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Cinemex Struggles to Survive

Photo by: Mexico Business News

By MBN Staff | MBN staff - Mon, 02/15/2021 - 10:04

The pandemic struck many industries around the world. One of the worst hits was to the cinema industry, which remained closed for months. Cinemex, Mexico's second-largest cinema chain, has confirmed that it will close 145 cinemas to relieve part of its US$230 million debt. The company added that it will reopen once Hollywood resumes production of major releases and it is able to operate without harsh restrictions. According to Bloomberg, Cinemex is reportedly closing a deal with banks including BBVA, HSBC Holdings, Banco Santander and Scotiabank to finance its debt. However, the media reported, the company could face lawsuits over non-payment of loans and property leases.

Blow After Blow

Domestic box office revenues fell from MX$18 billion (US$910 million) in 2019 to MX$3.5 billion (US179 million) in 2020, a decrease of 80 percent, according to figures from the National Chamber of the Film Industry (CANACINE). As of mid-December last year, 62 million cinema tickets were sold in the country, while in 2019, sales reached 335 million. In an attempt to earn some income, cinemas started offering their food combos through delivery apps like DiDi Food and Rappi.

Cinemas were hoping to lean on big premieres when allowed to reopen to attract more people to their theatres. However, news of delays and even the cancellation of releases in favor of streaming platforms came as a bitter pill to swallow. The Mulan live-action movie was due to be released in cinemas on Mar. 9, 2020, but after postponing it for months, Disney decided to release it exclusively on its streaming platform. Same thing happened with the animated film Soul. This sparked discontent among independent cinema owners and major chains around the world, some of which expressed their anger on social media.

A cinema owner in France destroyed a piece of Mulan promotional artwork in protest against Disney’s decision to skip cinemas. pic.twitter.com/R1Jl9xpGgz
— Films to Films 📽️🎬 (@FilmstoFilms_) August 6, 2020

Challenges will remain. Recently, Warner Bros. announced that its upcoming movies will premiere on HBO Max, a service coming to Mexico in June 2020 to replace HBO Go. In addition, the industry still battles with the belief that cinemas are high-risk places for contagion. “Almost a year after the start of the COVID-19 pandemic, today we can assure through extensive scientific studies that have been delivered to the authorities in different occasions, that cinemas should not have to be closed as they do not represent a contagion risk,” said CANACINE, according to a previous MBN article.

After Cinemex’s announcement, the country's largest chain Cinépolis expressed its solidarity on social media. “Companies in the sector are facing great challenges and making very difficult decisions with the sole goal of surviving,” the company said in a statement. “Relentless competition,” Cinépolis added, has allowed Mexico to have the best cinemas for many years and to give Mexicans access to one of the lowest ticket prices in Latin America.

Moreover, thanks to competition, cinemas have established in small towns far from the big cities, “which contributes to bringing culture and entertainment to families across the nation,” reads the statement.