Smart Cinema CEO suggests film industry reform amid crisis

By Zhang Rui
0 Comment(s)Print E-mail, May 17, 2022
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Jack Gao, a veteran executive, and CEO of Smart Cinema, called upon the general public and the film industry to find ways to increase audience visits amid the current market crisis caused by the COVID-19 and many other factors.

Dr. Jack Gao, CEO of Smart Cinema. [Photo courtesy of Smart Cinema]

"How can we attract more people to the cinema? First, we must create good works constantly, and second, we must also follow the trends of the times. Now is not the time to be completely desperate, but to think about how to reform," he said.

In recent months, the pandemic outbreaks across China, especially in Shanghai and Beijing, have closed more than half of cinemas nationwide. In April, the daily total of all films screened in China reached as low as less than 8 million yuan ($1.17 million). Meanwhile, a lack of new blockbusters and content is further exacerbating the problem 

Most studios are waiting for things to get better, but many cinemas are pessimistic, with income now unable to cover expenses. China's movie box office enjoyed a little bounce over the May Day holiday amassing 297 million yuan, but that's still a significant drop on a year-on-year basis compared to 1.67 billion yuan generated during the holiday last year. Nevertheless, this signals hope. 

According to ticketing platform Maoyan, the film market is steadily recovering day by day after the holiday. More than 69.27% of Chinese cinemas have since reopened their doors, though cinemas in Beijing and Shanghai are still shut.

"Is the movie business over? I don't think so. The movie industry has gone through several crises in the 100 years ever since its invention. There are highs and lows, but in general, it only gets better and better," Gao said.

In his opinion, the Chinese market saw monumental growth over the past decade, thanks to "hot money" and venture investors, real estate companies developing properties, including cinemas and internet giants, which helped expand the market through ticket subsidies and developed technological conveniences for moviegoers.

"Movies have become a part of our lives, and everyone talks about the blockbusters," Gao still remembered how he helped introduce James Cameron's "Avatar" into the Chinese market when he worked in News Corp., which then owned 20th Century Fox. He saw how the phenomenal performance of the film ignited Chinese people's enthusiasm for movies. After that, more and more people entered the business. 

"Remember, the biggest Chinese film 'The Battle at Lake Changjin' grossed more than 5 billion yuan, which means people made just more than 100 million admissions to cinemas to see the film. But in China, we have 1.4 billion people in population total. There's still huge potential."

Gao believes that Hollywood is divided by streaming services, as major studios and streaming giants are doing their own brands, while the content falls into different apps and services. "You have to subscribe to various services to see all your favorite films, and that's a big expense for normal people. Furthermore, if subscribers decrease, the stock market decline will force the streaming giants to cut the budget and lower the quality," he said.  

He noted that China has managed to increase screens, but attendance is no longer increasing, making it difficult for cinemas to survive. 

"The pandemic pushed the 'pause' button for us and has fostered consensus about integrating online and offline screening," he said. His venture Smart Cinema is an impressive innovation attempt, founded in 2018, which can stream movies via mobile phone as an online theater screen by selling tickets per movie as a real cinema does. 

Gao insisted on keeping the theatrical release model but called for adding a layer of online streaming services to the theaters, using mobile technologies to empower physical theaters to create a "super cinema" model.

A staff member disinfects the seats in a cinema in Jinan, Shandong province. The movie theaters resume business in the city on May 12, 2022. [Photo/VCG]

"For the box office model, the audience will have a say in a film's success by buying or not buying tickets. But if we rely on internet platforms, they will have the say and control, and they will become producers and distributors simultaneously. This would make the movie business comfortable but less innovative. We must make sure that the movie, a product to meet people's spiritual demands, always goes on a road that pursues innovation," the executive stressed.

"Consumer demand for movies is growing, as is the mobile lifestyle after the pandemic. Meanwhile, entertainment consumption is becoming more diversified, so movies must find ways to stand out. The movie industry needs to be reformed and changed to reconnect with the public in the future," he added.

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