In March 2019, the film market in China had already more than 10,000 cinemas and 60,000 screens. The total number of screens in China will exceed 80,000 by 2020, according to the Opinions on Accelerating the Construction of Cinemas and Promoting the Prosperity and Development of the Film Market issued by State Film Administration. To cater to the new demands in the new era, cinemas and cinema managers in the downstream of the film industry should review the current industrial development environment and come up with corresponding adjustments. Facing the continuous development and changes of the industrial situation, International Film Market Forum, as a highlight of the Beijing International Film Festival, aims to provide an international market communication platform for cinemas and cinema managers to jointly discuss how to strengthen cinema operation & management, upgrade the quality of cinemas and further promote the development of Chinese film industry.
International Film Market Forum was host by the Organizing Committee of the Beijing International Film Festival and organized by China Film Co., Ltd. as the only market forum focusing on cinema terminal screening at the Beijing International Film Festival. As an exchange platform, it builds a bridge of mutual learning and communication for Chinese cinema management with the participation of senior film practitioners and professional cinema managers, fully embodying the tenet of “Share the Screen, Shape the Future”.
On the morning of April 16th, the opening ceremony of the forum was held at the New Colourful Clouds Cinema. Zhang Hong, Secretary of the Branch Party Leadership Group of China Film Association (CFA); Ming Zhenjiang, Chairman of China Film Producers' Association; La Peikang, Vice Chairman of CFA and Chairman of CFC; Wang Zhi, Deputy Director-General of the Beijing Municipal Radio and Television Bureau; Jiang Ping, General Manager of CFC and a national first-class director; Hu Mei, a renowned Chinese director, producer and screenwriter attended the opening ceremony and delivered speeches. With the objective of “International Vision, Intelligent Technology, Benefit Increase”, the Forum set up two major sections: “Cinema Manager Master Class” and “International Film Market Promotion & Discussion”. On the afternoon of April 17th, the two-day forum was brought to a successful close and the certificate of course-completion was awarded to the participants.
Industrial Environment: Coexistence of Challenges And Opportunities
With the development of Chinese film market, the box office nationwide has been increasing progressively. However, in the process of rapid expansion in the number of cinemas, the competition pressure of single cinema is aggrandized, resulting in the diversion of box office and progressive decrease of single-screen box office output - which is the confusion and challenge that current major cinemas are faced with.
Fang Bin, Executive Director of Guangdong Dadi Cinemas Co., Ltd., pointed out the path to breaking the situation for us. He analyzed the current living and operating conditions of cinemas under the topic of “confusion and opportunity of Chinese cinema development in the Era of 10,000+ Cinema amid the expected urbanization of China”.
In the market, about 60% of the cinemas record a box office of less than 5 million yuan, and about 10% of the cinemas contribute 50% of the annual box office. Fang Bin believed that the key to improving the box office is to increase the number of audiences and frequency of watching and to obtain cinema consumers in the uncultured “fertile lands”. In recent years, the demographic dividend from China's urbanization has served as a driving force for the development of cinemas, because the rapid development of urbanization will facilitate the development of social public service facilities, and local residents will inevitably need entertainment activities such as films. Cinema investors can plan investment and construction in areas with rapid urbanization.
It takes at least two years for the cinemas from the development, construction to market cultivation, and costs massive investment in human and financial resources. Jin Bo, CEO of Beijing Guanyu Cineplex Management Co., Ltd., gave a talk on “Restructuring and Capital Operation of Cinemas in 2019”. He stated that the diversion of audiences is an inevitable phenomenon. The industry will face integration in the future, and it is impossible for cinemas to maximize efficiency out of the entire industry.
Jin Bo focused on four aspects - cinema reorganization trend analysis, capital operation and acquisition criteria, capital operation process and precautions, and how cinemas respond to capital operation, and actually cited the cases of cinema merger and acquisition. From high-premium acquisition, rational-premium acquisition to calm acquisition, the capital operation of the current cinema industry is increasingly cautious, and the criteria are becoming more stringent - Jin Bo so concluded. He reminded all practitioners to be crisis-conscious. “Cinemas need to make an alternative choice between being acquired and self-management, but improving the cinema’s operational capability is the only way”.
Whether to seize the opportunity of urbanization for cinema construction, or to conduct merger & acquisition and industrial integration, the purpose is to build better cinemas, thus contributing to the development of Chinese film market.
Benefit Increase: Being Unique with Breakthrough Mentality
Cinema operation has never been easy. Cai Ting, senior cinema operation manager and former CGV university team made a summary for cinema managers, that is, “normalizing operation, returning ideas to nature”. In her speech, she explained how to effectively manage in a systematic way and improve the leadership of cinema managers. Cai Ting stressed that it is necessary to seek individual characteristics in the overall environment, and to use standardized operation and systematic management to implement such a feature continuously and extensively in various cinemas, and even in the employees. On the site, she used forms in various series and usages to demonstrate the layout and furnishings of different areas in a cinema, with an aim to prove the necessity, value and significance of systematic management. “We should find the essence through phenomena. The success of a company is not for it but for the whole system.”
The main income of Chinese cinemas is always sourced from box office. In fact, non-box office incomes such as articles for sale, peripherals, and derivatives enable the cinema to establish a more complete operating structure. Watching a film is not a single consuming behavior, but complemented by other consuming behaviors to form a closed loop. What the cinema needs is to make its own products one part of this loop.
Ma Ye, Deputy General Manager of Zhongjucheng (Beijing) Culture Corporation, constantly emphasized in the keynote speech that the articles sold in cinemas are not a rigid demand for the audiences, but they can create an atmosphere on the spot, stimulate the needs of customers and present offline experiences. Making the cinema a more diversified and humane service place gains sales opportunities and cultivates the audiences’ consuming habits and stickiness to the cinema. In this process, establishing cinema features, creating differentiation, and avoiding homogeneous competitions are required.
In the new media era, films need publicity, and cinemas need to break through the inherent thought and use marketing to voice, thereby enhancing their competitiveness. Wang Yan, Marketing Director of Sichuan Pacific Cinema Circuit Co., Ltd., put forward the “Three-in-one Laws” - Integrating Media, Marketing and Platforms - to explore how to create a free platform of cinemas in the current media environment for unbounded marketing. Wang Yan pointed out that the world is using its iterations and updates to remind cinema managers to change correspondingly, to face the macro environment with growth-oriented thinking, and to abandon judgments that are too subjective.
To achieve “media convergence”, cinemas should organically integrate all media forms such as fashionable and traditional, online and offline, internal and external to greatly enhance the boundaries of communication and resource value. Wang Yan used a clear mind map to lay out a channel network for us to create the cinema integration. Divided into groups and levels, refined marketing is completed, and the functional sections of each platform are used to directly stroke the audience’s psychology in a younger and more diversified way. “Marketing convergence” is a practical methodology. With the chain of cinema convergence, we can deeply explore the value of each channel, create social attributes, and achieve leapfrogging beyond circles. This new form will also become an important breakthrough for cinemas to solve the problem of homogenization. “Platform convergence” refers to the pursuit of the empowerment value of cinemas, avoiding internal perspectives while diversion, cross boundary, and empowerment are emphasized to achieve a win-win outcome. In his keynote speech, Wang Yan said: “Content encourages participation, experience replaces sales, and scene strengthens demand”.
Diversified Cooperation: International Vision and Intelligent Technology
On an international perspective, Gil Thomson, Chairman of 3A, shared the domestic and overseas distributions of French films, analyzed the growth trend of global box office, and discussed the distribution of Chinese films in France as well as the co-production of foreign films in China.
Gil Thomson mentioned that over the past six years, the global market box office increased by 15%, from $34.7 billion in 2012 to more than $40 billion in 2018. In the resumption of global market performance, they found that the global market box office was pulled by the robust growth of Chinese market. Using data from 2017, Gil Thomson pointed out that the Chinese film market was ahead of other countries with a box office growth rate around 20%. He specifically mentioned the wonderful performance of the Chinese film The Wandering Earth, which reached a global box office volume of $700 million.
There is still a lot to develop for Chinese films in the global market. France holds a film festival related to China each year to experience the charm and cultural connotation of Chinese films. Gil Thomson pointed out that the production and distribution of European films are under the management of the Council of Europe with a comprehensive system supporting the development of film. Nowadays, there are more and more co-productions of Chinese and European films. Following the conclusion of co-production agreement, they can enjoy the favor and support of the system, which boosts the communication between Chinese and European cultures.
In recent years, Chinese audiences have been able to watch more European films in cinemas. Gil Thomson admitted that films in various countries have their own attributes, for example, French films, which are different from Hollywood’s big-budget productions, lay more emphasis on emotions and art, and less on commercial and entertainment value. During the forum, some cinema managers asked: How can such films attract more viewers in the release? Zuo Heng, Deputy Director of Cinematic Culture Research Department at the China Film Archive, put forward his own understanding. Each film has its own specific method in publication. Its is necessary to find the ideal focus group, and explore the contents worth spreading from it and then conduct demassification and positioning communication. At the same time, this method must be accurate and conform to the positioning of the film.
From the quality improvement and upgrading of cinemas, to the box office situation and featured release from a macro perspective, the forum, which follows the development of world’s film industry, also probes into the new mode of film watching in China and foreign countries in the section of “International Film Market Promotion & Discussion”. In the era of big data, how to apply the cinema data to market development intelligently and efficiently carry out the secondary transformation of film viewers? How can laser projection technology promote the film industry since technologies are constantly upgrading? These are all significant issues for the development of film market in the future.