Imax partners with Wanda Cinema to add 150 theatre screens in China
Imax China Holdings, the country’s biggest widescreen film provider, struck what it described as “the largest deal ever” on Tuesday, to add 150 theatre screens across China in partnership with Wanda Cinema Line, controlled by China’s richest man Wang Jianlin.
The agreement will see Wanda Cinemas’ footprint of Imax theatres expand by 70 per cent to 360, with a majority opening over the next three years, and Imax China’s total backlog of screens to grow by nearly 60 per cent, according to the cinematic-technology provider.
The Shanghai-based arm of Imax Corp, which has its major operations in New York and Toronto, signed the pact with Asia’s largest movie theatre chain despite China’s box office revenue for the first half of the year growing at its slowest rate since 2011.
“This is a landmark development in Imax’s history and a strategic linchpin in our growth strategy, particularly as we’ve seen over time that signings lead to installs, higher box office and ultimately more revenue,” said Richard Gelfond, chief executive of New York-listed Imax.
Since 2013, Imax and its biggest client Wanda have cooperated on a number of Mandarin-language blockbusters, including Man of Tai Chi, and last year’s Mojin: The Lost Legend, the highest-grossing local-language film ever released by Imax.
“We look forward to leveraging this successful [business] model for years to come,” said John Zeng, president of Wanda Cinema Line.
Imax said its total number of theatre contracts this year has reached 284, including 229 in China, already outstripping the company’s previous annual global record of 277.
However, doubt has been raised recently over whether growth of the world’s second largest movie market, that accounts for a third of Imax’s global box-office revenue, is losing steam after posting 34 per cent annual growth for each of the past three years.
In the first half of the year mainland moviegoers contributed to a 21.41 per cent growth in China’s box office from a year earlier, the slowest in five years, while an average of 20 new theatre screens were added every day during the same period, according to government statistics.
For July, traditionally the peak season for movie releases, cinema revenue tumbled 18.2 per cent to 4.5 billion yuan against the same period a year ago.
“There was a lack of high quality movies for the first half of 2016, and we believe the outlook for China’s box office market will still remain gloomy given the higher base created last year,” said GF Securities analyst Zhu Ran, who does not expect last year’s explosive growth to continue.
But he said Imax’s latest landmark deal to substantially ramp up its presence in China would beef up its revenue in the longer term, as the growing spending power of Chinese consumers would propel overall box office growth in the years ahead.
“More people in tier three or four cities in China can afford to enjoy Imax now, though they probably need only one Imax screen for one city,” Zhu added.