Chinese cinemas fret over muted reopening

Chinese cinema operators have said restrictions to prevent the spread Covid-19 as the industry reopens after six months of closure and heavy losses mean they will struggle to survive.

Movie theatres reported Rmb3.3m ($472,200) in box office takings on Monday following Beijing’s announcement last week that the industry, could reopen in “low risk” areas. China’s cinemas earned an average of Rmb174m a day last year, according to Wind, a financial data provider.

Cinemas that have reopened have done so with limited seating, a ban on food and drinks, and a shortage of new releases. Audiences and staff must wear masks, and are subject to temperature checks. Operators say the rules have crippled cinemas even as the government has allowed the industry to reopen.

“The worst days are not over,” said Cheng Hang, owner of Brilliance Cinema in Hangzhou. “We can’t run a normal business with no blockbuster and more than half the seats unavailable.” 

China Film Administration, the industry regulator, said last week that film-goers must sit at least one seat apart, leaving occupancy rates at or below 30 per cent for many theatres. CFA has asked the number of daily showings to be cut in half and that films be no more than two hours long.

Mr Cheng said the measures meant he would make up to roughly Rmb1,000 in revenue a day, less than half of what he needed to break even. “The government has given us the green light to reopen,” he added, “but it hasn’t created a favourable condition that allows us to make ends meet.” 

The global cinema industry has been hit hard by pandemic lockdowns as venues were forced to close. AMC Entertainment, the world’s biggest chain, was forced to tap capital markets for $500m early in the pandemic, while Cineworld of the UK has backed out of a $2.3bn deal to buy Canadian rival Cineplex.

China is the world’s second-largest cinema market, with box office takings rising to Rmb63.6bn last year, up from Rmb5.4bn a decade ago. The country had 12,408 cinemas as of last year and local media reports show between 25 and 75 per cent of theatres were open on Monday.

The local industry is dominated by a few large players with Wanda Film accounting for 13 per cent of the market last year. This month the group said its business had been badly hit in the pandemic and would fall to a loss in the first six months of the year.

One major stumbling block to attracting cinemagoers on reopening is a lack of new releases.

Film studios in China and overseas have slowed or suspended production because of the pandemic. That leaves a small number of new movies, mostly completed last year, available for screening.

Of the 23 films screened by Chinese cinemas on Monday, 22 had aired before, according to movie ticketing service Maoyan.

In the eastern city of Wuxi, Qian Jiayin, a college student, was not put off by the restrictions or dearth of new releases. “The sound effect at cinemas can’t be matched at home,” said Ms Qian, after watching the thriller Sheep Without a Shepherd, at a local cinema on Monday morning.

Lucy Gu, a Shanghai-based office worker, on the other hand, left her local cinema after discovering all the films were old.

“I only want to watch new movies,” she said.