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Ster-Kinekor’s Chapter 11 Closure: A New Reality for South African Cinema

Ster-Kinekor, a name synonymous with cinema in South Africa for decades, entered business rescue (akin to Chapter 11 bankruptcy in the US) in January 2021. This event sent ripples throughout the South African entertainment industry, raising questions about the future of cinema-going and the long-term impact on film distribution.

The COVID-19 pandemic served as the final blow to a company already facing significant challenges. Lockdowns, capacity restrictions, and a general reluctance among the public to gather in enclosed spaces drastically reduced cinema attendance. This resulted in a crippling revenue loss, making it impossible for Ster-Kinekor to meet its financial obligations.

However, the pandemic wasn’t the sole cause of Ster-Kinekor’s predicament. The rise of streaming services, such as Netflix and Showmax, had been steadily eroding cinema’s dominance in the entertainment landscape for years. Consumers increasingly opted for the convenience and affordability of watching movies and shows from the comfort of their homes.

The company’s initial strategy of focusing on blockbuster releases and premium experiences wasn’t enough to counter these trends. While big-budget films still drew crowds, the overall volume of cinema-goers declined, leaving many screenings sparsely populated. The high cost of maintaining numerous cinema complexes across the country further compounded the problem.

During the business rescue process, several options were explored, including restructuring debt, renegotiating lease agreements with landlords, and seeking new investment. Ultimately, some cinema locations were closed, while others underwent renovations to improve the viewing experience. A renewed focus on diversifying offerings, such as hosting corporate events and private screenings, also emerged.

The closure of Ster-Kinekor locations represents more than just the loss of entertainment venues. It also impacts the broader film ecosystem, including local film production, distribution companies, and the livelihoods of numerous employees working in the industry. The reduced number of screens available could potentially limit the exposure of South African films and independent productions.

While Ster-Kinekor has emerged from business rescue, the challenges remain significant. The company must continue to adapt to the evolving entertainment landscape, embracing new technologies and finding innovative ways to attract audiences back to the cinema. This includes offering unique experiences that can’t be replicated at home, such as immersive formats, special events, and a greater emphasis on personalized service. The future of Ster-Kinekor, and indeed the South African cinema industry as a whole, hinges on its ability to navigate these challenges successfully and redefine the role of the cinema in the digital age.