Lithuania Tallies COVID-19 Box Office Losses


    VILNIUS: Lithuanian cinemas are expected to lose 8 m EUR in ticket sales and another 4 m in additional income in 2020 as a result of the COVID-19 crisis, according to an evaluation of the long-term effects of the virus on cinema operators, conducted by the law firm Sorainen at the request of the Lithuanian Film Centre.

    Cinema results had been increasing annually in Lithuania. In 2019 cinemas had 4.1 m. admissions to 383 films and collected 22.5 m EUR. In 2020 an increase of 5% was anticipated before the COVID-19 quarantine went into effect. Based on the data provided by the five major cinema operators in Lithuania, that make up 95% of the market share in the country, in the period since the quarantine was introduced the market has experienced losses of around 1 m EUR, even after deducting the compensations received.

    The analysis suggests that during 2020 the market will experience losses greater than 8 m EUR from ticket sales, while losses from other sales (drinks, snacks, etc) could reach 4 m EUR. The total loss of income could reach around 12 m EUR.

    The study noted that a reduced VAT rate is being implemented for cinema tickets in the EU. The reduced VAT rate is implemented in Croatia (5%), Ireland (13.5%), Germany (7%), Finland (10%), Poland (8%), and Slovenia (8.5%). In Norway, as a method to counter the economic crisis, the already reduced VAT rate of 12% for ticket sales has been further reduced to 6%. Lithuanian cinema operators say it could be one of the most effective salvaging mechanisms in the national market. By reducing the present-day standard tariff of 21% to 5% or 9% and limiting its implementation to two or three years, cinema revenues could reach the pre-quarantine level. The reduced VAT rate for cinema tickets could aid the entire cinema sector and become one of the economic factors encouraging shareholders to invest in the development of cinemas in the region, thus expanding the accessibility of cinemas.

    “The cinema operation business is probably the only field of the creative industries that has presented exhaustive analyses. Since 2014, the Lithuanian Film Centre has presented weekly reports on film screenings, summarised them at the end of the year, and therefore we have a good basis for analysis and for evaluation of trends as well as forecasting,” said the director of the Lithuanian Film Centre, Rolandas Kvietkauskas.

    All cultural events in Lithuania were banned on 16 March, and all Lithuanian cinemas were forced to close. Several attempts to organise alternative film screenings have not replaced the normal business and economic model of the sector. Local cinema operators are also dependent on the global market changes during the economic crisis, and film premieres called off in the USA and Europe are influencing the planning of cinema activities.