Category Archives: Countries

China Special Cinema Digest – Thursday 25 September 2014

Today we catch up Chinese cinema news from the last couple of weeks, which I was unable to report while travelling. As always, the Google translation is not perfect, but as we do not have a journalist on staff who can translate perfectly from Mandarin (yet!), it will have to do. We are also saving the biggest piece of cinema news to come out of China recently for a separate post.

Chen Xing technology laser

Our favourite Chinese (digital) cinema equipment manufacturer Chen Xing has issues a list of “Seven Rules for Cinema Brand Building” that heavily promotes its own technologies and solutions, while also providing an insight into the company’s thinking and strategy.

Don’t forget what we’ve written about them before: “China’s ‘Last Mile’ Plan for Digital Cinema: Ditch Western Technology.” This is as much true for smartphones and airplanes as it is for cinema equipment – China does not want to keep importing ‘Western’ technologies but build their own (then export it). Such competition and innovation should not be seen as a threat but a good thing.

The Seven Rules are: acoustical design, sound system, laser light source projection, TMS centralized management and control systems, cinema ticketing management system and service quality guarantee system.

Chen Xing talks about the alternatives it will offer up when it comes to laser (illuminated) projection, as well as immersive audio, where its Cinelab has developed 5.1, 15.1 and 17.1 audio which “get rid of the shackles of sources,” and offer “the perfect interpretation of the Dolby (ATMOS) panoramic sound studio truest sound.”

Chen Xing fires a shot across the bows of the other manufacturers by pointing out that while not being part of the original DCI elite, it is one of the largest server/media block deployers in the world today.

Digital Film for film and television industry has brought tremendous changes. Especially in distribution and exhibition side, digital cinema technology has maintained rapid growth in recent years. Of course, these are inseparable from the updated device technology. Regardless nowadays 3D, IMAX, 4K and other high-tech marketing, have become an end shadow vane hall, the market demand for high-tech also “hubbub straight on.” Christie, Barco, NEC, SONY have launched projectors with laser light source, which means Hollywood recommended type of light source laser source trend.

Among them, in the digital cinema systems, as film screenings server core products while always being SONY, GDC, Dolby, Doremi and other foreign manufacturers, “occupation”, but with the development of technology, more and more Chinese national brand manufacturers Chen Xing Technology began as “emerging” by the market influence is also rising. It is understood that the field of the world’s digital projectors DCI-compliant digital cinema server products, market share and influence were sorted by: GDC, Dolby, Doremi, Chen Xing AQ series.  LINK

Imax Tianjin

Imax screens only account for one per cent (1%) of the total Mainland screen count but an astonishing ten per cent (10%) of the box office, according to an interview with Imax’s director in China Yuan Hong. He also reiterates that China’s total box office will overtake the United States, some time between 2018 and 2020. “When will we surpass the United States? Five years ago we did not expect to ask this question, now it is just around the corner,” he observes.

Also at the box office, too, “as the movie, the theater itself is dependent on bringing new grossing film screenings, but also for the huge traffic.” Especially as the Lunar New Year stalls, summer gears up. “It also shows that, for shopping centre developers, the introduction of a cinema format still has a very good future.” At the box office, although high, it brings high turnover, but the scene, Yuan Hong also points out is “broke.” “For the cinema itself the profit margins are very limited, even if the movie is good, it is quicker to make money from popcorn, drinks, toys and other Transformers. ”  LINK

Read More »

Zut Alors! France Discovers Secret to Reversing Cinema Decline

France 4 Euro scheme

While the US grapple with a poor summer box office (BO) most of western Europe seems to have accepted that as a mature cinema market, its countries will see stasis or gradual stagnation only interrupted by the occasional outsize local hit (Italy last year, Ireland this summer). German epitomises this trend, with the recent study of cinema attendance 2009-2013 showing an overall slow decline.

But one European country has challenged the notion that secular decline in the cinema sector is a structural inevitability of changing demographics, technological and economical trends – and it appears to have reversed that decline. Not surprisingly, perhaps, the country in question is France.

France is the only country in the world to take cinema seriously enough to consider the declining cinema attendance a national emergency. Having launched several public initiatives to counter it, the good news is that early indications are that the decline can not just be halted but reversed.

Focus on the Next Generation of Cinema Goers

We have reported earlier on preliminary findings, but these have now been confirmed by the the Centre National du Cinéma (the National Cinema Centre - CNC) in a major report.

On 1 January 2014 French exhibitors introduced a scheme whereby children under the age of 14 would only pay four euro (€4 – USD $5.25) for cinema tickets for every screening of every film for every day. This was a joint public-private effort with the French government doing its part, as noted in an article published a month before the scheme was launched.

This operation, “launching in 2014 but which is intended to continue beyond”, is in the context of the government’s decision to lower on January 1st the VAT on cinema admissions of 7.5% to 5% said Marc-Olivier Sebbag, General Manager of the FNCF (National Federation of French Cinemas).

The VAT reduction desired by the government, is being voted on by MPs. The Minister of Culture Aurélie Filippetti welcomed the “democratization initiative taken by members of the FNCF.”

There was some opposition from distributors at the time – I can’t imagine Disney in particular being thrilled about this – but with buy-in from all cinemas, as well as the Ministry of Culture, there was no way that Hollywood studios would be permitted to obstruct this initiative.

French films 2014 6-14 year olds

The FNCF was clear that the goal was to reverse the declining attendance, though they were prepared to re-appraise the terms and methods, based on how it played out.

For the federation, the goal is, “in a context of declining attendance,” to encourage young people to come “more easily and more frequently to the movies” and build audiences for the future. “This is a population that goes to the movies as a family, we therefore address the more general family audience,” said Marc-Olivier Sebbag.

“We will take stock at the end of the first year and we will see whether it should be adjusted, for example by changing the age or price,” said he said.

With under-14 accounting for eight to nine percent (8%-9%) of total admissions, or 16 million out of 200 million, this was a significant step as average ticket prices for this age group was €5.50, compared to the average cinema ticket price in France of €6.42.

Read More »

Chinese Box Office Growth Driven by Women and Millennials

Tiny times 3

The China Film Association and other units launched the “2014 Chinese Film Art Report” and “2014 China Film Industry Report” earlier this week in Beijing.

The reports analyse cinema consumption patterns of domestic Chinese films and finds that they are primarily driven by females, Millennials and repeat viewing, with an astonishing per head spending of several hundred dollars per month at the multiplex. The reports also worries about the “shallow” themes of some of the most popular Chinese films.

With foreign (mainly Hollywood) films restricted in the Mainland market under the 20+14 quota, China’s cinema growth is taking place mainly on the back of domestic films. The government is keen to encourage this growth, which is why it is focusing research efforts on understanding cinema consumption patterns.

These two reports look at 2013 releases, which totalled 311 movies, of which 250 were domestic films(1) and 61 foreign films(2). Out of these 219 were categorized as genre films, such as comedy, romance, and action films, while 31 were categorized as “non-genre”.

It notes that out of 59 films that earned more than one billion yuan at the box office 32 were domestic, with domestic films accounting for 58% of overall takings, the highest number ever for Chinese cinemas.

‘A Great Leap Backward’

The report and articles about it seize upon the youth focus and themes of the most successful films.

It is noteworthy that the themes about the current urban population of the urban youth film themes of love and youth, grow up to become a dark horse, and rescue. The higher box office films “To Youth”, “Tiny Times”, “Chinese Partner,” “Break the Contract”, “That Was Stolen Five Years”, etc., all have a youthful theme. But the report notes that, while a good number of youth films, many of the movie lacks intrinsic emotional power and creative artistic qualities, and themes of these films focus on youth and substance, youth and love, youth and nostalgia, but lack a richer ambiguity.

The article goes on to lambast the “speculative mentality prevailing” in many youth films with the highest market share, saying “the youth theme of this bonanza is shallow excessive consumption.” The sentiment is perhaps understandable as even western media has latched onto what makes films such as “Tiny Times 3″ so popular.

YouTube Preview Image

Here is for example what the BBC had to say about it:

Tiny Times couldn’t be further from Mao’s ascetic communism: it is a wholesale celebration of conspicuous consumption and materialism that has been described as a cross between Sex and the City and The Devil Wears Prada.

The series follows four attractive, fashion-obsessed young women in Shanghai: Lily, Ruby, Lin and Nan Xiang. It chronicles their lives and romances. The actresses look perfect – nicely groomed and slim. There are constant references to sports cars and expensive brands such as Prada and Gucci. The characters are often in opulent surroundings as they enter into relationships with handsome, well-dressed men.

Read More »

German Cinema Screen Trends 2009-2013: Specialist Screens See Strong Growth

German cinema screens 2009-2013

The German Federal Film Board (FFA) has just published a detailed study (pdf) of cinema screen trends over the last five years, with some surprising findings. As a mature exhibition market, multiplex numbers are static, but there is significant growth of outdoor and specialist screens.

The number of multiplex screens in 2013 was exactly the same as in 2009: 1,294, though peaking at 1,301 in 2010. There were more than twice as many non-multiplex/traditional screens, though these declined from 2,870 in 2009 to 2,737 in 2013 in a trend that is likely to continue and contributed to decline of total screens, though at just -0.2% in the most recent year (equivalent to seven screens), less pronounced than past years.

Though the report does not mention it, it is important to remember that these were the key years for digital cinema implementation in Germany. However, the full digital death toll is likely to only come in the statistics for 2014 when the termination of 35mm print distribution is likely to see a significant drop in the numbers of ‘traditional screens’.

What is most interesting to note is the growth of specialised screens, which increased from 570 in 2009 to 586 in 2012, before settling at 579 for the last year of the report. These include Community/Culture centre cinemas (162), Associations (136) and University cinemas (126), with other types of cinemas as well, most of which did not screen film on anything more than a weekly basis.

Falling Overall Attendance

German cinema attendance

Despite two small year-on-year rises in the years covered by the report, overall cinema attendance in Germany is showing a slow but steady decline. Interestingly traditional screens have held their own against multiplex screens, having nearly half of the total market – 49.2% against 46.9% for the multiplex screens. Multiplex screens only outperformed traditional screens in 2010, which was also the year of lowest overall cinema attendance.

Read More »

China Cinema Future – Barrage 2: Return of the Tucao

Cinema barrage

We were quite overwhelmed by the response to last week’s article about how China is inventing the future of cinema with the concept of ‘barrage’. (Thank you for all the tweets, Facebook posts, emails, LinkedIn mentions and other shares.) So we have decided to do what Hollywood always does when it has an unexpected hit on its hands, which is to quickly rush out a sequel.

The cinema barrage concept also stirred a lot of interest in China (we’ve found no less than 353 articles). In the last piece we focused on the trial involving The Legend of Qin (a.k.a. Qin’s Moon). This time we look at the other film to have tried this concept in a slightly different format at the same time, Generation 90 blockbuster Tiny Times 3.0.

Putting it all on the screen

Unlike the Legend of Qin special ‘barrage’ screening you can see from the picture above that for Tiny Times 3.0 the barrage was overlaid on the main screen showing the films, rather than projected onto the walls on either side of the screen. This makes the tucaos harder to ignore, so it is obviously only something for those cinema goers who seek out this activity, rather than casual cinema goers.

Call it striking up a conversation with the auditorium or turning the cinema screen into a graffiti wall for people to sign temporary messages.

JRJ.com interviews Wang Jun, who was responsible for the Tiny Times 3.0 barrage trial.

Mr Wang was keen to point out that this was an early experiment and is not something that should be expected to be rolled out to every screen any time soon. But the first question was about the equipment and cost.

Wang says that “the barrage is not complicated. There are numerous equipment package available now that add up to about 100,000 yuan [USD $16,240].” He then goes on to elaborate:

First, the film technology currently requires a digital movie player is a secret key [KDM?]. Simultaneous subtitles during playback and video cannot be implemented under the current terms from the policy. This broadcast mainly relies on our software. Only a screening device hardware is not speculation that the two were a movie projector screen with a barrage content superimposed on each other.

The current software was designed for 200 simultaneous participants, which Wang admits is a problem when you have sold 250 tickets. Questioned about whether the wifi network can handle that many simultaneous streams, Wang points out that because these are only short messages there is actually relatively little data being handled.

Read More »

China Just Invented the Future of Cinema Watching (But Everyone Older Than 30 Will Hate It)

The Legend of Qin - Qin's Moon

This week saw a cinema screening in China that may prove a watershed moment for how films are watched on the big screen. But chances are that unless you are a Millennial, particularly in Asia, you are not going to want to embrace it.

I’ve seen things…

Covering mainland China as a non-Mandarin speaker based in Singapore for me is a bit like watching an outdoor screening of Bladerunner from a neighbouring roof through a pair of binoculars; I can make out most of what is happening, pick up a lot of what is said, though I cannot pretend to understand everything that is going on. But to quote from the films memorable final monologue, “I’ve seen things you people wouldn’t believe.”

Because my perspective, disadvantaged though it may be, provides some fascinating insights into things happening in the Chinese exhibition industry, whether it is bizarre hammer attacks, concession food hygiene scares, Wanda IPO shenanigans or inherent structural market weaknesses - and that’s just in the last two weeks! And like Bladerunner this perspective offers a very real glimpse into the future – of cinema.

Because it is important to remember that the future of cinema does not lie in the west, which only offers stasis or a gentle decline of shrinking older audiences into wider, more comfortable and expensive seats, watching Avengers VII or a Met Opera. That is how THE END of cinema going as we know it plays out in cinema auditoriums everywhere from multiplexes in Manchester to art-houses in Atlanta, observed with gourmet popcorn and a glass of wine in our hand.

Whereas in China and Asia, cinema continue to grow and evolve as a social experience in the non-flickering digital projection light off the Imax/CFG screen. That is where we have to look to understand the future, particularly if we want to remain part of it.

China and Asia – the Cinema Innovators

We don’t need to rehash the already well-established importance of China to the global film and cinema business, whether it’s the gargantuan box office earning of Transformers 4 or the fact that it is the single most important growth market for Imax. What is important is not that China is now the second biggest cinema market in the world – though on uncertain foundations, as we’ve discussed many times before – but that it is a market that is continuing to expand.

This is equally true for the rest of the Far East and Southeast Asia, with the exception of Japan. The cinema business in South Asia is also growing, but with more restrictions, particularly in India where it is hampered by red tape and costly malls. (India also has a different and more traditionalist – not to say conservative – cinema going culture, that is in many way closer to that in the west than in China.)

So when we talk about China, it is often also a shorthand for talking about cinema developments in an arc across Asia that stretches from Seoul/Beijing/Tokyo, down through Singapore/Jakarta/Kuala Lumpur through to Chennai/Islamabad/Dubai.

It is in these markets that we are seeing the greatest innovations when it comes to cinemas. This comes from most of them being under-screened and unencumbered by legacy cinemas and multiplexes with their analogue heritage, as well as having a young population. It is easier to embrace the future if you can build it from scratch than if you have to retrofit it, particularly for audiences that don’t have a fixed concept of what ‘cinema’ should be. Asia is the only continent where the majority of cinemas that have never seen a 35mm print will soon outnumber those that at least once had a film projector. Asia *is* digital cinema.

Read More »

Paris-based MK2 buys Spanish exhibitor Cinesur

MK2 40 ans

Paris-based exhibitor and distributor MK2 has bought Spain’s third largest exhibitor Cinesur in a deal valued at around €10.5 million. MK2, which this month celebrates its 40th anniversary, is based only in France’s capital where it controls 11 multiplexes with 65 screens, as well as four high-end theatres.

The deal has surprised industry watchers, as there are few obvious synergies between the two chains. MK2 has already announced that it will be closing two Cinesur cinemas in the province of Malaga with a total of 16 screens going dark

Cinesur was established in 1932 by the Sanchez-Ramade family and is focused on the southern part of Spain around Andalucia in cities such as Seville, Cordoba, Malaga and Toledo. The exhibitor was put up for sale in 2011 when the other parts of the Sanchez-Ramade business empire (primarily construction) took a hit.

It was supposed to be bought by UK’s Cineworld, which instead pulled out at the 11th hour and ended up merging with Israeli/Central European chain Cinema City instead. Cinesur has nine cinemas, with a total of 120 screens and 22,000 seats, part of the deal.

According to the then press release, Cineworld was set to pay €18.6 million for the business. Though no price has been announced this time, it is thought that Mk2 paid around €10.5 million, which would imply a near halving of the price and perhaps the primary driver for the deal. The holding company of Cinesur was also in bankruptcy, making the deal faster and cheaper. As Diario Sur put it, the chain was “going through a serious crisis that forced it to hang the ‘For Sale’ sign on their cinemas. ” With both similarly-sized circuits having limited geographical spread and different languages, it is difficult to see what if any immediate synergies the deal offers.

le Salle MK2

MK2 was founded by the legendary French producer/distributor Marin Karmitz, with his son Nathanael Karmitz taking over the business in 2005. In 2012 the company suffered from four costly box office failures (including “On the Road”, by Walter Salles, and “Like Someone in Love”, by Abbas Kiarostami) and switched focus to its cinema and catalogue of around 500 titles. At this year’s Cannes Film Festival, though, the company was once again ubiquitous, handling distribution of the award-winning “Mommy” by Xavier Dolan.

Read More »

Cinema Audiences Getting Older, German Study Finds

FFA logo

The German Federal Film Board (FFA - Filmförderungsanstalt) has published its annual reports on cinema attendance and Top 75 films for Germany in 2013.

Noting successes for German titles last year, the two reports also record a significant decline in cinema attendance by young people but also a marked increase by older patrons. The findings are in line and emphasise trends in other developed markets, highlighting the needs to promote youth cinema attendance, while at the same time anchoring older audiences.

Demonstrating the customary German thoroughness and attention to detail, the reports were produced on the basis of the Media*Scope project from the Gesellschaft für Konsumforschung (GfK), whose film-related data FFA has exclusive use of, with the panel including no less than 25,000 participants and representatives of the German population over the age of 10.

The first report ‘Auswertung der Top 75-Filmtitel des Jahres 2013 nach soziodemografischen sowie kino- u. filmspezifischen Informationen’ (Evaluation of the Top 75 Movie Titles of 2013 by socio-demographic and cinema-and film-specific information)(PDF link) looks at the box office performance of German cinemas of the past year. While German box office as a whole declined from euro 1,033 million to euro 1,023 million (down one per cent) and attendance fell by 4% from 135.1 million to 129.7 million, as highlighted in the European Audiovisual Observatory 2013 annual report’s findings, the FFA report accentuates the positive by focusing on the success of German films.

Germany Top 75 Cinema attendance

Of the 75 most popular film of 2013 no less than 22 were German productions, which achieved an attendance record of 25.2 million tickets sold. This is more than twice as much as the 13 German productions that broke into the Top 75 in 2012 and only achieved attendance figures of 11.3 million ticket buyers. Local production “Fack Ju Göthe” is also the first German film since 2008′s “Keinohrhasen” to be the most successful film of the year, whether German or Hollywood. However, total attendance for both the Top 75 and all film were down on 2012. Even if they were up on the prior two years, the recent high-water mark is still 2009 (Avatar).

Germany cinema attendance age group

The report does an excellent job of breaking down cinema attendance for each Top 75 film by age (above), gender, income group, employment status, educational level, household size, day-of-the-week attendance, awareness of film’s genre and enough other categories to make even Nate Silver cry uncle!

It is the second report, however, that makes for more troubling reading: ‘Kinobesucher 2013 – Strukturen und Entwicklungen’ (‘Moviegoers 2013 – structures and trends’) (PDF link).

Read More »

What Wanda’s IPO Prospectus Tell Us About China’s Cinema Market

Wanda Cinemas

No less than 30 Chinese companies are looking to list on US stock exchanges this year, led by Internet giants such as JD.com and Alibaba. The reason for choosing the likes of Nasdaq is because unlike their Chinese counterparts they don’t require three years of profitability as well as US regulations that allow for different classes of voting stock. In total some USD $36.6 billion has been raised by 140 Chinese companies through U.S.-based initial public offerings (IPOs) since 2000. But one Chinese company that isn’t going down this route is Wanda Cinemas.

As we have already reported, Wanda is planning a two billion yuan (USD $321 million) IPO ahead of a listing on the Shenzhen Stock Exchange. This is likely to make it China’s biggest domestic IPO in 2014, even if it is overshadowed internationally by Alibaba’s U.S. listing. The smaller film distributor and exhibitor Shanghai Film Co. has also announced plans for a 969 million yuan (USD $145 million) IPO. But it is Wanda that we will focus on as it is more of a bellwether on the state of the Chinese exhibition industry.

It is important to remember that one of the reasons Wanda is not seeking a U.S.-based IPO is because it has already listed AMC Entertainment Holdings, which controls the second largest North American cinema chain. This listing raised USD $314 million, i.e. almost as much as the Wanda’s China IPO aims for. The stock done very well since being listed, with shares rising from USD $18.81 to $22.39, after reaching a high of $26.68 in the brief six-month time span in which it has been trading.

Wanda Cinema’s IPO: the Basics

By way of quick recap, WSJ tells us that:

Wanda Cinema Line is controlled by commercial-property conglomerate Dalian Wanda Group, which always installs cinemas in the shopping complexes it develops. With that support, Wanda Cinema has expanded into smaller Chinese cities. Dalian Wanda is controlled by its chairman, tycoon Wang Jianlin, who is the country’s richest man. Wanda Cinema Line owned 142 cinemas in 73 cities with 1,247 screens at the end of 2013, its preliminary prospectus said. Its net profit in 2013 rose 55% to 603 million yuan from 388 million yuan in 2012, while revenue rose to 4.02 billion yuan, up 33% from 3.03 billion yuan.

It is worth flagging again the concerns raised in the risk factors section of the prospectus, as highlighted by the WSJ:

China’s largest cinema chain takes a dim view of the domestic movie industry. In the risk factors section, the prospectus notes that “While Chinese films have achieved a certain volume, there are relatively few films of commercial value” and regulations limit foreign film imports. Therefore, Wanda faces risks resulting from the “lack of quality films in China that can really win good praise and reviews and completely satisfy market needs and the cultural demands of viewers.”

So while everyone is celebrating the success of “X-Men: Days of future Past” and “The Monkey King” in the first half of this year, local action epic “The Iceman 3D” underperformed and had to be split into two releases in order to get a decent return on its runaway budget.  Meanwhile, even Hollywood flops like “Transcendence” didn’t perform much better in China. We have also previously flagged up on this site the very real risk of a crash that the Chinese cinema business faces. Read More »

Local Films to Blame for Decline in European Box Office in 2013

European Cinema Statistics 2013

The European Audiovisual Observatory (EAO) has released its statistics on European cinema admissions in 2013 ahead of the Cannes Film Festival and they make for grim reading. We have already written about the preliminary figures (Europe’s Cinema Attendance Decline is Greatly Exaggerated), so we will not cover old ground.

It is worth, however, briefly recapping some of the key analysis that still hold true for this data:

  • Decline was mainly due to lack of any major local hits (Italy was an exception);
  • It was a tale of East and West, with former rising while latter fell significantly;
  • Russia overtaking the UK as Europe’s second biggest cinema market is big news;
  • There is a major question about ‘secular decline’.

So what is new about this data and what more can it teach us?

First Quarter Data Is Pointless

EAO makes much of the fact that Q1 of 2014 is an improvement on the first quarter of the year before.

Provisional Q1 figures from 11 EU markets indicate that admissions in the European Union increased in the first three months of this year, compared to Q1 2013. Quarterly admissions increased significantly in 3 out of the 5 big EU markets, namely in France (+18.9%), Italy (+13%) and Spain (+8.7%), outweighing smaller decreases in Germany and the UK. On a cumulative basis admissions in these five markets increased by 5.6%. As these markets represent around 75% of total EU admissions, it can be assumed that total EU admissions increased in the first quarter. This would also be backed up by data from six additional EU Member States which registered a growth in cinema attendance, including the Netherlands (+4.8%), Sweden (+17.9%), Greece (+8.9%) or Slowakia (+49.5%).

This is true but also largely irrelevant. Coming off a disastrous 2013, it would be shocking if this quarter saw even more steep decline. Oscar-contending films and The Lego Movie attracted customers but tell us nothing about the year as a whole will be an improvement on 2013 or not.

Read More »