In the $930 million deal announced on Monday, Wanda fully owned subsidiary AMC Entertainment will acquire Stockholm, Sweden-based Nordic Cinema Group Holding AB, adding another 600 screens to its sprawling chain that operates nearly 1,400 cinemas with 15,000 screens across the globe.
The company is betting that the multitude and reach of its theaters, which include chains in the U.S., Europe, Australia and China, will give it the distribution power to promote one of its other main businesses in movie production.
Wanda is already the world’s largest cinema operator, with 12% of the global market, and Chairman Wang Jianlin has set a goal of 20% by 2020. He has said such a strategy would give Wanda a global film distribution network capable of competing with the current “big six” Hollywood studios.
However, analysts say the distribution strategy, part of Wang’s dream of building a global entertainment empire, has so far shown less-than-stellar results.
“Wanda’s domestic distribution has been quite disappointing,” said Ding Daoshi, head of research at Sootoo, a consultancy in Beijing.
He took Wanda’s recent $150 million joint production The Great Wall as an example of how having big distribution capacity doesn’t always translate to a big box office. Produced by Wanda subsidiary Legendary Entertainment, the historical monster flick has reaped a mere $170 million after 40 screening days, well behind the $430 million box office it needs to break even.
“Despite the film’s high theatre penetration, The Great Wall’s box office performance has been only mediocre,” Ding said. “The Chinese audience has smartened up and won’t pay for bad quality.
Attempts to buttress failing films with increased exhibition will only look foolish and desperate.”
Ding added that though the strategy of bigger distribution may not work, Wang sees it as a crucial step to reinventing his real estate empire into China’s equivalent of the Walt Disney Co. “He sees films as the centerpiece of his future empire,” Ding said. “Built upon the film themes, he wants to open theme parks, resorts and commercial property.”
As China’s richest man, Wang wants to build China’s first global entertainment company, including a diverse empire of theme parks, sporting events and movies. His latest cinema purchase comes months after AMC’s acquired Europe’s largest cinema line Odeon & UCI for $1.2 billion, and U.S. cinema operator Carmike.
Source: Caixin by April Ma