CCTV Finance Investigation: Movie box office keeps rising, but famous cinemas are closing?

The official WeChat account of "CCTV Finance" reported on February 23 that in 2018, the Chinese film industry reaped considerable rewards, with total box office revenue reaching 60.9 billion yuan, maintaining a sustained growth trend for many years; the number of screens reached 60,079, ranking first in the world; and the number of moviegoers reached 1.72 billion, ranking first.

However, behind the seemingly booming film market, some hidden worries are also exposed.

In the fourth quarter of 2018, the once prosperous Star Cinema Line was frequently reported to be "closing down" and "suspending operations". The once top-ranked Star Cinema Line is now facing the dilemma of "owing debts", "owing rents", "owing wages" and "closing down". Why?

What does the closure of Star Media indicate? Where are the good movies? How should the supply-side reform of the film industry be carried out?...With many questions, the reporter of "In-depth Finance" of CCTV Finance Channel launched an investigation.

The decline of five-star cinemas

As a researcher at the Prospective Industry Research Institute, Wang Yinghu has been tracking and studying the film industry for four years, paying attention to industry development and forward-looking analysis. The reporter and Wang Yinghu went to the Beijing Century Jinyuan store of Star Cinema for a field investigation.

Most areas of this cinema are under renovation, and currently only three halls are open for showing movies. There are only two staff members on site, one in charge of selling tickets and the other in charge of checking tickets.

During the investigation, the staff seemed reluctant to answer questions about the cinema. The reporter noticed that there was a notice on the wall saying "The cinema is undergoing renovation and is open for business as usual", and a job advertisement next to it. But there was no movie information, and the only way to buy tickets was to ask the staff. Even snacks and drinks were no longer sold at the usual counters, and there was no waiting area for the audience.

Dozens of ticket stubs were placed on the table at the ticket gate, and the carpet in the viewing channel had been removed, exposing the bare concrete floor. The information on the seats sold in the screening halls on the computer showed that the ticket sales on that day were not ideal. Only dozens of tickets were sold in one of the 400-seat viewing halls. The country's first five-star cinema now seemed deserted.

It can be seen that from business scale to personnel, and then to services, Star Media is cutting costs.

The reporter then went to another Star Media Cinema under Star Media. The site was already under renovation and the cinema brand was no longer Star Media.

In addition, there is a "China Film Star Cinema" just a few hundred meters away. Although it has the words "Star Cinema" in it, it is understood that it has changed hands several times and has no relationship with Star Cinema anymore.

Wang Yinghu believes that the problems of Star Media are not only due to its own management problems, but also to the rapid expansion of the entire cinema market and the continuous expansion of the market. After all, rapid expansion requires a lot of financial support, and the revenue cannot keep up, and the capital chain has problems, resulting in the failure of input-output to change in a positive proportion.

Box office of "Wandering"

Although the closures of Star Cinemas one after another have individual reasons, they are also closely related to the development of the entire industry.

Star Media Holdings has been suspended since September 3, 2018, and then, in early December, the Hang Seng Index Company removed Star Media Holdings from the Hang Seng Composite Index.

During the five years from 2014 to 2018, China's main cinema chains presented a "one super and many strong" situation. Except for Wanda Cinema Line which remained in the first place, the second, third and fourth places all changed, which shows how fierce the competition in the industry is.

At the same time, we can see that the box office revenue of Star Media has been declining in recent years, and the number of moviegoers has dropped significantly. In the national ranking of the same industry, it has also retreated from one of the top five. According to a survey by the Forward-looking Industry Research Institute, in 2018, its box office revenue ranking was outside the top 10, and it fell from 189 million yuan in July 2015 to less than 10 million yuan per month in November 2018.

Wang Yinghu, a researcher at the Prospective Industry Research Institute: "The competent ones will be promoted, and the mediocre ones will be demoted. If you are not good at management, if you have problems with your own business management, and if the operating efficiency of your entire cinema chain is relatively low, then you should be eliminated by the market. I think the problems of Star Media do not mean that the Chinese film industry is not doing well. On the contrary, on the one hand, our country's film industry is moving forward and will maintain a relatively fast pace of development. This trend will not change in the short term.

Where are the good movies?

According to the Top Movie Database, approximately 300 cinemas in my country have been confirmed to have closed down or withdrawn in 2018 (excluding cinemas owned by Star Media).

However, on December 11, 2018, the State Administration of Press, Publication, Radio, Film and Television issued the "Opinions on Accelerating the Construction of Cinemas and Promoting the Prosperity and Development of the Film Market", which clearly stated that by 2020, the total number of cinema screens joining the urban cinema chain in the country will reach more than 80,000. For China, which currently has 60,000 screens, this is equivalent to an average increase of 10,000 screens per year. In 2018, a large number of cinemas across the country were closed, and the output of single screens continued to decline, with an average attendance rate of less than 13%. Where did these 20,000 screens come from?

In fact, the Chinese cinema market has experienced ups and downs in 2018. Everyone generally pays attention to the closure of about 300 cinemas across the country, but what we almost overlooked is that more than 1,100 new cinemas were opened, far exceeding the number of closed cinemas. As a result, the total number of cinemas in the country exceeded 10,000.

Therefore, it is not impossible to achieve the goal of 80,000 screens in two years, and it may become a new opportunity for the Chinese film industry after the industry is rectified and the quality of cinema operation and management is improved.

So where are the good movies?

Movies are like meticulous paintings. The details of the content and the layers of color determine its quality and influence. In other words, the key to whether a movie is good or not lies in its content.

According to the survey, compared with directors, actors and production standards, China does not lack good directors, good actors and good production teams, but lacks good scripts and good stories. So, under the demand for content, if we want to tell good Chinese stories and tell Chinese stories well, can our film and television production level and ability keep up? Where can we find good scripts? How can the supply side of the film and television industry be upgraded? These have become important factors that need to be considered and improved in the development of China's film industry.

Many people think that 2018 is the "cold winter" of the Chinese film industry. In fact, the so-called "cold winter" is, to some extent, also a period when problems are exposed. After rectification and improvement, the industry as a whole is moving forward. We don't know whether Chinese cinema chain companies will enter an era of "big fish eat small fish", but the market elimination law of "capable people rise and mediocre people fall" will continue, good content is still king, and a healthy market pattern of the Chinese film industry will gradually take shape.

This "winter" is a bit cold, but perhaps it will be greeted by a better spring.