Thousands of Chinese Cinemas Could Close Permanently (Report)

A reopening of mainland Chinese cinemas may shortly become reality, but for some operators, that moment could come too late as the prospect of bankruptcy looms.

A new survey from industry body, the China Film Association, published by the South China Morning Post, suggests that 40% of cinemas could permanently shut down as a result of the prolonged closure. Movie theaters have remained dark in China longer than any other country — it is now 130 days since they were ordered shut on Jan. 23.

At the end of 2019 there were 69,800 cinema screens in operation, according to official state media. They were located at some 12,400 complexes. A 40% closure could therefore mean the loss of 5,000 venues and 27,920 screens.

Those figures tally with data previously disclosed by Asian cinema investment and industry research consultant Artisan Gateway. “China suffered the permanent closure of at least 2,300 cinemas through the first two months of the COVID-19 industry shutdown. This equals a loss of 12,000 screens, nearly 20% of China’s theatrical release capacity,” Artisan Gateway chief Rance Pow told Variety in April.

Officially, China has now paved the way for cinemas to reopen. On May 8, China’s cabinet, the State Council, said that “cinemas, theaters, recreation halls and other enclosed entertainment and leisure venues may hold all types of necessary meetings and exhibition activities.” But there appears to be little movement to make that happen.

The Center for Disease Control and Prevention last month said that cinemas in regions with low risks can reopen, by appointment, and with reduced capacity and daily disinfecting measures for theaters, seats and 3D glasses. It recommended that audiences only attend with family members. It warned that cinemas in areas with medium to high risk should remain closed.

But operators also need permission from provincial or city authorities to do so. These were expected to wait until the end of the so-called ‘Two Sessions’ meeting of China’s parliament. That wrapped up its business at the end of last week, but health and safety fears linger. China’s capital, Beijing, has not yet fully emerged from its lockdown and the country has seen new clusters of COVID-19 emerge in different regions.

Online ticket sites such as Alibaba’s Taopiaopiao and rival Maoyan currently show no forward release schedule across any part of the country.

The China Film Association estimated that if cinemas were to reopen this month, revenue could build back to normal levels after six months. That would mean a year-on-year fall in box office of 66% from last year’s RMB64.3 billion ($9.01 billion, at current exchange rates) to RMB21.8 billion ($3.05 billion). However, a reopening that is delayed to October would cut 2020 revenues by 91%, down to just RMB5.79 billion ($810 million), according to the CFA.

Those numbers are even worse than the stark figures published in late April by the National Film Administration, the government body that oversees the industry. Then, the NFA warned that box office revenue could suffer a RMB30 billion ($4.2 billion) drop.

In previous years, the NFA has set a target for the country to have 80,000 cinema screens in commercial operation, serving its population of 1.4 billion. The body has yet to say whether that goal will be revised, or by how much.


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