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There were 12,408 cinemas in China at the end of 2019, almost double the number in 2015. A reduction of 40 per cent would mean nearly 5,000 cinemas could go bust as the result of the pandemic. Photo: Bloomberg
EconomyChina Economy

Coronavirus: nearly half of China’s cinemas in danger of permanently closing due to pandemic

  • The boom times are over for China’s huge cinema industry, with the coronavirus pandemic forcing prolonged closures
  • A new industry survey suggests that 40 per cent of cinemas, almost 5,000 in total, could go bust because of losses stemming from the Covid-19 lockdown
China economy
Sidney Leng
Sidney Leng
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Four in 10 Chinese cinemas are in danger of permanently closing due to the coronavirus outbreak, dealing a heavy blow to the once booming industry, according to a survey by the China Film Association.

There were 12,408 cinemas in China at the end of 2019, almost double the number in 2015. A reduction of 40 per cent would mean nearly 5,000 cinemas could go bust as the result of the pandemic.
Cinemas have been among the last venues to reopen in China, as lockdown measures are gradually lifted. In early-March, a small number of cinemas reopened, only to be shut down a few days later, after the number of asymptomatic infection cases grew.

“If you want to watch a movie, find one online,” said President Xi Jinping on March 31 on a visit to the city of Hangzhou.

The Chinese government said earlier this month that cinemas, among other indoor entertainment venues, could reopen with limited bookings. But without new film releases, it is uncertain how many would attend.

The complete shutdown of movie screenings for more than 100 days “has not happened since the Sino-Japanese war,” said Zhi Feina, a movie industry expert, in a recent interview with the Chinese media outlet Southern Weekly.

In the first quarter, China’s box office takings dropped 88 per cent from a year earlier to 2.23 billion yuan (US$312 million). Small cinemas with fewer than 500 seats suffered the most, with revenues only reaching 10 per cent of the same period last year, according to the survey.

None of the 187 cinemas surveyed were making ends meet. Their first-quarter revenues were only 344,500 yuan on average, less than a third of the average cost of operating. As a result, 42 per cent of China’s cinema operators felt they were at risk of closing down.

Data from Dengta, an analytical platform for the film industry, also shows that the number of cinemas generating box office revenues has fallen significantly this year, ending a six-year run of rapid expansion.
Before the pandemic, cinemas were a crucial part of a drive to use the service sector to boost employment, creating at least 300,000 jobs last year.

By the end of March, about 20 per cent of cinemas had laid off staff to cut costs, most of which were smaller cinemas with fewer than 1,000 seats. An additional 12 per cent did not rule out lay-offs in coming weeks or months, the survey showed.

More than 120 cinemas taking part in the survey did not intend to make lay-offs, even if that meant they would incur greater losses. Among them, cinemas with 1,500 to 2,000 seats had the biggest loss of 3.5 million yuan (US$490,000) in the first quarter.

The China Film Association estimated that if cinemas reopened in June and revenues gradually recovered to 90 per cent of last year’s levels within six months, the full-year box office revenue would drop 66 per cent. But if reopening is delayed until October, the annual revenue would plunge by 91 per cent. In 2019, China generated 64.2 billion yuan from movie tickets, according to official government data.

This article appeared in the South China Morning Post print edition as: 40pc of mainland cinemas at risk
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