Category Archives: Countries

China Cinema Digest – Thursday 22 January 2015

Wanda Cinema Line Logo

Sina Finance highlights three pertinent questions about Wanda Cinemas raised during the ‘road show’ ahead of the company’s IPO.

Concerned about the point two: how to face the the new media shocks?

In the conference, another concern is that the new media development, Wanda Cinema traditional marketing model of how to face the competition…

In this regard, Zeng-Mao also said that at present the company a single month counter ticketing and network ticketing of the proportion of month 6: 4, 2013 box office income share 76.74%, network sales at present in a single month accounting for about 40%, network sales accounting for showed a gradual upward trend, company there are Wanda movie network, Wanda movie APP such as its own electronic channels, at the same time also, and domestic professional network of ticketing website cooperation.

At present, Wanda Cinema uses a “cinema system” model of development, Ye Ning said Wanda Cinema business uses a pure asset coupling mode, is currently well-known theaters in only one using the model of the company.  LINK

China cinema box office split

On the occasion of Wanda Cinema’s IPO a good in-depth overview of how the cinema market works in China and Wanda’s role, down to specifics of revenue split and tax, is provided by Win Business Network . Several pages long, but worth reading in full.

Cinemas implement licensing system, the relevant policies and regulations, 15 or more in assets and the distribution for the film in theaters as a link to the different provincial regions, provinces can set up a cinema company. As of the end of 2013 there were 45 theaters license.

Unity in accordance with their respective cinema theater company plans to row reflect the showing of the film.

American film industry chain is the core part of the copyright, movie box office revenues accounted for 30% of the film side (producers and issuers) income is less than, in addition to creating revenue through digital television, Internet video, brand licensing, and other aspects of overseas exports . Because domestic copyright, among other factors, led to 85% of the producers are the cinema box office revenue contribution.  LINK

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Cinema in China Is Still Headed for Crash – Five Trends Show Why

Taking of Tiger Mountain

With Wanda Cinema’s IPO imminent we thought it would be a good to revisit the article ‘China’s Multiplexes Are Headed For a Crash – Statistics Show Why‘ that we published last April. With another year of strong box office growth in China and no large scale cinemas going bust in the Mainland, were we wrong?

At the time we wrote that “It is too early to say whether Chinese cinema exhibitors are in for a hard crash or a soft landing, but a correction is now becoming overdue.” It increasingly seems like 2015 will be the year that the correction is due, with several troubling indicators making themselves felt.

We will not re-hash the arguments from the original article, which remain valid, so we urge anyone not familiar with it to read it first. We will instead look at some new factors that we did not highlight back then.

It is also worth noting that at the time overall growth in China was slipping below 8% and now it has fallen even more. For the third year running China has missed its export target and as the FT reports,

The missed target comes as China prepares to release annual gross domestic product figures next week that will show growth in the world’s largest economy (in purchasing power terms) came in below the government’s annual target for the first time since 1998.

This is the macroeconomic picture to keep in the back of the mind when discussing the cinema market in China.

In broad strokes, the five trends can be summarised as follows:

  1. Mistaken belief in a demographic cinema dividend;
  2. Unsustainable price-war in micro-blog ticket services;
  3. Inability of Hollywood films to fill a post-quota gap;
  4. Failure of Chinese film production due to censorship;
  5. A ‘hidden’ decline in the growth rate of the box office.

1 – The demographic cinema dividend fallacy

Wanda Cinema is very confidant about the future growth of the China cinema market, as stated in its IPO document, which begins with the bold claim “The company’s main business is the cinema industry, [and] the [cinema] industry has always come out on top”:

Our cinema industry in the future continue to benefit from the rapid growth of the film industry

In recent years, China’s film market continues to maintain a rapid development momentum, the movie industry revenue is expected to usher in the 2015-2016 phase of explosive growth. We believe that our large population, the urban population has a number of screens compared with Europe and other developed countries, a big gap under the background of the geographical distribution of the theater, the per capita number of screens there is a large room for improvement, the cinema industry will continue to maintain a high level of development.

This is a refrain often heard in discussions about Chinese cinema: that the country is under-screened compared to markets in Europe or that cinema attendance is low compared to that in the US. As the market matures it will continue to grow, is the belief.

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China Cinema Digest – Friday 9 January 2015

away with bullets

China’s State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) has taken note of the danger to the cinema experience if films are shown in poor conditions, such as insufficient brightness (particularly for 3D) and poor audio. It has therefor put cinemas in notice, as well as giving audiences a way to complain (call Tel: 010-82024005 13901121804). If only other countries film and cinema bodies (France’s CST notwithstanding) were as forward looking. The first paragraph ought to be gold plated.

Bulletin

[If] film screenings technical quality can not be effectively guaranteed, it will harm the legitimate interests of moviegoers and film copyright holders, and film digitization has brought technological achievements do not match the long run, is not conducive to the sustainable development of the film industry, and will lead to the theater in market lost credibility. In order to further improve the quality of film screenings, are hereby notified of the following matters:

First, the film shows the vitality of the quality of films, the movie business is a concrete manifestation of good faith, must lead to radio and television departments at all levels and industry associations, cinema, cinemas highly valued, not for any reason reduce film screening criteria.

Second, each company must immediately cinema this notice will be forwarded to the respective theater, and the organization of specialized personnel to show the quality of the census, for the existence of film screenings quality is not up to the standard of the phenomenon must be promptly corrected. Each theater should seriously organize self, responsibility to the people, for the presence of screening quality problems, to identify the reasons for immediate rectification.  LINK

Wanda Group

Photo credit: Caixin Online

Are the wheels starting to come off the Wanda bandwagon even before the cinema IPO? In an article titled ‘Hong Kong-Listed Wanda No Longer Boy Wonder’ by Beijing-based Caixin Online it is pointed out that the Dalian Wanda Commercial Property IPO was expected to raise USD $5 billion to $6 billion but only $3.71 billion. Yet it is the anecdotal evidence that indicates that all is not well with the cinema portfolio either:

A recent business trip experience for a Hong Kong investment banker, who chose not to be named, highlights oft-heard concerns about Wanda’s future. The banker traveled to a Wanda resort in the seaside city of Sanya, in the island province of Hainan, with plans to stay three nights.

But the banker checked out after just one night at the Wanda Culture Center at Haitang Bay because, he said, the place was as lonely as a ghost town. Moreover, he said, in Sanya he saw an upscale, Wanda-owned movie theater that seemed much too remote to draw cinema-goers.

“It’s hard to imagine movie-goers going there because taxi drivers refuse to take you unless you pay a higher fare,” he said.  LINK

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Cinépolis Acquisition of Chile’s Cine Hoyts Signals Global Ambition

Cine Hoyts Chile Cinepolis

Mexican-based exhibitor major Cinépolis has acquired Chile’s largest cinema chain Cine Hoyts. The acquisition, reported in this article in El Financiero, means that Cinépolis is now present in 11-12 countries around the world. It also signals an intention to take on Wanda/AMC for the crown of the world’s largest cinema chain through further acquisitions and in-organic growth.

The deal, which has not been confirmed officially and with no price being revealed, gives Cinépolis Cine Hoyts’ 40% market share in Chile, with 96 screen in nine multiplexes across the Metropolitan Region and Region V. Cine Hoyts Group, which was owned by Chilefilms, which acquired it from Australia’s Hoyts in 2011, has 700 employees and includes 13 3D type four Premium Class and Vip screens, with Dolby installed in most other sites.

As the article points out, the deal gives Cinépolis a major international presence:

Until early December 2014, Cinepolis had a total of 401 multiplexes in 95 cities in Mexico and in 10 additional countries where it operates. Its 3,485 screens are 100 per cent digital, 13 IMAX, 71 XE Macro XE and 304DX totalling 635,430 seats.

With over 40 years experience and fourth worldwide among exhibition chains (the largest outside the United States), Cinepolis has a presence in countries like Costa Rica, El Salvador, Guatemala, Honduras, Panama, Colombia, Peru, Brazil, India and the United States.

In the middle of last year, Alejandro Ramirez told El Financiero that the firm moved into buying a cinema chain in Brazil.

In late 2014 Cinépolis completed the acquisition of Fun Cinema in India, giving it almost 200 screens in the growing territory, though it did not end up buying the larger Big Cinemas chain.

In 2015 Cinépolis plans to open more than 200 screens in Mexico, taking it to over 3,000 screens in its home territory.

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Was CineAsia Right to Honour Indonesia’s Cinema 21?

IMG_20141211_153736

Should success at any price be celebrated? Because when it comes to cinema in Indonesia it is hard to escape accusations that ‘success’ is linked to unsavory business practices, tax evasion, rent seeking, crony capitalism and corporations tainted by links to the world’s most corrupt dictatorship.  At least according to most of the resources we could find during our research for this post.

Last week the CineAsia 2014 “Distributor of the Year” award was handed out to Indonesian film distribution company Cinema 21 Group. The award was introduced and handed over by Imax’s Andrew Cripps and received by the company’s Founder and Chairman Benny Suherman, as well as Harris Lasmana (Vice Chairman) and Suryo Suherman (President), and Sacheen Lasmana (Vice President).

The original press release published in FJI announced the award’s recipient with the headline ‘CineAsia to salute Indonesian distributor Cinema 21′ stated:

“Cinema 21’s progressive and amazing growth over the past couple of decades has made them the leading distributor and cinema exhibitor in Indonesia,” stated Robert Sunshine, co-managing director of CineAsia.

Cinema 21 Group started as a film distribution company in 1969, and since 1991 has been the distributor for all major Hollywood films in Indonesia. In 1977, the group expanded into the cinema exhibition business, making Cinema 21 the largest cinema chain in Indonesia.

So what’s wrong with celebrating success? When that ‘success’ is built on a nepotistic monopoly, links to a late genocidal dictator and involved an embezzler and fugitive wanted by Interpol, then the definition of “success” starts to become strained.

The timing of this award might also be seen as poor, coming as it does a year after the success of multi-award winning documentary “The Act of Killing” and just after Indonesia got its first president without ties to its brutal political past.  Our research into Indonesia’s motion picture exhibition took us back in time to Cinema 21′s early days.

Benny, Bambang and Sudwikatmono

Cinema 21 was indeed set up 1969, but the press release offers just the most cursory and airbrushed corporate history version of the Cinema 21 organisation.

The founders were Benny Suherman and his brother Bambang Sutrisno together with Sudwikatmono, the cousin of then President Suharto who had seized power in a military coup four years earlier. We wondered why Bambang or Sudwikatmono weren’t mentioned or honoured as the founders of Cinema 21?

Could it be because Bambang fled Indonesia and is now wanted by Interpol? Bambang Sutrisno embezzled Rp1.5 trillion [USD $128 million] from Bank Surya for which he was convicted of in absentia in 1999 and sentenced to life imprisonment. He fled to neighbouring Singapore where he is safely hiding with little fear of extradition.

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Swedish Subtitling of Swedish Films Causes Controversy

Turist Force Majeure

Also available in Swedish in Sweden

From today all Swedish film screened by Sweden’s largest cinema chain SF Bio will be subtitled in Swedish. Yes, all.

While foreign films have always been subtitled rather than dubbed in Sweden (except animation for children), the decision to introduce same-language subtitling for ALL screenings of ALL films has caused controversy in the country that prides itself on being progressive in film matters.

While the move is aimed to improve access for those with hearing problems, the decision has not been universally well received.

This is the message on the homepage of SF Bio:

News! As of December 19 SF Bio will also be showing all Swedish films with Swedish subtitles. This is to facilitate for all those who have difficulty understanding what is said in the films.

In Sweden there are over 1 million people who have some form of hearing loss. For these people, it has been difficult to go to watch Swedish films when they had trouble hearing the dialogue, and it has been confined to a few screenings with Swedish subtitles. Now we want to improve accessibility for all and will henceforth show all Swedish films with Swedish subtitles.

Movies with foreign dialogue is subtitled almost without exception in Swedish, but for those who have difficulty understanding the dialogue on Swedish films are also shown some films with Swedish dialogue also with Swedish subtitles. The range of subtitled movies for various reasons been limited, but a selection of films are produced with Swedish subtitles.

The switch to all-subtitling was supposed to have taken place on 5 December, but got postponed for two weeks for ‘logistic’ reasons, as explained in the Swedish newspaper for the deaf community.

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Number of New Cinemas in China is Up – But so is Box-office Fraud

China box office fraud

Last week saw the publication of two reports, both of which pointed to upward trends in the Chinese exhibition industry. But while the first pointed to a growth in the number of new screens, the second pointed to an increase in the instances of box office fraud.

report by Yi En Consulting has shown that as of 30 November, the total number of cinemas and multiplexes in China amounted to 5,540 with a total of 23,349 screens. This has led to a lot of end-of-year analysis and prognostication, coming as it does also close to the re-filing of the Wanda Cinemas IPO prospectus.

The number of new cinemas in Mainland China doubled in January-November 2014 to 957 compared to 476 in the same period last year. Beijing Daily looks at the key players (Wanda, Poly, Bono, etc.) and the dynamics shaping this market, where more players are looking to follow Wanda’s IPO lead.

Beijing Daily reporter learned that this year, in addition to already listed Wanda Cinema, the other cinema companies are also in preparation or wait listed. The first is the original plan and Wanda Cinema accept China Securities Regulatory Commission reviewed the same day in Guangzhou Jinyi Film and Television Media Co., Ltd., but the presence of a false prospectus of the eligibility conditions have been canceled. At the same time, the industry ranked second in the Shanghai Film Co., previously disclosed on April 18 prospectus, to be listed on the Shanghai Stock Exchange, while China Film Corp. also announced June 16 the prospectus, and most raised Uses of funds are investment projects cinema. In addition, the industry said, ranked fourth in the Guangdong market, the earth also has the listing.

The role of 3D and Imax/PLF (premium large format) films has also been significant in 2014.

According to public information, as of the end of October this year, the country released 52 million at the box office over the movie, 26 movie for 3D movie, half of the total box office revenue, 3D movies have occupied half of China’s film market. With such a huge market demand, the theater in order to attract customers have increased construction of 3D auditoriums. A film industry insider talking to Beijing Daily, told reporters: “Look at the Beijing movie theaters, an average ticket 2D movie ticket is 50 yuan, and a 3D movie ticket fares usually more than 100 yuan, the theater in order to the difference will be considered to improve the middle by large screen IMAX auditorium box office. ”  LINK

In the second article, turning its attention to the future, the focus is on the growth in the Tier Two and Tier Four cities.

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Sony Hackers Crossed A Line By Threatening Movie Theatres

The Interview Premiere

Though most of the entertainment industry and business world has been riveted to every breaking development of the Sony Pictures hack, we have purposely refrained from writing anything about it. That was until the perpetrators of the cybercrime threatened movie theatres showing an upcoming Sony film release with terrorist acts.

Yesterday morning, in what has become an almost daily ritual since news of the Sony hack first surfaced the group taking responsibility for the cyber attack, who call themselves the Guardians of Peace, sent an email which threatened:

“We will clearly show it to you at the very time and places “The Interview” be shown, including the premiere, how bitter fate those who seek fun in terror should be doomed to.”

The email went on to state that “The world will be full of fear” and referenced the 9/11 terrorist attacks in New York and Washington D.C. It suggested, in no uncertain terms, that moviegoers should stay away from movie theatres screening “The Interview” and those that live near such cinemas should evacuate their homes. No specific reason was given, however since the hack against Sony Pictures first occurred it has been widely speculated that North Korea might be responsible for the attack in retaliation for “The Interview”, a film Sony had scheduled to open Christmas day. The comedy featuring Seth Rogen and James Franco centers around a plan to assassinate North Korean leader Kim Jong-un.

As a media outlet focused on the motion picture exhibition and distribution industries we were among those who received the hacker’s daily emails. Over the past few weeks we could have used this site to dissect the notes of countless DCI meetings from the past ten years or even highlight the terms of Sony’s various virtual print fee (VPF) agreements, details of which were contained in the staggered distribution of Sony’s data. However, there is a reason such information was meant to be kept confidential and its publication serves no greater public need. As well, the commercial matters being discussed within such documents is ancient history and any interest in them would be purely academic at best. That our silence came with the advantage of not publicizing the hackers or their crime was an added bonus.

But when the perpetrators took aim at the general public, threatening innocent people in a venue this particular media outlet considers a place of secular worship, they crossed a line that even the most malicious hackers know to avoid. Virtual thievery in the anonymity of cyberspace gives victims the false sense they are not in direct danger of physical harm. Threatening terrorist acts upon specific people or places in a world still smarting from an endless string of such events panics a public with feelings of immediate personal danger. That’s what makes such threats so affective and why the Sony hackers’ intimidation of movie theatres is far more damaging than any of the data they leaked.

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China Cinema Digest – Wednesday 17 December 2014

Imax China 200 screens

Imax has crossed 200 screens in Mainland China following the latest deal announced with Wanda Cinemas.

IMAX and Wanda Cinema, announced today that the company, along with Wanda Plaza is located in Hangzhou Gongshu Wanda IMAX theater opened, IMAX theater in China’s total reached 200. Wanda Cinema is one of the first partners to IMAX theaters in China. Currently, Wanda Cinema has become the company’s largest IMAX cinema partners in the international market, the commitment to build a total of 210 IMAX theaters.

In 2001, China’s first IMAX theater opened in Shanghai Science and Education, which marks the formal entry into the Chinese market IMAX Corporation. In 2004, IMAX company opened its first commercial IMAX theater in China. At present, China has become the world’s second largest IMAX market, a total of more than 400 IMAX commercial theaters, 179 of which have been opened. After all screens installed, IMAX theater network will cover commercial 122 cities in 30 provinces of China.  LINK

Luxe RealD
RealD announced at CineAsia a three-screen deal with Broadway Cinema for its Luxe PLF brand. This is the first deal in China and heats up the competition with Imax, China Giant Screen and own-brand PLF operations.

Global 3D and visual technology company RealD Inc. (NYSE: RLD) and leading Hong Kong and Chinese theatrical exhibitor Broadway Circuit announced today an agreement to install 3 “LUXE: A RealD Experience” (LUXE) auditoriums in Broadway’s cinema locations in mainland China. Introduced by RealD in 2013 as a new Premium Large Format (PLF) initiative, LUXE auditoriums will be installed at Broadway locations in Tianjing, Chengdu and Guangzhou, with the Tianjin location expected to open in May 2015. All 3 LUXE auditoriums opened at Broadway locations will feature RealD 3D projection and a RealD Precision White Screen.

“As a leading circuit in the rapidly growing and highly competitive China market, we have been looking for the best possible cinema setting for our moviegoers,” said Tessa Lau, CEO of Broadway Circuit. “We find LUXE a perfect match. We see it as an initiative to define our 2D and 3D premium offering. We are pleased to partner with RealD to jointly provide our audiences a unique, fully immersive experience.”  LINK

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China Cinema Digest – Thursday 4 December 2014

Wang Jianlin, founder of Dalian Wanda group, Credit CHINATOPIX, via Associated Press

Wang Jianlin, founder of Dalian Wanda group, Credit CHINATOPIX, via AP

Wanda Cinemas has been given the OK for an IPO in China in its second attempt. So much for all of our conspiracy theories that it would list elsewhere.

Wanda Cinema Line Co. Ltd., a movie theater company controlled by Chinese real estate mogul Wang Jianlin, has received approval for a share-offering in China in which it hopes to raise up to 2 billion yuan (US$325.6 million).

The listing approval was announced late Friday by China Securities Regulatory Commission. It comes as Wang, who Forbes magazine says is China’s fourth-richest man, prepares a huge initial public offering in Hong Kong for his real estate unit, Dalian Wanda Commercial Properties Co (IPO-DWC.SS).

The two listings, expected to be completed before the end of the year, would raise capital to accelerate Wang’s expansion in property and entertainment.  LINK

The NYT has a good thumbnail sketch of Wanda’s Chairman Wang Jianlin, who does not sit on the board of any of the soon-to-be-four listed companies that he controls.

Investors in Chinese companies are accustomed to founders having controlling stakes and wielding enormous power. But Mr. Wang has no official role in Wanda’s commercial property division, which is planning to list a minority stake in Hong Kong, or in the upcoming offering of its mainland Chinese cinema business. He is also absent from the American theater chain AMC Entertainment, which Wanda bought in 2012 and refloated a year later, and from its Hong Kong-listed hotel unit.

Wanda executives hold various board seats, including the chairman’s role at all four companies. Yet the tycoon’s lack of direct involvement is unusual.  LINK

Vista Group

Vista has completed a major roll-out with one of China’s largest cinema chains – in record time.

Cinema software company, Vista Entertainment Solutions has finished what they describe as one of the hardest projects the company has undertaken, rolling out 230 cinema sites across China in just six weeks.

Vista chief executive Murray Holdaway said the project, which involved total travel time of 2,376 hours had gone extremely smoothly and he was proud to have set a new “global benchmark”.

“To embark on a project of this scale within such a short time frame was something that as far as we know, has not been achieved before in our industry, and I’m delighted that our teams – Vista people assisted by Dadi people – have executed so brilliantly. They have re-set the global benchmark for the speed at which installation projects such as this can be carried out and we are proud of them,” Holdaway said.  LINK

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