Feeling blue

At the beginning of the pandemic cinema operators in China got creative in trying to repurpose their venues, which were largely closed to moviegoers.

Some reopened their auditoriums as basketball courts, with players taking advantage of the high ceilings. Others leased out their premises for marriage proposals and wedding photos.

Operators have continued to come up with new ideas as they struggle to keep the lights on. In November, a cinema in Chengdu had another unexpected proposal: the offer of a lunchtime nap.

The move made some sense. The cinema, equipped with plush leather seats and blankets, sits in the middle of an industrial district in Chengdu. The packages, which cost Rmb12.90 (basic) or Rmb18.90 (deluxe), don’t even include a film. That’s because the cinema wants to make sure that the room is quiet enough for patrons to get some sleep. The pricier option includes an eye mask and a hot drink.

Tactics like these haven’t been enough to keep every cinema afloat. Hong Kong’s Emperor Motion Pictures has announced the closure of seven of its venues in China due to the poor business environment. The country’s largest chain Wanda Cinemas, a subsidiary of Wanda Films, has reported ticket sales of just Rmb4.9 billion so far this year. With over 800 theatres and 6,925 screens, average revenue for each theatre was around Rmb600,000 ($85,846).

“If you consider the rent, maintenance, staff wages, water and electricity, income of Rmb600,000 is nowhere near enough,” Entertainment Capital warned. “Thankfully for Wanda, it still has 56 theatres outside of China and possibly those are achieving positive cashflow. They might relieve some of the urgency at home,” it added.

Perhaps there is a path back towards better times. Movie regulators threw the industry a lifeline in late November when Hollywood producer 20th Century Studios announced that Avatar: The Way of Water, the long-awaited sequel to director James Cameron’s original blockbuster will be released in China on December 16, the same day as its global debut.

On news that Avatar 2 was set for a China screening, fans were delighted. “Finally! After 13 years!” one wrote.

“When I heard that Avatar 2 would be released on December 16, the same day as the rest of the world, I thought perhaps the country is close to opening up again. I haven’t gone to the cinema in three years. I’m so happy I can finally watch a movie on a big screen before Christmas,” another celebrated.

The success of the original Avatar – which made a whopping $200 million when it opened in China in early 2010 (a 2021 rerelease added an additional $57 million in takings) – triggered new appreciation of the potential of China’s box office. Hoping to replicate the experience, film studios have worked overtime to court Chinese moviegoers, including adding local stars and Chinese ‘elements’ to their productions (Avatar is still the highest-grossing film in history at the global box office – unadjusted for inflation – after earning $2.9 billion).

Hollywood studios have found it harder going in getting clearance to release films in China in recent years. There hasn’t been a Chinese release for a Marvel movie since 2019, for instance. And the only American-made films to get the green light this year were a Minions sequel and Sony Pictures’ Where the Crawdads Sing.

With the The Way of Water now set to open in China, the sequel will hope to benefit from deep-seated enthusiasm from fans of the first film. Director James Cameron also has a strong fan base in China. While Titanic didn’t appear there at the same time as the rest of the world, it had a limited release in 1998 and has played on Chinese TV networks. When the remastered 3D version was distributed in 2012, it grossed $58 million in its opening weekend.

The new Avatar film stars Zoe Saldana, a record-breaker in her own right due to her feat of appearing in three of the five highest-grossing films of all time – Avatar, Avengers: Infinity War and Avengers: Endgame. She’ll be hoping The Way of Water adds to that haul by taking a place in the top five too.

China’s cinema bosses will just be hoping that the film brings customers back to their theatres, after a long absence for many of the most popular international titles. “Even though most of the cinemas in Beijing are still closed, operators are all very excited after receiving the good news [about Avatar 2]. After all, since the National Day, there haven’t been any new blockbusters hitting the market. And while they still have to wait for more than half a month, the major cinema operators have started making preparations and hosting meetings to discuss marketing strategies, pricing and other matters,” Entertainment Capital wrote.

The biggest box office performer so far this year is the patriotic war flick The Battle at Lake Changjin 2, which made Rmb4 billion in ticket sales.

Yet movie industry analysts have been warning that a single film is unlikely to resuscitate the sector completely, even a blockbuster from the Avatar franchise.

As of early December, only 42% of the country’s cinemas were in operation and total ticket sales in China were just over $4 billion for the year, down more than a third from the same point in 2021 and less than half of what they were during the equivalent period in 2019, the year before the pandemic year.

More cinemas have opened their doors again after the government eased some Covid-19 controls, ThePaper.cn reported on Tuesday, with major cities such as Guangzhou, Zhengzhou and Shenyang allowing venues to reopen with limited capacity.

The wider situation is still unclear, however, as city authorities respond to a changing response to the pandemic from the the central government. “It’s very hard to predict the box office right now,” Jimmy Wu, chief executive of Lumiere Pavilions, one of the leading premium cinema chains, told Hollywood Reporter. “It all depends on the lockdowns – and we have no idea exactly what the lockdown situation is going to look like across the whole of China next week.”

“If you put all your hopes on Avatar 2 to save China’s film industry, that may be wishful thinking,” adds Entertainment Capital.

And yet the film’s producers will be counting on a strong performance in China. James Cameron says that the sequel was “very [expletive] expensive” to make and that it needs to be the fourth or fifth-highest grossing film in history to get to breakeven… 

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