During this week's first-ever Virtual Cannes Market, studios and distributors from China have been tuning in, but they aren't expected to be the aggressive buying force that they had become in recent years past.
"In a way, this virtual Cannes gives us hope, because there have been a lot of great projects presented, actually, and we can see that the global film industry is still alive and well," says Cai Gongming, CEO of Road Pictures, which last year bought all China rights to Terrence Malick's A Hidden Life and Pedro Almodovar's Pain and Glory. "But to be honest, I don't think many Chinese companies will be buying titles this year at all," Cai adds. "Our industry has been hurting badly for half a year already, and everyone needs to be very careful with their finances right now — the small and medium sized companies for sure, but the big ones too."
In mid-March, Beijing regulators appeared to have settled on a province-by-province phased reopening strategy, giving approximately 600 cinemas in the least COVID-19-affected regions of the country the green light to reopen. Within days, however, they were ordered reshuttered, reportedly at the direction of senior central government authorities who were concerned about the prospect of a second outbreak. The industry went back into waiting. In early May, reopening again appeared imminent. China’s top administrative body, the State Council, publicly stated on May 8 that indoor entertainment facilities, including cinemas and live music venues, could resume business nationwide. Yet no instructions for precisely when and how the reopening should be undertaken were ever provided, keeping theater operators in limbo, awaiting further guidance from officialdom. Then, on June 11, Beijing discovered a fresh cluster of locally transmitted COVID-19 infections at a food processing facility, prompting the city's health authorities to again order cinemas to remain shut.
In the meantime, there have been local media reports that hundreds, possibly even thousands, of small and mid-scale film and exhibition companies already have gone out of business.
Major studios also are scrambling to shore up their balance sheets. Leading private studio Huayi Brothers Media, which inked a cornerstone distribution and financing deal on Roland Emmerich's $150 sci-fi project Moonfall at Cannes last year, reported a net loss of $20 million in the first quarter of 2020 (sources close to the company tell THR that, aside from shopping a few of its own Chinese titles, the company is sitting on the virtual sidelines of this year's market). Wanda Film Holding, China's largest exhibitor, issued just shy of $300 million in bonds back in March to maintain working capital.
Industry figures in Beijing are growing increasingly worried that by the time the shutdown ends, long-lasting damage already will have been done.
Rance Pow, president of exhibition consulting company Artisan Gateway points out that no official data on cinema closures has been released in China yet. But the China Film Association recently conducted an informal survey of China’s 19 leading exhibitors. "They found that over 42 percent of cinemas are facing serious challenges — possibly closure — due to COVID-19-related business suspension, suggesting about 5,000 cinemas could be affected, or 28,000 screens,” Pow says.
When the next attempt at a restart may come, no one knows. “The industry feels very much in the dark,” says the Beijing theater exec (who asked not to be named because of perceived risks of commenting on government health policy).
With Disney’s China-set Mulan remake rescheduled for worldwide release on July 24 and Christopher Nolan’s Tenet, from Warner Bros., to follow on July 31, China’s uncertain situation will soon reverberate back through Hollywood. Both projects were set up under the assumption of huge potential earnings in the Middle Kingdom. The bankruptcy wave affecting operable screens in China also could dent earnings for imported tentpoles and indie titles indefinitely.
“Sadly, I don't think we will be open in July,” says Jimmy Wu, chairman of Lumiere Pavilions, an upmarket theater chain with locations in over 20 Chinese cities. “But we're still preparing for it just in case we can."
Others in the industry worry movies may not return to big screens until deep into the fall.
Adds Pow: “‘Since there is no confirmed cinema industry reopening schedule, dating new films also remains in flux. ‘Must see’ films will be an important determinant of how the industry recovers, and as we’re into the summer period now, a chunk of the season is already lost.”
Source: The Hollywood Reporter by Patrick Brzeski
