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Why Asia’s movie rebound is good news for everyone

Just as in the US, theaters in Asia-Pacific closed thanks to Covid. But the region has shown that worries of streaming services eating into the market share are premature.

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Has the pandemic dimmed the houselights for good at American movie theaters? Stay-at-home orders, capacity limits and simple fear of the virus have kept cinema crowds away for nearly a year. So, too, have studio decisions to delay the release of anticipated blockbusters. Last year, the North American box office declined to its lowest total since 1981 (when “Raiders of the Lost Ark” was the top draw). Now theaters are flirting with bankruptcy while hoping that they haven’t lost their fans forever.

The good news? The picture could hardly look more different in Asia. Although similar worries had plagued the region’s movie business at the start of the pandemic, audiences are now piling back into theaters and spurring record box-office hauls. In China, where the government says that Covid-19 is mostly under control, the take for the first 10 days of January surged more than 50% over the same period last year. In Japan, Imax Corp. is reporting record weekend attendance. From India to Taiwan, there’s been a similar surge in theater-going.

Is there anything the U.S. could learn from this unexpected feel-good tale?

In truth, American theaters weren’t in good shape even before the pandemic. The rise of streaming services and other entertainment (such as gaming), was eating into an industry that had grown increasingly dependent on a small number of blockbusters. In 2019, U.S. ticket sales fell by 4.4% to $11.4 billion, the biggest year-over-year decline since 2014.

Still, there was reason for optimism. Through March 1 of last year, the U.S. box office had earned $1.6 billion, 7.3% ahead of 2019. Thanks to a slate of expected blockbusters, from a new James Bond film to a much-anticipated remake of “Dune,” the rest of the year was looking up too. But as the pandemic set in, studios began pulling back and delaying big-budget releases, including the Bond film. By mid-March almost every U.S. theater screen was dark, with no timetable for re-opening. In April, Universal Pictures announced that it would bypass theaters altogether and release “Trolls World Tour” right to home video. Other studios soon followed.

All told, it threatened to be a mortal blow. With audiences stuck at home, subscriptions to the biggest streaming services increased by more than 50%, according to one estimate. In response, the film industry and cinema fans agonized that customers might never want to return to the days of crowded auditoriums and overpriced popcorn.

As Asia has shown, though, those worries were almost certainly premature. Just as in the U.S., theaters in Asia-Pacific closed thanks to Covid, and there was plenty of pessimism about their prospects for re-opening. But then a few things went right. One critical factor was a competent coronavirus response from many regional governments, including mass testing, adequate protective gear, contact tracing, tough quarantine measures and early travel restrictions. Widespread compliance with masking and other safety directives also instilled confidence in businesses and consumers.

But perhaps the biggest factor was a surge in good local films. In the absence of Hollywood fare, “The Eight Hundred,” a Chinese war epic, became the world’s top-grossing movie with a $460 million take. Japan’s “Demon Slayer” grossed $337 million, good enough for fifth place globally. “Peninsula,” a Korean zombie film, was likewise a huge regional hit. In a down year, the Asia-Pacific region accounted for about 51% of global ticket sales, compared to 41% in 2019. By the end of 2020, Chinese sales had surpassed $3 billion — enough to top the U.S. for the first time.

For America’s movie theaters, that should actually be welcome news. As vaccines roll out, and Americans venture back into public spaces again, Hollywood will be waiting for them with an unprecedented backlog of big-budget films competing for their attention and wallets. Not every Netflix subscriber will get off the sofa and head to a theater, of course. But the pent-up demand in countries like China and Japan shows that even in an era of personal screens and screenings, millions of people still want to share in the experience of watching movies together.-Bloomberg

Also read: PVR woos Bollywood producers to bring films back to cinema halls from Netflix, Amazon


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