A worker sprayed a cinema with disinfectant in Shenyang, China, on March 25.
Photo: AFP/Getty ImagesThis was supposed to be the year China’s theatrical box office became No. 1 in the world. Instead it is setting a different record: the world’s longest closure of movie theaters.
China’s tens of thousands of cinemas closed Jan. 23, months before the novel coronavirus forced similar closures around the world. They have, with limited exceptions, remained shut. The shutdown arrived just ahead of the usually lucrative Lunar New Year moviegoing season, and uncertainty over when they will reopen has complicated planning on both sides of the Pacific.
Without a clear road map, executives in China and the U.S. have looked for guidance from Chinese leader Xi Jinping. Chinese officials have offered limited financial relief to the country’s movie theaters, but an industry trade group recently projected more than two-fifths of the nation’s cinemas could shut down permanently.
The pandemic and its economic fallout appear to be leading to a plot twist for China’s film industry. In the past decade, the country has gone from an afterthought in the global entertainment industry to the world’s second-largest film market behind only North America, topping $9 billion in annual grosses. The country was on track to have 80,000 screens this year, showing a mix of Hollywood imports and domestic productions that have generated a growing share of ticket sales in recent years. Analysts at PricewaterhouseCoopers predicted 2020 was the year China’s box office would overtake the U.S.’s.
Conditions are so dire that the China Film Association, a state-backed industry guild, released a “Movie Theater Survival Status Survey Report” in late May that found 47% of cinemas would run short on cash, and 42% could face permanent closure. A fifth of cinemas surveyed laid off employees in the first two months of the shutdown to cut costs.
That is more dramatic than in the U.S., where there hasn’t been as thorough a study but theater executives privately expect that about 20% of domestic locations could permanently close, particularly independent operations that were already struggling.
The closures in China complicate Hollywood’s plans. Major studios have rescheduled movies multiple times as theater reopenings are postponed, but for releases expected to do significant business in that country, like Walt Disney Co. ’s “Mulan,” opening without the Chinese market makes little sense.
The government initially approved theaters’ reopening in mid-March, but only about 500 cinemas—or 5% of China’s total—did so. They collectively sold a paltry $5,800 worth of tickets on one weekend day, March 22, according to movie-ticketing platform Maoyan Entertainment. After a week of reopening, the government’s film bureau shut theaters again without explanation.
Mr. Xi didn’t help movie-theater operators when he encouraged people to stay at home. During a late-March visit to Hangzhou, a city about two hours from Shanghai, Mr. Xi said it was still too early for mass gatherings if China wanted to keep the virus at bay.
“If you want to see movies, just go watch them online!” he said.
Workers in face masks at a promotional stand for ‘Mulan’ in a Beijing mall on Feb. 16.
Photo: GREG BAKER/AFP/Getty ImagesIn a country where local bureaucrats follow Mr. Xi’s words, the remark led to an environment of caution, where lower-ranking officials were unwilling to open theaters too early, industry executives say. Even after China’s State Council said theaters could reopen with caution in May, no operator did. When Covid-19 cases began resurfacing in Beijing a month later, city authorities again ordered the cinemas to remain closed.
In the U.S., two of the biggest studios, Disney and Comcast Corp. ’s Universal Pictures, have used the cinema shutdown to experiment with novel approaches to online distribution, some of which are expected to stay in place after theaters reopen.
Related Video
China’s government has taken more strides in trying to protect exhibitors than the U.S., where small theater operators have been able to apply for loans under the same stimulus measures as other businesses but haven’t seen any industry-specific legislation introduced.
The front of a closed cinema in Beijing on March 28.
Photo: Hou Yu/China News Service/Getty ImagesThe Chinese government allocated more money from a development fund to subsidize struggling operators. After theaters closed, Chinese studio Huanxi Media decided to pursue a digital distribution strategy for “Lost in Russia,” which had been expected to perform well at the box office during its planned late-January release. Cinema owners responded with a letter to the national film bureau asking it to stop the online release. The letter didn’t end up stopping “Lost in Russia” from making a debut online, but Chinese government officials indicated they may step in with new rules that protect exhibitors against similar moves in the future.
STAY INFORMED
Get a coronavirus briefing six days a week, and a weekly Health newsletter once the crisis abates: Sign up here.
Before the pandemic, major Hollywood studios were negotiating with Chinese authorities about changing a system set in place in 2012 that limits the number of imported films to 34 a year, with only 25% of ticket sales flowing back to studio coffers, versus 50% or more in the U.S.
The deal came up for renegotiation in 2017, but tensions between the two countries amid the U.S.-China trade war stalled talks. Studio chiefs are eager to raise the limit on film imports and get a bigger piece of Chinese ticket sales in the new agreement.
“The share is low compared to other international markets,” but given the size of the market, the revenue is still attractive,” said Xin Zhang, senior analyst of London-based research firm Omdia.
In recent years, the growing sophistication of Chinese-produced movies has led to a greater share of the box office going to homegrown features. With many Chinese citizens stuck at home with TV and streaming options for several months, theater owners may see audiences return to auditoriums for something different, said Richard Gelfond, chief executive of IMAX Corp.
“There’s probably going to be a bigger appetite for blockbuster Hollywood,” he said.
—Erich Schwartzel and Yin Yijun
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
"movie" - Google News
July 06, 2020 at 06:52PM
https://ift.tt/2VMN0S4
Covid-19 Derails China’s Push to Be Biggest Movie Market - The Wall Street Journal
"movie" - Google News
https://ift.tt/35pMQUg
https://ift.tt/3fb7bBl
Bagikan Berita Ini
0 Response to "Covid-19 Derails China’s Push to Be Biggest Movie Market - The Wall Street Journal"
Post a Comment