Movie industry still not out of the woods

The novel coronavirus pandemic has hit China's cultural industry, including the film industry, hard with cinemas being forced to down shutters in late January and remain closed for almost six months until July 20. Statistics show that about 6,000 cinema companies have gone out of business, and large numbers of movie studios have had to suspend work, and plenty of projects－from scriptwriting to post-production－have been delayed.

As many big production companies are grappling with the loss of business and drying up of capital, small and medium-sized cinema companies and movie studios face high risk of bankruptcy. The struggling film industry is in need of financial support, but judging by the lessons from the past, the government should not provide indiscriminate financial help for the movie and movie-related companies without determining their quality of work and development prospects, so as to prevent bubbles in the sector.

It is unwise to pour huge funds into the cultural industry in the hope that more capital input will lead to better development and faster growth, especially because even before the pandemic broke out, the industry was facing overcapacity.

On average about 1,000 movies are made in China annually, but 80 percent of those do not get access to cinemas because the cinema operators look for potential box office blockbusters to screen. Also, four of the five films screened lose money, giving rise to frauds and speculation at the box office. For example, by purchasing huge numbers of tickets for their own movies, some film companies inflate their revenues and claim their movies are box office hits. As a result, the shares of these companies rise in value－which means they spend relatively small amounts on tickets to make huge gains on the stock market.

Also, the fact that a number of cinemas simultaneously screen the same movie has reduced the audience to about 15 percent per show on average over the past decade.

There is also a surplus of movie theaters. In the densely populated regions of central and eastern China, there is at least one cinema within three kilometers. The number of cinemas is higher in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, and some developed cities along the east coast.

But despite dealing a heavy blow to the film industry, the pandemic has also created an opportunity, which the industry should use to cool down the false craze and clean up the sector by, for example, abandoning inferior projects and investing in quality and promising ventures.

Thanks to the pandemic, some movies－originally scheduled for screening during Spring Festival－were released online. This new, online release trend has made industry insiders hopeful that films can do good business, if not make huge profits, even without being released in traditional cinemas.

But such optimism is uncalled for. The online market is not big enough to cover the high cost of film production, especially because a good movie costs 200-300 million yuan ($28-42 million) to make. And although Chinese film companies bring Hollywood blockbusters to the domestic market to boost their earnings, they have to share the revenues with their foreign counterparts and pay much of the film distribution costs.

The boom in digital technology, including online release of films and livestreaming notwithstanding, much more efforts are needed to upgrade the whole industry. Besides, the reopening of movie theaters does not mean we can relax our vigilance against the virus, as new clusters of infections can break out at any time. That's why the authorities have restricted the audience to 30 percent of a cinema's total capacity for all shows. And given the costs of manpower and electricity, and other overhead costs combined with the uncertainties, Chinese cinemas are under immense pressure to just live out the health crisis.

The closure of cinemas early this year has compelled many filmmakers to delay the premiere of their films, including highly anticipated ones such as Leap, the story of the Chinese women's volleyball team which has won several gold medals including at the Olympic Games and the World Championships.

Let us hope there is no new outbreak in China, so competition among cinemas can intensify, and in the post-pandemic era, low-cost commercial movies with realistic themes and literary contents can lead the mainstream film industry's revival.

The views don't necessarily represent those of China Daily. The author is a researcher at the Chinese National Academy of Arts.