Cathay Cineplexes announced that it will be shutting down its Parkway Parade movie theatre on 27 August (Sunday). While those who live in the vicinity might rue the loss, many of us will not be surprised with this announcement.
This will leave the cinema operator with five remaining locations: Causeway Point (Woodlands), AMK Hub (Ang Mo Kio), Downtown East (Pasir Ris), West Mall (Bukit Batok), and Jem (Jurong). On its website, it also displays an upcoming location in Century Square (Tampines).
Cathay Cineplexes Downsizing Over The Past Few Years
Another reason this closure is not entirely surprising is that Cathay has been downsizing over the past few years – exacerbated by COVID-19.
In 2017, SGX-listed mm2 Asia acquired Cathay Cineplexes for $230 million. At the time, it operated eight cinemas across Singapore. Looking at mm2 Asia’s annual reports, this number remained consistent till 2021.
In its 2022 and 2023 annual reports, it closed one cinema location in Singapore per year. Going down from 8 locations to 7 and then 6 locations.
This was not just isolated to its Singapore business either. It also downsized its Malaysian cinema business. While its Malaysian location count expanded from 11 to 12, its number of screens had scaled down from 103 in FY2021 to 90 screens in FY2023.
Read Also: Isetan To Close Its Parkway Parade Store: Do Retail Stores Have A Chance Of Surviving The Pandemic?
Cinema Attendance In Singapore Still Half Pre-COVID-19 Level
It’s not just Cathay Cineplexes this is suffering either. Cinema attendance in Singapore has shrunk to half the size it was pre-COVID-19. Any business would suffer in such an operating landscape.
According to IMDA, Cinema attendance in 2019 was 18.5 million. In 2020, it plummeted to 4.7 million due to COVID-19 retractions. In 2021 and 2022, the cinema industry staged a comeback – seeing attendance levels rise to 7.6 million and 9.5 million respectively.
In the same IMDA reports, the box office takings in 2022 also dipped over 43% from pre-COVID-19 levels.
| Year | Cinema Attendance | Box Office |
| 2019 | 18.5 million | $175.4 million |
| 2020 | 4.7 million | $49.6 million |
| 2021 | 7.6 million | $80.1 million |
| 2022 | 9.5 million | $99.5 million |
From a business point of view, mm2 Asia’s revenue from cinema operations (which also includes both Singapore and Malaysia) has also dipped as expected.
| Year | Cinema Business |
| FY2020 | $87.9 million |
| FY2021 | $15.7 million |
| FY2022 | $29.4 million |
| FY2023 | $47.4 million |
mm2 Asia Tried To Sell Off Cathay Cineplexes At Half Price – Unsuccessfully
As mentioned, mm2 Asia bought the Cathay Cineplexes cinema business for $230 million in 2017. At the time, the group stated that the move would diversify its operations into the downstream value chain of film production.
By 2021, Cathay had inked a deal to sell its entire cinema business for $84.8 million. While this would have been a massive write-down on its investment, the deal would also remove the loss-making entity off its books.
However, the deal failed to materialise in early 2022 as new variants of COVID-19 clouded the outlook for the business. The party that was going to buy the cinema business chose to convert its $6 million deposit into new mm2 Asia shares instead.
The Rise Of Online Streaming = The Death Of Cinema?
The whole family gets to watch numerous high-quality content for the costs of a single movie ticket a month. If that sounds like an unbeatable deal, we can appreciate the downfall of the cinema business.
The cost of a monthly streaming subscription is also similar to one movie ticket – but gives viewers a big library of quality content. For example, Disney Plus costs under $12 a month, Netflix starts from $13, Amazon Prime is still at $2.99, and HBO GO costs under $14.
On one hand, streaming had already started to impact the cinema business. We can look at COVID-19 simply accelerating that process – and allowing to watch high-quality shows from the comfort of our home.
If the movie theatre is to survive beyond our children’s generation, it must evolve. Blockbusters alone may not secure its future. We can simply watch the same blockbusters in our home, and perhaps pay for it in a different way in the future.
The experience of going to the movies must beat the experience of watching the movie in our living room or the palm of our hands. The other challenge is that the current experiences may not be enough – Gold Class, IMAX, F&B options and others we already see (in its current form at least).
Read Also: 4 Jobs That Will See The Biggest Job Losses Due To Generative AI By 2030
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