China: Beleaguered Beijing (& Politics) Key To Reopening Cinemas Nationwide; Could Shanghai Spur Kickoff?

EXCLUSIVE: While many offshore markets are showing increasing signs of life as cinemas return, there are still several question marks surrounding when the majority of the world gets back to the theatrical business – chief among them for the international box office is China.

There has been some chatter that Middle Kingdom movie theaters may resume operations in July, though it’s thought the chatter may be related to the Shanghai International Film Festival. Deadline has heard that SIFF, which in May said it was postponing its original June dates, is eyeing a tentative late-July kickoff. That could mean screens there open up for the fest. That could also potentially lead to an early-August ramp up for the rest of the country. Still, it would take a lot of work and nothing as yet is clear.

To be sure, in order for a nationwide re-start, eyes are fixed on what’s happening in Beijing given the recent reemergence of coronavirus cases in the capital which doesn’t want to be seen as having botched its handling of the crisis. As USC professor Stanley Rosen tells us, “The whole country runs on Beijing time… It’s all about social stability, which ensures political stability, so the film industry becomes collateral damage in that calculation.”

China still has “no timetable for reopening,” Jerry Ye, Chairman of Huaying Tianxia (Tianjin) Film Development, said during the Cannes Virtual Market last week. Matters have been complicated “especially now with the situation in Beijing. The priority is about the safety of moviegoers.”

Rosen says that Beijing is key to getting movie theaters back online. “The authorities were shaken by the (recent) Xinfadi market cases… At first they tried to blame it on imported salmon and destroyed all the salmon in the supermarkets, but then they had to admit it was not the salmon, but probably the chopping board where the salmon was cut. If you can’t blame the foreigners, then China has a problem, which makes their domestic audience particularly concerned with what might really be going on in a country without transparent information.”

However, while it does seem that the virus cases are very localized and that most activities are getting back toward something resembling normality, authorities “are being very careful about entertainment venues, particularly indoor entertainment,” Rosen notes. “They don’t want to announce a date and then have to be embarrassed by another postponement.”

Tier 3 and 4 cities are faring better with the virus, but Rosen opines that one reason they don’t want to open cinemas in those areas “is that it shows the whole country that Beijing, the capital, has handled the virus situation worse than other areas, calling attention to the city and national leadership’s failures. Then of course, if they start showing blockbusters outside Beijing, what would prevent people from Beijing traveling to those cities to watch them? Not only is it a loss of face for Beijing… but could also spread the virus elsewhere.” 

Cinemas have been closed since late January in the world’s second largest box office market, and estimates are that grosses will be down by at least $4B in 2020, a number that could rise if theaters don’t come back soon.

Whatever happens this summer, it is thought that the powers that be want to ensure cinemas are ready to open by National Day on October 1 which is typically a period of propaganda movies.

Then of course there is the issue of some exhibitors and film companies being unable to ride out the shutdown. Ye said last week, “If we miss National Day, I don’t know for most producers, distributors and exhibitors how they can deal with the situation.”

Rosen notes that while the Chinese government has provided some subsidies to Beijing theaters — less than the 5% generated by the tax on theaters while they were still open in January — “That is not nearly enough.”

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