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Original title: The cinema was closed for 100 days and could not advertise on the 51st day. Some people may not be able to wait for the resumption of work … Source: Chinese Entrepreneur Magazine
How long have you not been in the cinema? The response is 100 days.
On this little holiday, not only did the 100-day film industry fail to deliver on the long-awaited May 1 gold file, but when it can resume work, there is no response.
On April 15, the Chinese Center for Disease Control and Prevention mentioned again at the press conference of the Joint Defense and Joint Control of the State Council that it is recommended that entertainment venues such as theaters and halls not be opened. entertainment for the moment. Previously, some local theaters opened briefly in late March, but on March 27, the National Film Administration requested an emergency shutdown, and the national theaters were closed again across the board.
“The entire industry has reached a critical moment!” Director Chen Sicheng said at a special online conference on “Coping with the film industry in the face of the impact of the epidemic situation,” even if Yu Dong, President of Bona Pictures, and Zeng Maojun, President of Wanda Film Group,Hengdian Film and TelevisionXu Tianfu, president of the company limited by sharesChinese movieIndustry leaders came together and were still helpless about the current situation in the industry.
100 days is as long as a century. The Spring Festival, Valentine’s Day, and May 1 booths have been “aborted,” and the summer booths are about to pass.
After entering April, the movie theater continued to report layoffs, including CGV layoffs for high-end movie business were as high as 30%. On April 17, the city of Tianjin Vientiane Orange Sky Jiahe Galaxy Studios permanently closed its stores, becoming the first closed cinema in downtown Tianjin. Many small and medium theaters, such as Orange Sky Golden Galaxy Studios, may not be able to wait for the resumption of work.
The prevailing opinion in the industry is that the epidemic has become the last straw to crush many theaters. Today, the resumption of theaters is indefinite, perhaps more theaters will face closings and closings, and the reorganization of movie lines is inevitable.
Resumption days indefinitely
Starting in April, Yan Jing will direct the theater every business day. Although not open to business, as a regional leader of a leading theater line, you must be on hold at all times.
This is the biggest crisis that Yan Yan has experienced in the last ten years.
Since the cinema closed, he has met with the theater management almost every day to discuss countermeasures online. To cut operating costs, the management salary of more than 50 theaters she managed was cut in half, and the salary of base employees was reduced to the local minimum wage.
Based on experience from previous years, the Spring Festival box office represented approximately 10% of the annual box office, and the February to April box office represented approximately 30% of the annual box office. This year, all proceeds will be liquidated.
Yan Jing revealed that the best movie operation he accomplished could have a profit of 10 million yuan per year, and almost a profit of about 2 million yuan. Right now, it’s ready for a six-month loss and can close individual theaters if necessary.
The March 27 notice means that the resumption of work is temporarily indefinite. In the following month, Yan Jing had to adjust his staff.
“Originally, our movie theater operation required an average of about 20 people, and now we can only pay the salaries of the store manager, vice president, and finances. Others can only suspend payment based on their personal wishes.”
The theaters that Yan Jing is responsible for are mostly high-end theaters, most of which have around 1,600 seats, including IMAX Hall, VIP Hall, and Ordinary Hall. The cost of maintaining a theater of this size is not low. “Renting a theater of this size requires at least 8 million yuan a year, requiring a turnover of 40 million yuan to be completed. After closing, the receipt is almost zero, and it is foreseeable that the second half will not reach the normal level, and some theaters may be closed according to performance in the future, “said Yan Jing helplessly.
“The film and television industry is too difficult.” A Xiaofen, president of Dasheng International Media, said what he feared the most was a loss of confidence among industry professionals.
The constant news that began to spread in March made Yan Jing extremely anxious: “I feel like there is no tomorrow, and many colleagues have said that they can change. Many of us have been in this industry since we graduated from university, and we have never we think about this industry. ” It will be so vulnerable that the entire industry is now affected. “
In China, the film industry is not a “lucrative” industry, and it is not even a “lucrative” business. In 2019, as the second-largest movie market in the world, China’s movie box office revenue was 64.2 billion yuan, just 1.4% of national restaurant revenue (4.7 billion), less 8.3% of Country Garden sales of the largest real estate company in the country (771.5 billion)%
According to statistics from the China Film Projection and Distribution Association, there are 47 cinema lines in China in 2019, totaling approximately 12,000 theaters.Wanda MovieIt has held the first place in the country for 11 consecutive years at the box office, cinema viewers, market share and other indicators, occupying the leadership position. According to the 2019 financial report, Wanda has a 13.3% market share and, at the end of 2019, it had 656 directly operated movie theaters. In 2019, it will reach an operating income of 15.435 billion yuan, of which the highest gross profit margin is the sale of popcorn and beverages.
Yan Jing revealed that 60% of the main income of the general theater line comes from the box office, 25% from the sale of products and 15% from advertising. Now that the theater is not open and income is at zero, you can only consume the existing funds.
During the epidemic, some theaters had no choice but to start a takeaway business. Yan Jing learned that his colleagues had achieved 4 million sales, but he still gave up on this self-help route in view of the logistical risks of delivery.
Some theaters have also started new businesses, such as creative photography, but the photography industry has been hit by a small number of customers from the start, and second, the cost is also very high. There are almost no successful examples of theatrical transformation.
The margin is not easy. Yan Jing focused on the pre-sale of package tickets. The price of the package ticket ranges from 99 to 299 yuan. It is valid until the end of the year and you do not have to face the refund problem after being called. “The original intention of making a package is to solve the cash flow problem, but the economic benefits are not obvious. But what is more important, we must” face “and have the opportunity to expose to provide professionals and consumers with some trust”.
What Yan Jing is most concerned about is the consumers’ unwillingness to watch movies. According to data from media surveys launched on Weibo, so far, almost 80% of the audience chooses not to go to the cinema to watch movies. Furthermore, only 12% of viewers are willing to enter the theater for their favorite content.
“My wallet is ready!” The bear fanatic Xiong expressed his willingness to “Harry?” “Porter” entered the cinema, but the next moment he had some doubts, “Nightclubs are open, shouldn’t cinema have problems?”
Cat Eye professional data analyst Liu Zhenfei said: “What is needed now is for the audience to gradually unload the psychological burden and enter the theater with enthusiasm for consumption.” But from the point of view of movie watchers who briefly resumed work in March, consumers have not done well. Ready to go back to the cinema to see a movie.
“We have often held internal meetings to discuss how to build trust after the opening, but now consumer confidence in watching movies has not been fully restored,” said Yan Jing helplessly.
What makes her even more anxious is that no one can tell her how long it will take to resume work.
New unreachable movies
After a brief resumption of work in March, the box office ranging from 20,000 to 30,000 was deemed too grim by many people to cover operating costs, and there was no need for the theater to open. But looking back now, it is more important to resume work to bring confidence to the industry.
After the first resumption of film, Warner Pictures announced that the 4K-repaired 3D version of “Harry Potter and the Magic Stone” (“Harry? Potter”) will be re-run on a large scale in mainland China. The “savior” of the theater.
On the day of the official announcement, there was a standing ovation on social media, despite the fact that the film is still unresolved so far.
Liu Zhenfei said that for the film market that is coming out of the blank period, getting back on the right track will require box office success. “Like a classic IP with a 20-year fan base,” Harry? Potter “has the strength. Becoming a stimulant for the audience to return to the movies will inevitably bring a lost wave of movie watching.”
Film analyst Tank said that compared to the new film, the classic film screening on the one hand saves the cumbersome forwarding and reviewing procedure on the other hand the film requires lower advertising costs, and even some movies may be completely “naked”. “Entering the market has greatly reduced the pressure to pay.
Reprojecting old films as a means of transition, on the one hand, uses low-cost marketing of old films to gain customer traffic, as a heating method to attract public attention to the film; on the other hand, it solves the problem of the lack of content in the film market.
However, re-screening old films is not enough to activate the entire film industry.
When the outside world placed high expectations on replay of old movies, Yan Jing admitted that the excitement of these movies was not as obvious as everyone imagined: “Even if the theater opens, there is little point in not having new movies.” The replay of the film lost the benefits of the first release and the window period of the theater. “Most of them can be seen on the video website. The public does not need to enter the cinema for this.” For the theater, the new film is more necessary, “but there is no new film at this stage. Dare to take risks and configure the archive.”
The new film, which the cinema could not reach, chose the media broadcast desperately. The movie “囧 妈” originally slated to premiere in the theater on the first day of New Year’s Day was the first to air on the internet platform for free, which gave high praise to the film industry. Many people have wondered if “Xu Zheng has a good or a bad head.” After seeing this election three months later, he has to admit that “Jiang Ma” has made a good business decision.
So far, four cinema films have chosen “Cinema Transfer Network”, Yan Jing admitted that this has had a very obvious impact on the cinema line, but this is also an innovation of film survival and market behavior. It remains to be seen if it is widely accepted, but the theater must adapt to this new challenge.
Tank has more confidence in this. He believes that the impact will not be great. “New movies with certain box office expectations will not be selected on the platform, the platform will not have a higher price to buy, and the big screen will be better. Visual Effects.”
Of course, no one dares take risks, the only thing the film can do is wait for the opportunity. “The first movie released at this stage will inevitably come under great pressure, and we need to understand the attitude of the new movie to choose to wait and see,” said Liu Zhenfei.
The “Chinatown Detective Three”, which was once considered by the industry as “excellent” as the most viewed film, did not dare to rush to present it. Zeng Maojun, President of Wanda Films, revealed at the special web conference on “Film Industry Response to the Impact of the Epidemic” that “Chinatown Detective 3” is waiting for the right time to be released.
Everyone expects the theater to operate and the market to recover, but as the vanguard, it takes courage. “Everyone is carefully testing the market response.”
Yan Jing revealed that the industry has discussed whether to allow the release of new high-quality movies in degrees. For example, new films are scheduled to be released in places where the epidemic has been fully controlled, and the release was postponed in places where the epidemic is still spreading, but soon said that “this is not realistic.” First, the places where the epidemic is most severe are mostly developed cities or urban centers. Abandoning these places means losing the main ticket warehouse. “And the original audience rate for the film may reach 20%, but only 10% due to lack of consumer confidence. At the time, the film side you will also have a lot of losses. ” Second, for the other movie, it will inevitably offend many cinemas. “If some high-quality films are only shown in cinemas in certain areas, who will bear the losses of other cinemas? This approach is not so reasonable on the side of the movie like for theaters that can’t be released. “
However, the tank also suggested that some new videos take action. He said that while the market will take time to lift the ban, it can still do some prep work, such as fixed-scale materials and deployment and distribution planning, to bring some confidence to the market and professionals.
Shuffle will finally come
Tianjin Tianxiang Orange Sky Jiahe Galaxy Studios’ parting words also ended as a movie.
“We screened a total of 164,847 movies. 4,134,602 viewers came to the movies to watch movies. The number of business days was 2,752 days. On January 23, 2020, at 10:20 am, Hall 3, the latest movie was screened” Bad Kill. “Under the double pressure of operating costs and the new epidemic of coronary pneumonia, we finally did not insist on waiting until the day we resumed work.”
No theater can easily survive this crisis.
Wang Kai, CEO of Yikai Capital, said during the second closing of the theater that in the next 12-18 months, the global film industry will face the largest disruption and reorganization in history. “As long as the epidemic exists, due to the disparity in the risks and earnings of watching movies, whether the theater opens is just a formal question. If the theater business really needs new crown vaccines or special medications, in the next 12- 18 months, The global film industry will face the greatest disruption and confusion in history. “
There has always been a surplus of cinemas in the Chinese film market, and the growth rate of movie lines is higher than the growth rate of the movie box office. According to public data, in 2019, the total box office on the continent was 64.266 billion yuan, an increase of 5.4% year-on-year. The total number of movie viewers reached 1,727 million, an increase of 0.64% year-on-year. However, the number of new displays across the country reached 9708, an increase of 16% yoy. The growth rate of home screens is much higher than the growth rate of movie viewers, the industry’s resource utilization efficiency is not high, and there is a great risk of loss.
Iqiyi CEO Gong Yu has publicly stated that in the first quarter of 2019, the average attendance rate for theaters across the country was only 12%, and about half of the theaters suffered losses. More importantly, the loss situation is already the norm. Relevant data shows that during the four years from 2014 to 2018, more than 60% of theaters had less than 5 million box offices throughout the year, and 90% of the theaters were not profitable.
Tianyancha Professional Edition data shows that in the first two months of 2020, fewer than 8,000 theater companies have been added. Compared to the same period in 2019, the number of new theater companies in China has decreased by 25%. At the same time, the number of theater company cancellations has increased year-over-year since 2012, and the number has increased significantly in 2015. According to the “Economic Daily” report, 5,328 film and television companies have been canceled or revoked in 2020 Which is 1.78 times the number canceled or revoked in 2019.
However, according to Yan Jing’s observation, it is not yet the peak period for the reorganization. “Once work resumes, the real closing wave will come. Many small and medium third and fourth line theaters basically depend on the Festival Spring to complete half of their acting duties. Almost grain-free, once the door is opened, the rent will become the last straw to crush them. “
Yan Jing learned from his peers that a boss with 24 theaters has made adjustment plans and only maintained 8 theaters with excellent performance, and all other theaters were closed.
Western valuesAccording to an investigative report, “The closure of the epidemic may lead to the closure of some small theater chains. Major theater companies have strong financial strength, and concentration will increase during this process.”
However, the major theater companies are not too good. In 2019, Wanda’s movies,Jinyi Film and Television, Hengdian Film and Television’s net profit is decreasing.
Among them, Wanda Movies lost more than 4.7 billion yuan, and its net profit fell 324.5% year-on-year. Since 2015, Wanda Films’ single-screen production has continued to decline, and the gross profit margin of viewing revenue has continued to decline. According to data from the 2019 semi-annual report, the gross profit margin of Wanda Film’s viewing revenue in the first half of the year was only 6.07%, a year-over-year decrease of 8.39%.
The unsatisfactory performance of the leading company caused Yan Jing to become frustrated, but he quickly regained his spirit. “The entire industry is bleak. It is normal for the company’s performance to be unsatisfactory.”
It was emphasized twice that “the company will not fall,” and Yan Jing’s tone was full of exhaustion. She is still waiting a long time.
(At the respondent’s request, Yan Jing became a pseudonym)
