It is exactly two years since China closed all of its cinemas as part of its effort to stop the spread of the new Coronavirus that had originated in Wuhan. The closures on the eve of the all-important Spring Holiday (a.k.a. Chinese/Lunar New Year), when the biggest local blockbusters are released (and Hollywood films locked out) was a shock. Soon there was outrage as some of the biggest Chinese films went direct to streaming, while Chinese cinema operators struggled with unpaid salaries, overdue rent and unsold popcorn. Sounds familiar? The rest of the world did not take enough notice that 1/3 of all global cinema screens were suddenly dark.
Today China is the world’s biggest cinema market, not just by screen count but by box office. Since the initial closures, China has managed to keep its cinemas mostly open, even as it pursues its ‘Zero Covid’ policy. What has happened during the past two years is what could be called The Great Decoupling From Hollywood. Initially there were no new Hollywood films to be shown, so the country had to rely on domestic hits (“The Eight Hundred”). Later the country turned its back on big Hollywood tentpole titles (Marvel’s “Eternals” and “Shang-Chi”) and arbitrarily allowed some releases (“Dune”, “No Time to Die” and “Death on the Nile”) but not others. As Bloomberg noted in the headline of its article from September last year, “China’s Box Office Becomes a Giant Headache for Hollywood.”
This decoupling is not accidental. The 14th Five Year Plan spelled out that China should not only have over 100,000 cinema screens by 2025, but also be “a strong film power” by 2035. A look at the ComScore 23 January weekend chart shows Chinese films occupying the 5th, 7th and 10th spot – and that was before the Spring Festival releases. China now also has domestic Cinema LED technology that is DCI approved, so it is no longer dependent on foreign suppliers for new and old screens. Lastly Wanda has sold its stake in AMC and is focusing on the domestic market. The tone of Chinese films is increasingly becoming patriotic/nationalistic, from “Wolf Warrior 2” to the two “Battle of Lake Changji” films. China remains a big market and opportunity, not least for premium cinema providers (IMAX and Dolby – read about Dolby Cinema below), but one that is increasingly difficult for outsiders to navigate.
This is why it is more important than ever for Hollywood and the global cinema industry to engage with China. Celluloid Junkie will devote its 17 February CJ Cinema Summit to the vast topic of China and continue our in-depth coverage of the world’s biggest cinema market. This would not be possible without our sponsor Dolby and others, so if you want to stay informed then please help us continue to do our job by clicking the sponsor’s link below. It really makes a difference.
Box Office
China Ticket Prices Rise Ahead of Spring Festival
Cinema ticket prices have increased ahead of the all-important Spring Festival (Chinese/Lunar New Year) period. While cinemas in China largely remained open for the past two years, the overall cinema market remains depressed compared to before the pandemic. There is also no more subsidy of tickets, compared to years earlier, when online ticketing platform were competing with special CNY 9.9 (USD $1.56) promotional offers.
Estimates are that the average cinema ticket price this Spring Festival will be CNY 56.66 (USD $8.95), up from CNY 48.9 (USD $7.73) in 2021 and CNY 44.7 (USD $7.06) in 2019 during the same period (cinemas in China closed over Spring Festival 2020 due to the COVID-19 outbreak). At the same time there is a worry that there will not be a significantly large blockbuster over the holiday period to help lift the market, with the largest hopes pinned on “The Battle at Lake Changjin 2: Water Gate Bridge,” a sequel to last year’s film that became the biggest Chinese film of all time. Tickets for this are selling for up to CNY 82.3 (USD $13.00), with cinemas having embraced dynamic and ‘surge’ pricing.
Overall ticket prices have increased by 29% in the last six years in movie theatres in China’s tier-three cities, where most of the market’s growth has recently taken place, compared to 21% in large cities such as Beijing and Shanghai. However, the price rise is seen as being in line with overall GDP and consumer price index (CPI) growth of the country. The number of cinemas in operation across China was 9,979 on 18 January and the operating rate of theaters nationwide was 92.2%. According to CICC’s forecast, under conservative/neutral/optimistic scenarios, the 2022 Spring Festival box office including service fees will be CNY 5.78 billion/CNY 6.96 billion/CNY 8.40 billion (USD $910 million/$1.1 billion/$1.33 billion), with year-on-year growth rates of -26.3%/-11.3%/+7.1%, respectively.
Source: Caixin
Advertising
UK Cinema Advertising Bounces Back Strongly
Cinema advertising in the United Kingdom is set to return close to pre-pandemic levels this year, with a return of the crucial 16-34-year-old demographic returning to the big screen thanks to the likes of Bond and Spider-Man. Advertising on the big screen is expected to hit 95% of its record 2019 levels in Q1 2022 alone, according to Karen Stacey, CEO of Digital Cinema Media (DCM) and significantly almost every major brand has returned to the cinema.
Cinema has been one of the few non-Internet advertising mediums that has been growing in recent years, with ad spend down in traditional print and linear television. Yet in 2020 it was the most negatively impacted ad channel, losing 80% of its revenue as cinemas closed in the UK. The shortening of the release window is not expected to impact the medium, with Pearl & Dean CEO Kathryn Jacobs pointing out that “cinema is a planned event and ultimately a shared experience,” for which satisfaction scores are higher than television (44% compared to 27%) according to Audience Measurement and Evaluation (FAME) data.
Changes predicted for the UK cinema advertising market include “longer-form ads, more upfront deals and ads catering toward the younger demo.” This has led to the creation of the in-house branded content division DCM Studios Presents that works on bespoke projects with clients. Odeon is also revamping its marketing strategy with the appointment of communications agency Elvis, with an aim of tapping into audiences “craving shared experiences, escapism, adventure and excitement.”
Source: The Drum
Cinemas
Cinemas Reopen In The Netherlands
The Netherlands became the last major European territory to reopen its cinemas on Wednesday 26 January. The Dutch government lifted restrictions that had seen cinemas in The Netherlands closed since 19 December last year. There had been growing criticism of the closures from the culture and hospitality sectors, not least since non-essential shops reopened on 15 January. However, there have been suggestions that the government may re-impose closures if the COVID-19 situation worsens.
Re-opened cinemas will still face several restrictions, including customers having to show a COVID pass, distancing of 1.5 meters between individuals or groups and all tickets need to be pre-booked. The cinemas will also have to close at 10 pm (22:00) every day. There was an earlier proposal that 8 pm (20:00) should be the closing time, but Boris van der Ham, chairman of cinema trade body NVBF, said that this “would in fact be the same as a lockdown.”
The Netherlands follows Latvia, Austria and Denmark out of the latest round of cinema lockdowns, with the Belgian government being forced to reverse its decision to shutter cinemas and theatres after a court challenge. However, on the same day as the Dutch reopening, cinemas will be closing in five regions of Finland, while severe restrictions are in place in markets such as Germany. Meanwhile “Spider-Man: No Way Home” had the biggest box office opening weekend of any film in Norway since 2015, after the release of the film was postponed for five weeks.
Source: Holland Film Nieuws
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Celluloid Junkie is the leading online resource dedicated to the global film and cinema business. The Marquee is our newsletter focused on motion picture exhibition; keeping industry professionals informed of important news, the latest trends and insightful analysis