Kenyan Cinema: financial crisis at Silverbird’s?

Distribution

A shareholder dispute has been a contributory factor leading to the shut-down of Silverbird Cinemas in Kenya. On June 10, 2011, Moses Kemibaro wrote on his blog: “I am what you would call a movie buff, meaning, I take my movie watching quite seriously. I am the kind who does the whole hog – the popcorn, the large soda, a nice pre-booked and central location in the cinema to watch – I take movie watching seriously. It’s been good in Kenya to be a movie buff for the last decade or so when we first started getting releases coming a few years and then a few months after prime time in other global markets. In the last few years, we have become accustomed to getting movies at the same time they are released in London, New York or Tokyo. In addition, the deluge of cinema halls that opened up over the last decade in Kenya, and especially in Nairobi, have made me and lots of other folks a spoilt lot – we took it for granted. Until now that is.

This week saw the Silverbird Cinema chain in Kenya come to grinding halt. This was covered today in two of the major dailies and over 100 employees are now unpaid and unemployed. The signs were pretty obvious as far back as April 2011 when they stopped bringing in new movies for sometime whilst the competing Fox Cinema chain continued to do so. I will not forget going to the Westgate Mall in Westlands and finding the whole massive Silverbird facility completely shut down last month. Yes, the writing has been on the wall. Silverbird was going down. The really sad thing though is that I believe that most Kenyans (who can afford it?) would rather spend a decent amount of money watching a movie at a good cinema rather than the Kes. 50.00 pirated (and low quality) DVDs that are now available on every street corner in Kenya.

It seems that no one really knows what happened to Silverbird Cinemas in Kenya but the news reports today seem to imply that there was a funding crisis and possibly mismanagement? Their facilities were without a doubt world-class and everyone can attest to the fact it seemed like they were onto a good thing. I have no doubt in my mind that someone, or, some business is going to pick up the pieces, either wholly or partially and revive it. Movie buffs like me will gladly pay the premium and still go to the movies to watch that next big blockbuster, on time, on quality, in wide-screen 2D or 3D. Meanwhile, we will need to contend with fewer cinema screens for the time being, and even fewer movie choices as a result. I certainly hope it’s not the beginning of the end of cinema in Kenya but it may well be just that.”

By 21 June 2011, the post received 13 interesting responses. Here is a selection:

Ngach, June 10, 2011 at 11:42 am:

I think it all went downhill after Numetro sold to Silverbird.. someone better buy them out fast, we need those big screens! On a lighter note… found out about this here:  – cracked me up!

Dennis Kioko, June 10, 2011 at 11:49 am :

Just seen another post here: on the same issue. In Tanzania, the movie theatre at Mlimani City Mall gets overflown with even people sitting on the ground. As for Kenya, I think that most people are an emerging middle class, people whose parents could not afford such, but they themselves can. They have grown up pirating movies, when they get to the point they can afford, they find theatres charging over Ksh 300 for a seat at a 2 hour movie. They believe they are been overcharged and have options, as you all point out.

Supremegream, June 10, 2011 at 11:51 am:
I saw this coming some two years ago or so. I remember watching Jackie Chan and Jet Li movie at Prestige Plaza and there were only 3 of us in a 600 seater theater. They were too comfortable with such an audience paying 500 for a ticket without confectioneries, than one that would pay half that amount for a full house.

francis ebuehi, June 10, 2011 at 11:53 am:
… Silverbird Cinemas is still waxing strong in Nigeria and Ghana. I wonder what could have happened in Kenya

Stuna, June 10, 2011 at 12:09 pm
:
From another movie buff: I gather that there was a dispute between the Kenyan minority owners and the Silverbird investors from Nigeria as the local management refused the foreign shareholders any executive posts so they decided to pull out and took out a court injunction to stop them from operating until things were sorted. It is unfortunate but I would imagine another investor will take over all facilities or the share of the Nigerian investors. What’s interesting is that the sole supplier of movies is actually fox in Kenya hence you notice some movies are only shown in Fox Theatres and not in Silverbird. However it’s quite sad given that now the only decent place to watch a movie is Sarit centre due to the quality of the facility. Moreover, the quality of sound and picture was superior at Silverbird cinemas!

Suhayl, June 10, 2011 at 2:06 pm:
Nyali Cinemax is the best movie experience in Kenya – hands down!

Idris, June 10, 2011 at 2:54 pm:

Just back from movies and was saying the same to some guys who were trying to put me off from going to the movie and buy the pirated dvd. May be those are the people who don’t really appreciate them at all.

peter, June 10, 2011 at 5:40 pm:
I like watching movies a lot though the price is too high. I never went to Silverbird but I always go to 20th every once in a while, and I think its still expensive coz its never full house or more than half. They should make it cheaper as supremegream says and not be comfortable with lacklustre attendance. They should charge cheaply and get mass attendance. In US piracy is there but prices are really cheap so many guys can afford to go to the movie places.

Franklin Nnebe, June 11, 2011 at 8:49 am:
I think Silverbird and Fox and NuMetro are following the wrong business model. They charge high because the costs of buying rights to distribute western blockbusters are high. This works for that tiny sliver of middle to high income Africa that are willing to pay high prices for tickets but not for the 90% that live on per capita incomes of less than $1,000 a year. Most of the cinemas should visit the streets of Africa and visit Nollywood (Nigerian home video industry) to understand what people watch and what they are willing to pay for and build their viewing and pricing around that. If they did then you would see Cinemas showing dramatic African movies mostly.
You would pack theatres because tickets would cost anywhere between 50 cents and $1 (40-80 KES or 75 – 150 Naira) since obtaining screen rights would be cheap and they would make money from the teeming African youth who would want to see movies in large format and with friends and dates. They would also sell lots of drinks and snacks and make money there too as well as from advertising.
For movie producers it would be a way for them to separate the wheat from the chaff (so to speak) by using the cinemas to market their movies. The great movies will stay on rotation and encourage people to buy the DVD/VCD version, the rubbish ones will fade to black literally.

Mobilityken, June 14, 2011 at 7:42 am:

I concur with Nnebe. Just to tweak it a little, what cinemas can do is offer a blend of both. Have the low cost movies on off-peak hours to get the masses, and then have prime hours for the ‘high-end’ movies. After all, it is business and if that is what brings in the money and fills the theatre, it is worth a shot.

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