Photo:VCG

A new cluster of COVID-19 cases in Beijing has extinguished the film industry's recently rekindled hope, with cinemas in other parts of China also still vacant and on their last legs. 

Since the beginning of 2020, at least 13,170 film and television companies in China have cancelled or revoked their business registrations, according to the Security Times, citing statistics from company data platform Qichacha. That number has greatly surpassed 2019's total. 

Last legs

After new coronavirus cases were detected at wholesale market Xinfadi in Beijing's Fengtai district, authorities on Friday announced that all cinemas in the capital would remain shut. 

City officials told a press conference that cinemas, karaoke bars and other indoor entertainment venues should remain closed temporarily. 

"Even if they just mentioned Beijing, everyone knows what Beijing means to the whole industry," wrote "Dianying Piaofang" (translated as "Box Office"), a popular Chinese film blogger.

As the capital is a very important market in China's film industry, the loss of revenue in the city due to cinema closures would likely mean movies cannot be released across China. "Unlike restaurants in South China that can still serve meals even though Beijing has had a recent COVID-19 outbreak, cinemas across China - even around the world - show the same film at the same time," Yun Feiyang, a Chinese movie critic with more than 1.51 million followers on China's Twitter-like Sina Weibo, told the Global Times on Monday.

Cinemas in China were shut due to the outbreak of COVID-19 in late January, a time when big film producers expected to make a killing during the Spring Festival holidays as they had done in previous years.

Though the State Council, China's cabinet, announced on May 8 that entertainment venues including cinemas could resume work with pre-booking and limited capacity measures, cinemas across the country remain vacant. 

According to a survey by the China Film Association, 40 percent of the 12,400 cinemas in China are very likely to close and many are facing bankruptcy. That works out at about 5,000 cinema closures with a total of 28,000 screens. 

The 187 surveyed cinemas said they had earned an average of 344,500 yuan ($48,707) in the first quarter, less than one-third of their 1.18 million yuan operating costs. 

"Nobody knows when cinemas will reopen. If you want to continue with loans, there is no way to assess the risks. The State Council has allowed cinemas to reopen, so there is no problem with the policy. You are just unable to explain to the bank why cinemas can't recover their business," a cinema investor who owns four movie theaters in Northeast China and South China's Hainan Province told Yuli, an official entertainment WeChat account.

Most cinema owners are at the end of their tethers. Facing bankruptcy, many have sold their homes to maintain cash flows, and some have started to sell products online or deliver food to pay rent and employee salaries. 

In recent days, the Ministry of Finance and the China Film Administration announced required cinema contributions to a special film industry fund would be cancelled for the period from January to August. Beijing's finance department on Tuesday decided to refund cinema contributions paid since the start of the year in order to ease financial strain.

Small-scale cinemas in China with less than 500 seats suffered the most in the first quarter, with only 10 percent revenues compared with the same period last year, the association's report said. 

If Chinese cinemas cannot reopen until October, their annual revenues would plunge by 91 percent, the film association predicted.

Photo:GT

 No blockbusters

Chain cinemas under big film companies are also struggling. 

A shockwave passed through the Chinese film industry on June 10 with the news that Huang Wei, vice president of Bona Film Group, had killed himself at the age of 52. 

In a statement, Bona said Huang had suffered from long-term insomnia and depression due to health issues. His death came at a time when the industry had been hit hard by the pandemic. 

Fellow cinema giant Wanda told the Global Times on Monday that due to the impact of COVID-19, all cinemas under the Wanda brand have been closed.

The group has 656 direct chain cinemas across China and its self-supporting cinemas have a 13.3 percent accumulative box office market share. 

"Cinemas are afraid to reopen at the current stage. I am afraid they may lose more if they restart operations now as all kinds of expenses will increase after reopening, but few viewers will come," Yun noted, citing a lack of blockbusters as the key reason. 

Usually, a 20 percent to 30 percent attendance rate is sufficient to ensure cinemas do not make a loss, but under the current situation that is very hard to achieve, he said. 

"More importantly, to my knowledge, the China Film Administration has looked into the domestic release of blockbusters. Unfortunately, no one has agreed to release them due to loss of revenue concerns," Yun said. 

Take Detective Chinatown 3 as an example. A "big and proper release date" must be chosen while waiting for the next step of recovery, an official at Wanda Film told media in a group discussion.

Changing habits

Film makers in Hollywood are also awaiting the revival of the Chinese market. 

Take Disney's live-action remake of Mulan as an example. Yun said it must rely on the Chinese film market, and that many US films target Chinese viewers above American cinema-goers. 

Originally scheduled for release on March 27, the film was delayed and is now set for a July 24 opening, potentially making it the first major summer release in movie theaters. 

Many who trade foreign films or introduce them to the Chinese market are unsure if or when they will be able to return to large film festivals.

Zhang Shuang, vice president of MovieZone, a Chinese app showing foreign films not released in domestic cinemas, told the Global Times that film traders' working efficiency had decreased at least 50 percent compared to face-to-face talks. 

However, his company's business volume doubled after the outbreak of the virus. "COVID-19 has changed our viewing habits," Zhang said. 

Many Chinese viewers now watch films online in "virtual cinemas," which allow people to post and read other viewers' comments. 

"I'd say online films will neither replace nor compete with watching films in cinemas, but the two practices will be complementary… The film industry - from production to publicity, from cinemas to regulators - needs to think how to adjust its operation model in order to survive a long-term battle against the virus," Zhang said. 


Newspaper headline: Show stopper