Vista Group plans job cuts as global cinemas remain closed

Thursday, 4 June 2020

Cinemas in most countries remained closed, and those that were open were required to reduce capacity.

Film software company Vista Group has announced an unspecified number of redundancies as cinemas continue to struggle with Covid-19 restrictions.

The company, which has about 400 staff in New Zealand and 600 globally, told the NZX on Thursday that it had begun consulting with staff around a new slimmed down version of the company.

“We are operating in a situation where we do not know when our customers (80 per cent-plus of Vista Group customers are cinemas) will be able to reopen in a meaningful way,'' Vista Group chief executive Kimbal Riley said.

''This has had, and continues to have, a significant impact on their businesses – and therefore ours.”

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“It is also clear to us that our customers’ businesses will change when they do reopen, and so Vista Group will need to change in order to address their new needs, and position ourselves optimally to 'enhance the moviegoer experience' in whatever a “new normal” looks like post-Covid-19.”

Riley did not say how many job losses may occur but if the proposal went ahead, it was expected to save between $12 million and $15m.

Shane Jarrett of the Tivoli Cinema in Cambridge runs one of the smaller cinemas which have opened for business while bigger venues remain closed.

Vista recently completed a $65m capital raise, and has taken wage subsidies in New Zealand and the US but Riley said government assistance was only paying about a third of its New Zealand wage bill.

Staff and directors had taken pay or fee cuts, with staff down to 80 per cent of their regular wages on reduced hours.

'We do not believe it is right to require our people to reduce their hours and income for an unquantified, but potentially extended period,'' Riley said.

Despite its difficulties, the group has come up with a number of innovative ways to help cinemas to reopen, and has won new business during the pandemic, mostly in Europe.

Innovations included a ''cinema reopening kit'' with social distancing seating capability, which was already in use in cinemas in Texas.

Cinemas in most countries remained closed and those that were open were required to reduce capacity, distance moviegoers, and generally did not have new content to show because studio releases had stalled, Riley said.

Vista's marketing arm Movio had launched a new research project in the USA, the UK and Australia, focused on increased self-service and capability for studios, and Vista Cinema was working with American cinemas to reconfigure their mobile apps to enable customers to buy popcorn and other items through kerb-side pickup

It had also partnered with Kiwi company Shift72 to let cinemas launch their own TVOD (Transactional Video on Demand) platforms, which was already live in the USA and New Zealand.

While many big chain cinemas are still to reopen, some independent cinemas are now running sessions.

Reading Cinemas planned to have its whole New Zealand chain reopened by Thursday.