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“China Overtakes US In Screens But Cinemas Sit Empty.”(1)
Mar 14, 2017

“China overtakes US in screens but cinemas sit empty.”

In recent years more and more moviegoers appeared with china ciemas hall are increasingly being built now and in the days to come. Does it mean a golden age for china cinemas sectors or there are just bubbles.

In one of the most syndicated articles on the business of cinema in China in recent times, Associated Press slams the last few year’s cinema bubble hype with the headline “China overtakes US in screens but cinemas sit empty. It is not a pretty picture, with clear signs that “something’s amiss with China’s non-stop building of cinemas.” China might be under-screened in absolute numbers, but weakness of cinema outside of Tier I and II cities (where people prefer watching films on TV or online for free), means that analysts are forced to cling to the belief that non-urbanites will somehow suddenly develop cinema going habits.

China’s third and fourth-tier cities added 3,664 new screens last year, accounting for 38% of the country’s total, and the total number of the third and fourth-tier screens has surpassed 40% of the country’s total. And these cities contributed to the box office, which has been stagnant in the past two years, about three percent of the country total.

So don’t be fooled by the mantra “China is under screened,” because outside the major cities the box office contribution uplift will be negligible.

So will this year be better than last year? Financial website 36KR does not think so. “2016 was difficult; 2017 will only be more difficult,” it starts off its article with. “2017 movie box office has a great probability to continue the 2016 downturn,” because of planning for this year was done when the market was still growing at breakneck speed. This spells trouble for film producers  Bona, Huayi and Enlight, with Bona alone launching 12-15 movies this year. If there is a winner this year it may be Alibaba Pictures, which has invested in all three companies.

So with cinemas doing badly, where will this lead? “Cinema Integration tide has arrived, a large number of theaters will face closure or consolidation, it is inevitable,” says Beijing University Cultural Industry Research Institute’s Chen Shaofeng. He is one of the few who saw the crash of 2016 coming. “I predicted four years ago that China’s box office, when it reached 35 billion yuan it will enter the medium and low-speed growth phase.” Artificial subsidies (“water injection”) is what made the box office more inflated than it was. But the building on new cinemas has not stopped, meaning the there is even less profitability on the horizon. “The crux of the matter is that the speed of cinema building has been out of control, and the film slate itself is lacklustre,” the article warns. Worth reading in full for an accurate appraisal of the situation in China. 

With China’s box office tanking, there is increased focus on new revenue streams, such as cinema advertising. Search engine major Baidu is positioning itself as enabler of improved cinema advertising as part of an overall O-2-O (online-to-offline) ecosystem. Speaking in Beijing on 10 January Baidu’s Zeng Liang said there is a great opportunity for targeting shops, restaurants and other services within a 2km radii of every cinema, particularly of they use the “Baidu brain” core technology to improve advertising.  2017 could be not easy for China cinema and cinema seats manufacturers, DC seating will continue to provide the Chinese cinema market with high qualty theater seats and cinema seats .

to be continuted