THE sale of Vue cinemas for close to £1 billion is a significant vote of confidence in the future of movie-going that once looked to be dying out.
Doughty has doubled its initial outlay on the deal in just two and a half years, though the profit is closer to 30 per cent when subsequent acquisitions and investment are taken into account. Even so, it is a handsome return at a time when cinema is competing with an ever-increasing number of alternative sources of entertainment.
In fact, cinema has seen off a succession of rival forms of moving-watching, from television and video, to DVDs and on-demand services from broadcasters and specialists such as Netflix and LoveFilm.
What seems to have saved the industry is the way it has adapted to the needs of the older and younger generations, the former still keen to enjoy something they grew up with and the young who want more than a single offering in an old flea pit.
The emergence of the multi-screen sheds, new cost-saving technology, plenty of free parking and more food outlets has helped lift audiences which had slumped from 1.6 billion in 1946 to just 55 million by 1984. Last year they were back to 172 million.
Much depends, of course, on the quality of the product and whether it is preferable to what else is on offer. Tax breaks for film makers have helped spur more home-grown films, while the Hollywood blockbusters are heavily promoted and continue to break box office records. Notable successes include The King’s Speech and Skyfall while the Harry Potter series and the werewolf movies have appealed to largely teenage audiences.
Even in these days of the big bucks production, cinema-going remains relatively cheap, with tickets for under a tenner, considerably less than a pop concert or football match.
It is a pity, however, that cinemas still seem incapable of offering more than unhealthy fast food and drink, and products wrapped in packaging designed to rustle and annoy.
Apart from that small gripe, they have welcomed back an older generation who may have got bored with weekend television game and reality shows, and a mobile-driven younger audience who can find something appealing about the big screen.
Lloyds share sale is a milestone in bank crisis
George Osborne’s not-so-surpising plan to begin selling shares in Lloyds Banking Group should mark the beginning of the end of the crisis that engulfed the sector in 2007-08.
The Chancellor must have prayed for shares in at least one of the bailed out banks to reach break even and give him a chance to realise some of the £65 billion poured into Lloyds and Royal Bank of Scotland.
The timing could not have been better as it is unlikely a privatisation would be ready until next year, neatly giving him funds to play with in time for the 2015 Budget and General Election thereafter.
There are those, including the SNP treasury spokesman Stewart Hosie, who say the shares should not be sold at a loss. But he forgets that the bail-out was a rescue fund, not an investment. No-one suggested the taxpayer should get his money back or make a profit.
An announcement is due when Osborne delivers his Mansion House speech next week which will also raise questions about his intention to follow the recommendations of his own banking standards’ inquiry given that he has already decided on a course of action.