess of EUR 1 million this year on the local market.
“Our all digital facilities allow us to show anything on screen (DVDs, Powerpoint presentations etc) and our luxury bar is very popular for hosting pre and post catering activity,” says the owner.
“This kind of activity takes place only where it does not interfere with the smooth running of the cinema, namely movie watching, and has as its main purpose a significant growth in the public's interest in cinema going,” says Raluca Moroianu, marketing director of the entertainment division of Media Pro, owner of Hollywood Multiplex. The events that have taken place in the movie theaters at the Hollywood Multiplex include children's parties, surprise anniversary parties, private screenings, meetings on various topics and events that companies organize for their employees.
Another competitor on this market is Movieplex Cinema SRL. Prices for renting a cinema hall vary depending on the event (more exactly on the support offered by Movieplex besides placing the hall at one's disposal), the capacity of the theater (the firm has 11 theaters with different capacities, from 44 to 503 seats) and the length of the event. “As a rule, the standard offer is to rent a theater for two and a half hours and the price varies depending on the capacity and the equipment,” said Movieplex representatives. Movieplex has hosted birthday parties, private screenings, conferences, company meetings, product launches and exclusive movie launches. There are times when there are 10-15 such events per month, but other periods with only 6-9.
“There has not been any decrease in the demand for renting the movie theaters in this period. Demand is not constant but summer time sees the lowest demand,” say company representatives.
In 2008, the turnover posted by Movieplex amounted to above EUR 5.7 million (RON 24 million) and the profit was approximately EUR 714,000 (RON 3 million). “The value of our main activities such as cinema ticket sales and the sale of advertising space is very high in comparison with revenues from renting the movie theaters,” say company representatives.
otilia.haraga@business-review.ro