Asian exhibitors gear up for CineAsia

Annual trade show in Macau to highlight regional growth

Related: SPE's Gareth Wigan named CineAsia "Visonary." Full story

BEIJING -- No matter how long the unemployment lines of the Great Depression, cinemas kept operating across the U.S., and Americans, in the worst economic crisis they had ever known, paid to see movies. That's what Jimmy Wu and theater owners throughout Asia are banking on as the exhibition industry enters an uncertain 2009.

"People still need entertainment," said Wu, chairman and CEO of Beijing-based exhibitor ChinaPlex. "Even during the 1930s, they went to see Shirley Temple."

Despite a tenuous global economy, Wu is far from predicting anything resembling a depression for the exhibition industry next year. Indeed, cinema operators in Asia will face significant challenges in 2009, but in most markets there seems to be plenty of local room to grow, regardless of an international economic slowdown.

Still, with CineAsia convening Dec. 9-11 at the Wynn Macau, Asian exhibition industry representatives face one of the most unsteady times ever. Although growth has been the rule across the region, the coming year might bring a slowdown, but not necessarily a recessionary situation.

In fact, throughout the region exhibitors expressed optimism for 2009. From established markets where local film industries have underperformed in recent years, to countries where even economic conditions will have a tough time slowing demand for modern cinema facilities, Asian exhibition companies are planning to expand across the board.

Additionally, in just about every Asian market -- except for the biggest, China and India -- Hollywood product is carrying the day. Although some markets vary, based on the strength of their local industry, Hollywood films are indirectly leading this unlikely expansion in many countries.

"I don't see any slowdown in audiences," Wu said, adding that ChinaPlex next year will open 13 locations, upping its screen count by about 100.

For India, a growing market driven by local-language productions, 2009 will be another year of expansion. "We have the highest number of screens in the world," said CineAsia's 2008's Exhibitor of the Year, Tushar Dhingra, COO of Big Cinemas, the recently unveiled theatrical division of studio Adlabs. "Screen penetration in India is 12 screens per million people. In the U.S., it's 120 screens per million.

"Cinemas affect every sector of society (in India). Television content, music, newspapers, everything is fed back by movies," he added. "India's GDP is growing at 7%. There will be double-digit growth for the next 10 years for the demographic of 18-35."

Elsewhere in Asia, the exhibition sector is a mixed bag. In Hong Kong, for instance, the film industry might be in decline, but the exhibition sector is on the upswing. "Purely from a film standpoint, (2009) looks great," said Bob Vallone, director and GM of Lark International Multimedia, which owns the UA Cinemas and Studio City Cinemas chains. "There's good potential for it to be a very good year."

Vallone said that cinemas are in demand in Hong Kong as "anchor tenants" for commercial properties. "Landlords have been very enthusiastic" in attracting cinema tenants, he added.

The news out of Korea is less encouraging. Since the so-called "Korean wave" has crested, the poor recent performance of domestic films has led to local films declining from more than 63% of total boxoffice in 2006 to 41.4% for the first eight months of 2008. "A crisis like a Great Depression" is how Korean Film Council chairman Kang Han-sub described the situation at the Pusan International Film Festival in early October.

The year also could be a good one for exhibitors in smaller, less-developed countries. "I think we're going to have a pretty good 2008," said Irving Chee, GM of Malaysia's Golden Screen Cinemas. "I think industry-wise we're growing about 19% for the first 10 months of the year, although with the current economic scenario we expect that number to trim down. We still hope to have around 10% growth next year."

Malaysia has 444 screens at present, with Golden Screen operating 161 of them. The company plans to add 24 new screens in 2009, with the rest of the industry in the country opening another 60-80, though economic conditions might push the number toward the lower end of that range, Chee said.

Hollywood still is the main boxoffice draw in Malaysia, followed by films from Hong Kong, India and China.

Low ticket prices could put a squeeze on cinema operators in Malaysia, where the average admission is less than $3, including a 25% entertainment tax.

"It makes it very difficult in the current environment, as it's difficult to raise ticket prices," Chee said.
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