BUOYED by their coup in clinching the lease for a multiplex cinema at the upmarket Dundrum shopping centre in Dublin, two families are ploughing ahead with plans for another major multiplex in the capital, pushing their total spending towards the 40m mark once all the projects in their pipeline have been completed.
The expansion comes relatively late in the evolution of the Irish cinema market, which in the past decade or more has been a hive of activity as heavyweight entrants such as UCI and UGC tried to muscle in. The completion of major shopping centres such as Blanchardstown and Liffey Valley in Dublin spurred on the development of multiplexes that cater for the sprawling population around the city and its hinterland.
The O'Gormans and Spurlings have been in the business for years. The O'Gormans have owned a cinema in Stillorgan, the Ormonde, since the early 1980s, while the Spurlings have focused on regional operations in towns such as Enniscorthy, Dungarvan, Greystones and Castlebar.
A long-standing relationship between the two family patriarchs, Andy O'Gorman and Ossie Spurling, helped to cement a business venture that has seen the families open in Dundrum last year, and advance plans to have two more multiplexes open under the 'Movies@' moniker later this year . . . one in Salthill, Galway, and another in Swords, Co Dublin.
The Salthill complex was due to open last year but has been held up by third-party building problems. The fitout of the premises should be finished within months, while Swords is due to open in the autumn.
"We put forward a good case for the Dundrum project, " said O'Gorman, whose son Brian and daughter Karen Reid form the rest of the family's team. "It's been performing very well to date, way beyond our expectations, " he explained, adding that the two families beat off stiff competition from other operators to secure the site.
It is more than likely that foreign-owned groups as well as indigenous heavyweight Ward-Anderson were also interested in securing a Dundrum base.
O'Gorman said the motivating factor for the venture's final selection didn't necessarily come down simply to the price it was willing to pay, but rather what the company said it would offer.
"You can only go so far with the price. I think we really got it on our expertise and what we could bring to the site. I'm in the business 56 years and Ossie is in it over 30, " said O'Gorman.
Still, there's been some online criticism of the multiplex. Brian O'Gorman counters this by saying that lessons are learned on the way and that the Dundrum experience will also help the families to refine the offering at Swords, which will have 11 screens.
As for cinema prices, they have crept upwards, leading to claims that some cinema operators may be fleecing their customers. Not so, insists Andy O'Gorman.
"We have a fixed cost base and you have to bear in mind that the cost of films has gone up 50% in the past three to four years. There's definitely a limit to what people will pay, but I don't know what that is. But we're not in this just to make money, " he said.
Cinema admissions in the Republic have soared in the past 10 years, hitting almost 16.4 million last year.
That figure was down, however, on 2004 and 2003, when admissions stood at 17.26 million and 17.43 million respectively. Cinema owners say that is largely due to variable film quality, with this year expected to deliver stronger figures as films such as The Da Vinci Code, Mission Impossible 3 and the James Bond film Casino Royale are released. Last year's poor film schedule is reflected in the fact that cinema advertising revenue fell 7.5% compared to 2004.
Already the Dundrum operation has caused a slight fall in visitors to the Ormonde in Stillorgan, and the latter made a small operating loss in 2004, before the Dundrum cinemas opened. O'Gorman said it was expected that the Ormonde would experience a decline in visitors, but stressed it was better to be a partner in the Dundrum multiplex and to gain income from that, rather than have seen a competitor secure the lease.
Graham Spurling, who helps run that family's cinema operations, said the partnership's work at Dundrum drew the attention of the developers, Flynn & O'Flaherty, at Swords. It had been intended to build eight screens at the 200m extension to the shopping centre, but a successful application was lodged to boost the number of screens to 11.
"I think it made financial as well as family sense to form the partnership, " said Spurling regarding the Movies@ venture.
"It would have been difficult for one small family outfit to secure Dundrum, but with two it was easier and we were then big enough to raise the necessary finance."
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