Category Archives: Countries

Digital Cinema Firm Tries to Block “Fast & Furious 7″ India Release

Fast and Furious 7

UPDATE: 4:30am IST – KSS claims that the CCI has ruled in its favour. Details at the end of the story. 

Cinema service provider KSS (K Sera Sera) has filed an injunctive petition with the Competition Commission of India (CCI) to block the release of “Fast and Furious 7″ in India, alleging ”cartelisation of distribution”.

While NBC Universal has not given a reason for its alleged refusal, it may be shying away from using KSS for a historic reason; the Vice President of Technology at KSS was previously implicated in the piracy of a major Bollywood film in his prior job.

KSS Ltd notified the Bombay Stock Exchange (BSE) yesterday (30th of March) that K Sera Sera Digital Cinema Private Limited (KKS Ltd’s wholly owned subsidiary) had filed a petition with the CCI to stay (i.e. block) the release of “Fast and Furious 7″ (called “Furious 7″ in India), which is scheduled to open in India on the 2nd of April.

KSS alleges in a press release (PDF link) that NBC Universal Media distribution has restricted the right of digital conversion of the film (i.e. encoding and distribution) to two Indian service providers; UFO Movies Media Ltd. and Real Image Media. In addition, KSS claims that its its technology is “at par” with that of UFO and Real Image, meaning there is should be no technical reason to withhold the movie from its network.

Using the kind of turn of phrase usually found in classic gangster films, KSS starts off its press statement by saying that “The release of Fast and Furious 7 (renamed as Furious 7) may encounter some brakes over distribution problems.”

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China Cinema Digest – Thursday 26 March 2015

Harbin China cinema statistics

The above infographic summarises almost everything you need to know about cinema developments in China’s Tier 2 cities, in this case Harbin in north-eastern China, perhaps best known for its annual ice sculpture festival.

The chart on the left shows the opening of new multiplexes: four in 2012, five in both 2013 and 2014 and one already this year (four more expected) for a total of 22 sites and 110 screens. The middle chart shows the average price of cinema ticket, which rose to a peak of CNY Y100 (USD $16) in 2010 but declined to just CNY Y19 (USD $3.05) last year and predicted to fall to just CNY Y10 (USD $1.60) this year. The chart on the right shows year-on-year box-office growth, 31% up in the last year, placing Harbin 24th in the ranking of China’s cinema markets.

So screens are multiplying even as ticket prices plummet, with micro-channels like Cat’s Eye and Gewara subsidise the difference to keep the box office up.

As well as publishing data looking at statistical trends over the last decade, Hailongjiang (DBW) Government Network also looks at how social norms for cinema going in terms of who goes and what their motivation have changed:

Wang Lei, general manager of Harbin’s Taylor Cinemas has worked in a number of Harbin cinemas. 10 years ago he and his team did a survey  of Harbin moviegoing crowd, to discover what type of people come to the theater to watch movies. They found it was mostly concentrated in the 22 to 30 year old age bracket, roughly equally divided between recently married and co-workers. Surveying the reasons they went to see the movie, the answer was relatively simple. Respondents were surprisingly consistent in their answer: “love”. Cinema was almost purely a dating site, with only a few parents bringing their children for holiday viewings, or units of some organization going to see some educational films.

Now you will find that the crowd that goes to cinemas has changed. There are two girls together going to see films, there are groups of boys; there are couples, husband and wife, and also children, and so on. Wang Lei said that the survey results show that in 2014, the cinema crowd is now 90% concentrated in the 18-35 age bracket, mainly student groups and working people. Compared to a decade ago the demographic has thus expanded. The purpose of watching movies has shifted from being a simple appointment, the the development of it as a recreational habit, to come specifically to the cinema for a film.  LINK

China cinema ticket machine box office

Yang Network looks at how the sale of cinema tickets through mobile commerce third party vendors has exploded in the last couple of years – predicted to account for over 60% of ticket sales in 2015. The reporter also interviews a manager from Yonghua Kunming International Cinemas about its implications. The manager seems relaxed, saying that cinema and mobile ticketing platforms “will find their own balance” over time.

Since last year, buying movie tickets online sprung up and quickly occupied the online shopping market. Original fifty or sixty yuanfor a movie ticket on Time Network, Cat’s Eye, Net Ticket, Micro-channel, Public Comment, Taobao, Baidu and other electronic business platform, the lowest price is now just 9.9 yuan. If you do not watch movies through online booking, I am afraid your friends will say that you are OUT. Why are online tickets so cheap? Is such fare normal? Recently, the Evening News reporter interviewed insiders at the Kunming Theater.  LINK

Now banks are also getting in on the action, with the likes of  China Everbright Bank, ICBC, Agricultural Bank of China and CITIC Bank all offering credit card deals for cinema tickets at “cabbage price” (which is the Chinese equivalent of “cheap as chips” in UK or “dirt cheap” in US). Yet insiders are warning about the consequences, with operators like Cat’s Eye now said to be dictating the price at which they will block buy seats from cinemas, with “no room to negotiate.”

“A cinema professional named Wang told reporters that theaters understand online ticketing is a double-edged sword. E-commerce platforms offer generous “subsidies”, but theaters are slowly starting to lose the initiative and are “handing over” their ticketing business.”  LINK

With mobile platform ticket sales already accounting for over 50% of tickets sold in some markets, some of these operators are now also negotiating with cinemas to sell popcorn and soda on their platforms.

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China Cinema Digest – Thursday 19 March 2015

China cinema ticket theft

An audacious hacking into a Shanghai cinema online ticketing system allowed thieves to allegedly siphon off almost CNY ¥1.5 million (USD $240,000).  While SARFT says that this sort of attack has never been reported before, Beijing-based security consultant Chong Yu is quoted as saying that “this kind of thing happens every day.”

According to Shanghai media reports, recently, some criminals used a Shanghai theater network ticketing system’s vulnerabilities, paying only a penny of the price, for which the face value was 140 yuan, to buy a theater ticket in the sale of the network platform, and ten sell it on other network platforms for 36 yuan, resulting in cinema ticket revenue loss of about 1.47 million yuan. Surprisingly, not only did the third-party payment platform not detect the problem, but even the theatre they stole from found strange.

Shanghai Film Distribution and Exhibition Association, who said that due to the fare billing cycle being longer, the latency network ticketing platform issues will take longer time to resolve, have referred the case to the Public Security Bureau in conjunction with site-related criminal activities lottery incidentally discovered, and got in touch with the theaters by association. The cinema ticket vendor only belatedly realized that their network was compromised, but at this stage already faced the loss of more than one million yuan.  LINK

China cinema fastfood

March 15th was World Consumer Rights Day. Several newspapers used this date to take cinema to task for not allowing customers to bring in their own food.

In early March, the reporter has twice come Juhui CGV Star Studios Hohhot Zhongshan Road and found the staff here have still not allowed to carry the audience to bring in their own takeaway food. Some viewers are not satisfied, but in order to smooth admission, had to accept to put takeaway food in storage.

The Studios executives into Lijun told reporters Studios the ban on takeaway food is “industry practice”, she has worked at Wanda and Juhui CGV theater star, and this has not broken any regulation. No matter where, loyal supporters and firm performer she affirmed this provision, for which arguing against is a waste of breath for the audience.  LINK

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Austrian Exhibitor Cineplexx Launched VoD Service

Cineplexx2go

The boundaries between cinema and video-on-demand (VoD) in Europe are blurring further, with the parent company of Austria’s Cineplexx exhibitor announcing its Cineplexx2Go VoD service.

While VoD services are already offered by exhibitors such as UK’s Curzon Cinemas (Curzon on Demand) and Landmark’s Magnolia in the US, Cinemaxx is not an exclusively art-house but a major mainstream exhibitor in Central and Eastern Europe – similar to Pathe in Holland and SF in Sweden, who have similar VoD services – though like Curzon/Landmark its parent company also has a film distribution arm. It demonstrates that exhibitors see benefits in multi-platform distribution when it can increase customer loyalty, particularly when tied to ‘super tickets’ and loyalty schemes.

Owned by distributor Constantin Film, Cineplexx (not to be confused with Germany’s independently owned Cineplex) is the largest exhibitor in Austria, as well as having cinema in Italy (in German-speaking Südtirol), Croatia, Serbia, Slovenia, Montenegro, Macedonia and Albania with a total of 280 auditoriums across 36 multiplexes and six traditional cinemas.

The Cineplexx2Go service is powered by Italy’s Chili.SpA, with over 1,300 titles available to rent or buy on launch.

Titles available include “Gone Girl”, “Guardians of the Galaxy”, “The Judge”, “Boxtrolls”, “Boyhood” and “Teenage Mutant Ninja Turtles”, with prices set at 3.99 euro (for SD version) and 5.99 euro (for HD) to rent, while download-to-own costs 15.99 euro (SD) and 18.99 euro (HD). Older titles are cheaper, with “Ghostbusters” available for 2.99/4.99 euro to rent for a 48 hour period.

The service is available on smart TVs, gaming consoles, PCs, tablets, smartphones and even Kindles. The aim is for the Cinplexx2Go library to eventually hold over 6,000 titles.

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How Endemic Is Box Office Fraud In China?

 China cinema tickets

Is China’s cinema market larger than official figures suggest, due to box office fraud siphoning off 10% or more of its total value? Having looked last week at how micro-channel subsidies are inflating box office takings, it is time to look at box office spend that is collected but never reported.

Last year’s box office in China was reported to be CNY ¥29.64 billion (USD $4.82 billion), but the actual figure is now thought to be at least CNY ¥33 billion (USD $5.30 billion), according to reports in mainstream media. The difference between the two figures is accounted for by shrinkage that occurs when a ticket is sold to a film, but the cinema or employee does not log the sale or report it to the distributor or the relevant tax collecting authorities. The cinema or employee effectively takes 100% of the proceeds in violation of the rental terms of the film.

China Film Distribution and Exhibition Association and the China Film Producers Association have jointly been issuing bulletins that highlight cinema found out and fined for using ticketing software that allows them to divert takings. In 2014 this amounted to 15 cinemas in February, 11 in May and 17 in December. Yet media commentators in China said that it may have only been the tip of the proverbial iceberg.

The then government media body SARFT [now SAPPRFT] began cracking down in ernest on the practice of fraudulent box office in 2005 with the issuing of a “Cinema Ticketing Management System Computer Software Technical Specifications,” that was aimed at ensuring accurate reporting of box office takings. This was followed in 2013 with both a ”Cinema Ticketing Management System Technical Requirements and Methods of Measurement” specification, which was then followed by an “On The Strengthening of Management Practices Movie Ticket Movie Market System Usage Notification.” Yet new cases of fraud continue to be discovered.

The central government has a strong interest in ensuring accurate box office reporting in order to collect tax on tickets sold, thus the effort to stamp out box office fraud. Yet even the introduction of multiple specifications, requirements and notifications has not eliminated the problem.

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China Cinema Digest – Thursday 12 March 2015 (Price War Special)

Micro-blog China ticket price

First Financial Daily Online looks at how it is possible that two cinema seats next to each other for the same film might cost one person 100 yuan while the other paid less than 10 yuan. Yes, it is our favourite topic of micro-channels (BAT – Baidu, Alibaba and Tencent, plus their smaller competitors) and their cut-throat cinema ticket subsidy competition, which will take up most of this week’s Digest.

An online ticketing site, told reporters that the party subsidies generally into three categories, the first category is the online ticketing website, in order to grab the market they will come up with some subsidies. The second category is the brand partners, such as some banks to promote consumer credit card and other purposes, will come up with ultra low-cost subsidy to buy movie tickets credit card. The third category is the producers took part Xuanfa own expense to online ticketing website to achieve the increase in attendance, thus promoting the theatrical piece purpose of improving the rate of discharge.

In the crazy subsidies, theater listing price of 40 to 100 yuan movie tickets have been reduced to 10 yuan level.

However, this subsidy is difficult to sustain. People familiar with the movie industry are aware of a movie ticket sales can only get 2 to 5 yuan service fee, even if previously occupied Online ticketing area 60% share in the East Guevara, they can not cover the cost of making the service ticket machines labor and operating costs, not to mention such a crazy play.  LINK

China Culture Daily draws an analogy with how 20 years ago Wal-mart and Price Club would sell DVDs for USD $4.99 that cost them $15 to buy from distributors and that this pushed video stores like Tower Record out of the business. “Later, the producers and distributors found that not only had the traditional channels collapsed, but the psychological pricing level expectations of consumers is also reduced. ” CCD also points out that in the US, online cinema tickets are not allowed to be sold below retail cinema price and only a small ‘service fee’ added on top. Good analysis showing that the Chinese industry and media are fully aware of the dangers of unfettered online cinema ticket price wars.

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Global Box Office 2014: Asia Comes to West’s Rescue

MPAA global growth

The Motion Picture Association of America (MPAA) has released its 2014 Theatrical Market Statistics report, providing an overview of global box office and trends. Overall box office grew year-on-year by just 1% but to a record USD $36.4 billion. However, the underlying trends point to a surging Asia coming to the rescue of the stagnating North American and plateauing European markets.

In 2014 box office in North America (US and Canada) was down by 5% to USD $10.4 billion, with admissions down even more by 6% to 1.27 billion. Ticket price rise was just 1% (or USD $0.04), which was below the rate of inflation, possibly abetted by 3D box office being down 2% from the previous year to 14% of the total box office. Significantly, films released by MPAA members (i.e. the big Hollywood studios) increased for the first time in five years to 136 titles, though non-MPAA films were also up.

In interesting demographic trends the proportion of tickets sold to older patrons (40-49 and 50-59 year olds) were at an all time high, while tickets bought by those 60+ year olds (13%) were the highest they’ve been since 2011. But while there is a distinct ‘greying’ of the North american cinema population, MPAA still notes that demographics remained stable for 2013 to 2014, with “12-17, 18-24 year olds and Hispanics especially continuing to oversample in tickets sold versus their proportion of the population.” However, there was a troubling collapse in movie going by the youngest demographics.

While the situation in Europe was not quite as bad, overall box office fell by 3% for the Europe, Middle East & Africa (EMEA) market as a whole. This was mainly down to a decline in major markets such as Germany (-7%) and the UK (-5%), that were not significantly enough offset by slight growth in territories such as France and growth attributable to many new screens in Eastern Europe, Turkey and the Gulf & Middle East.

Despite this slump, EMEA came out slightly ahead of North America with USD $10.6 billion versus USD $10.4 billion. This means that EMEA has outperformed or equalled the North American market for three of the last five years. With strong growth in Eastern Europe and the Middle East in the coming years, North America could see itself permanently relegated to third place in the global box office ranking in the future, though the currently weakening euro will not help.

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How Subsidies Distorted China’s “Record” February Box Office

China box office micro-channel Dragon Blade

Much has been written about how China’s cinema box office ‘overtook’ that of the United States this past February. While we have already covered how much of this is down to skewed arithmetic, often without proper context, it now seems that this “record” may require a large asterisk.

Major subsidies by mobile micro-channel ticket providers means that total box office spend over the Chinese Lunar New Year (also known as Spring Festival) period was over-stated by as much as half a billion yuan (USD $80 million), amounting to over one eighth of total earnings, thus easily wiping out the USD $10 million difference between US and Chinese box office in February.

The question of China’s total box office earnings last month hinges on whether we mean “box office” to be what people paid for their tickets or what cinemas earned from the sale of the same tickets. In most countries the two are more or less the same[1], but in China there is a significant difference due to the role played by third-party micro-channel smartphone ticketing services (the mobile e-commerce platforms commonly known as “electricity suppliers” in Chinese).

Micro-channel mobile ticketing providers such as Gewara, Cat’s Eye (Maoyan) and many others are locked in a fierce price war, offering cinema tickets for as little as CNY ¥9.90 (USD $1.58) or CNY ¥19.90 (USD $3.18), to win customers. These companies buy tickets in bulk and at a slight discount ahead of time directly from the cinemas, who thus have assurances of sold seats.  They then turn around and sell these tickets at a subsidised price to savvy smartphone-owning cinema goers. In addition to a low price, these providers offer assured seat selection and convenience.

China’s Lunar New Year season this past February was a particularly busy time for these micro-channel cinema ticket providers. On New Year’s Day Cat’s Eye sales alone reached CNY ¥100 million (USD $15.95 million), while Public Comment sold 6.5 million individual tickets. The battles on screen in this holiday’s blockbuster “Dragon Blade” were nothing compared to the war going on between the different third party ticket providers.

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China Cinema Digest – Thursday 5 March 2015

Wanda Group

Wanda Cinema’s shares have been soaring since their IPO and WinShang looks at how the company is expanding, with presence now in 80 Chinese cities.

During the reporting period, the strong momentum in the company’s development, gradually expand the scale theaters, grossing a rapid increase in the size of the company’s revenue and profits steadily rising rapidly improve profitability. As of June 30, 2014, the company has opened its own theater 150, has opened its own mapping screen 1315, the number of seats has opened more than 220,000, the company under its own theater layout has more than 80 cities across the country, the national strategy Layout is already apparent…

The company has a leading provider of data processing and customer service technology, has made ??remarkable achievements in e-commerce. As of the first half of 2014, Wanda movie network totaling 474 million page views times, access to approximately 69.04 million subscribers, about 1097 million registered members, it is important schedule online ticket sales accounted for nearly 45%. 2013, the company was the Chinese Academy “Internet Week” and the Chinese Academy of Social Sciences Information Technology Research Center as “cultural construction industry e-commerce model”, is the only national cinema company to receive this honor.  LINK

Wolf Totem

A detailed analysis of what made this year’s CNY box office so big, including which films were artistically any good (“Wolf Totem”) and how audience tastes differ in different tier cities in this long article from the People’s Daily (the official organ of the Communist Party).

When Cheng Huitao analyze why the Chinese New Year stalls at the box office a greater rise than last year, believes there are three main reasons: First, the growth in the number of theaters last year, mostly in the four-tier cities, such as Guangdong Shunde, Foshan and other places have built a high-end theater, Unlike past community theater, a new multi-screen cinema and more comfortable and quantity; viewing followed by growth in the number, but the audience is the Carnival of these new forms of viewing; again, he believes that the relatively low average movie fare, is still an important reason to raise the box office and viewing trips, “no matter how inside and outside the industry on the ticketing website, the ticket sales for the audience indeed bring benefits, for the film brought a new audience.” He also noted that high-profile New Year’s box office or can be attributed to God for the United States: Chinese New Year holiday in most parts of the country a few days the weather Qingnuan, help people go viewing.LINK

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Exageratting China’s February Box Office Victory Over the U.S.

Dragon Blade

There is an idiom in the English language that states, “Don’t take any wooden nickels”. The phrase sprang up in the United States during the early 20th-century when, during the Great Depression, banks would hand out wooden nickels which could be traded in for prizes. This was practice was designed to attract customers into banks which were seen as unreliable at the time.

The phrase, “Don’t take any wooden nickels” was usually said in parting as a warning not to be duped or cheated by someone who might want to pass off a wooden nickel as legal tender. This same aphorism could also be used to remind us of the circumspect nature required when reviewing specific news media stories, though we already have a more direct recommendation in the saying “Don’t believe everything you read”.

This is certainly true in the rash of articles and posts from media outlets far and wide reporting that motion picture theatrical box office in China during the month of February surpassed that of the United States for the first time ever. While there is no doubt this is true numerically, these news stories were designed to foreshadow the not-so-distant day when China will become the number one movie market in the world, ahead of North America, which presently holds the title. Industry pundits can’t help themselves in writing about every minute step toward this inevitability in their desire to be the first to report when it occurs.

Yet one must look a little deeper than the actual February grosses to understand whether the news is at all significant. There’s an old adage instructing us just how to examine such reports; “Read between the lines”.

For some time now media outlets, specifically trade publications, have been juggling the variables used to report on box office receipts. This leads to a form of what I like to refer to as of “selective exaggeration”. Examples are easy to spot and will usually read something along the lines of, “The debut of ‘Big Blockbuster 2′ sets a new record for the opening of a comedy featuring a talking teddy bear opposite a female lead when bowing on an even numbered Friday on an odd number of screens in November”. These new records take so many categories into account it seems one might have a better shot at a black jack table in Macau than they do of ever coming across a release with comparable attributes.

What many of the news stories about China’s box office triumph did not cover was that February is one of the months with the country’s highest movie attendance thanks to the Lunar New Year holiday. Last February Chinese box office amounted to CNY ¥3.04 billion (USD $482.6 million), compared to CNY ¥4.07 billion (USD $650 million) last month. That’s a noteworthy increase of 35%, keeping the country on track with the 36% growth seen in 2014. The first day of Lunar New Year alone set single-day ticket sales record in China, with theatres raking in CNY ¥360 million (USD $48.9 million), according to the State General Administration of Press, Publication, Radio, Film and Television (SAPPRFT) which tracks such statistics.

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