A pair of China-focused panels at the Cannes Virtual Market this morning provided some insight into what’s happening in the Middle Kingdom as Beijing deals with a recent reemergence of coronavirus cases and movie theaters remain shuttered. The news wasn’t terribly positive.
Jerry Ye, Chairman of Huaying Tianxia (Tianjin) Film Development said there is “no timetable for reopening for cinemas just yet. It’s a complicated situation, especially now with the situation in Beijing. The priority is about the safety of moviegoers.”
Cinemas have been closed since late January in the world’s second largest box office market, and estimates are that grosses will be down by at least $4B in 2020, a number that could rise if theaters don’t come back soon. If the summer doesn’t provide solace, the next major local date will be National Day on October 1. “If we miss National Day,” Ye opined, “I don’t know for most producers, distributors and exhibitors how they can deal with the situation.”
Ye said that while the Tier 3 and 4 cities are currently in a better position, Tier 1 cities need to re-open at the same time. And, the sense is “they need a big blockbuster movie.”
Ye also noted that given some Lunar New Year movies shifted to VOD releases in the early days of the crisis, going forward “the change is that online will be more important.” Theatrical “will still be very important for the industry, but in a new way.”
Speaking of production, Liu Chun, General Manager of China Film Co-Production Corporation, said that following the new virus cases in Beijing, “In general, from what I heard, most of production is still closed in China.”
The heads of the provinces and China Film Administration have issued suggestions and requirements that national film and provincial film authorities should allocate some kind of financial support to the production and exhibition sector, Liu said. But while they also called on the insurance industry to provide support to film shoots, most companies “were very cautious and have not made any decision, not carved out any specific policies.” Still, he explained, “In China, most film projects seldom receive funds from insurance companies for productions, most funds are raised by producers themselves and they carry all the risk themselves.”
Production companies also have to think carefully about when cinemas will re-open in order to get their investment back.
Cheng Leer, VP of Mahua FunAge Pictures, said investors and film companies are much more cautious with new projects and suggested that in the next few years they will “favor more blockbuster type” films and “may focus more on visually impressive films which people can’t experience on a television or mobile device.”
Jeffrey Chan, who is EVP of Bona Film Group, and was speaking from Taipei where cinemas never closed, said box office has come back there to about 20% of what it used to be. He’s been releasing new local movies that are getting a bigger share of screens than they normally would because of the lack of new Hollywood product.
Still, it’s a “tricky game” because of the attitude of audiences. “There is the desire for blockbuster titles versus the fear of going to a crowded enclosed space, and the psychology of spending that time somewhere else. We’re not just competing against entertainment. People have to keep social distancing or work from home so they want to go outdoors. The behavior of people is that they dine out, are gathering with friends drinking, going outdoors. We haven’t seen a large amount going back to the cinema.” But that may change he said, “Hopefully with strong titles.”