On April 29, China Film Bureau (aka. the National Film Administration) conducted a virtual meeting regarding the country’s film industry and its future in the context of COVID-19.

In March, there was a short period when cinemas across the country attempted to re-open, including several arrangements for re-release titles (both domestic and foreign). The Shanghai Film Distribution and Exhibition Association was ahead of many regional film departments to issue a guidance to support such attempts. However, after about 5 days, the central Bureau ordered all cinemas to close again, to avoid a second wave of virus outbreak.

As revealed in the meeting, the China Film Bureau sees current temporary disruption brought by COVID-19 as a turning point to reform the country’s cinema sector. What are the key messages from this meeting?

State owned film companies are encouraged to support private firms and their recovery. This also means that State owned companies will recover quicker than private ones, due to their background and more stable capital.

A restructuring of cinema chains and cross-regional mergers are inevitable. Back in March, Shanghai Film Group led the way to propose a strategy to acquire smaller cinema businesses with a specially launched investment fund. In 2018, there was also a recommendation published by the Bureau to further set out industry standards for cinema chains. For instance, one of the standards refers to a chain which should not have less than 50 cinemas across the country. It should have no less than 300 screens and an annual box-office of at least 500 million RMB. Currently, there are 48 cinema chains in the country but it is predicted that 2/3 of them do not meet this criteria. The pandemic will further speed up a reform in particular through necessary mergers and acquisitions. This development, from the Bureau’s perspective, will bring positive improvements to the industry.

It is the Bureau’s aim to further encourage the development of alternative business models such as “the people’s cinema” (cinemas that are dedicated to screen main melody films), the National Alliance of Arthouse Cinemas and also on-demand cinemas. The last model will be further explored in a future commentary.

The Bureau is also committed to safe guard theatrical windows. Since late January, more than 4 theatrical releases moved straight to platforms for its distribution. There will be more similar cases not only in China, but globally. Such an action has caused controversy and anger from cinema operators. Although showing its concern, the Bureau has not announced an official policy to tackle such issue. So far, there is yet a regulation in China for a set theatrical window but the usual practice is round 3 months. However, the Bureau signals that a related regulation will soon be announced as an intervention to better protect cinemas.

The Bureau continues to be committed to further promote the export of Chinese films internationally, in particular via overseas theatrical distribution. It has also acknowledged how recent successes of PARASITE have made this ambition more challenging and competitive.

The Bureau encourages regional film departments/offices to further support the cinema sector via their own tailored policies. Companies should take advantage of finance services provided by banks, supported by different local governments. If cinemas are renting from State owned properties, they can entitle free rent for 3 months as announced earlier in March. Local specialised film funds can also be loaned to companies with no interests.

While Beijing International Film Festival has recently moved online, Shanghai International Film Festival is still fighting for this year’s edition but with a possible delay to August.

Now that lives are slowly returning to normal in China, my prediction (also from industry stakeholders) is that cinemas will officially allow to be re-opened in early June. For many symbolic reasons, it has to be after the Chinese People’s Political Consultative Conference (the two sessions meeting/Lianghui), which will take place between May 21 and 27 in Beijing.

The key turning point that we face here is not only for China’s cinema chains to be restructured. This is also an opportunity to encourage the country to further open its market for foreign imported films and to relax its distribution mechanism. Such a delicate proposal needs to be expressed diplomatically, with a sensible and encouraging language, of course.

For another report on the same topic by the Deadline please click here.