More Seats for Bums – Hong Kong’s Theatrical Sector Returns to Life

The Hong Kong film industry has been experiencing hard times since the 1990s. Its problems are not only reflected in the decrease in the number of local productions and shrinking box office receipts, but also in the fortunes of the local exhibition business. Although Hong Kong cinema’s market share has continued to fall, the number of screens has increased over the past few years. It declined during the first decade of the millennium, but it is now regaining strength.

Hong Kong used to have a strong exhibition sector. According to the government’s records, in 1993 there were 119 cinemas in Hong Kong with a total of 188 screens, providing a total of over 120,000 seats. But the number of cinemas gradually dropped. In 2013, there were only 45 cinemas with 194 screens, and only 36,000 seats. This means in a 20-year period, Hong Kong lost 60 per cent of its cinemas and 70 per cent of its cinema seats.

Hong Kong’s high property prices were a major factor behind the closure of cinemas. Most of the cinemas were located inside shopping malls, and landlords thought that renting the space to famous stores would get a better return. So cinemas either closed, or were forced to move to less attractive locations.

Additionally, a policy which required a certain amount of cinemas to be built as part of urban planning rules was dropped, and this resulted in a large-scale closing of cinemas around 1997 to 2000. The total dropped by 40 per cent, from 100 cinemas to 60. The figures remained that way until 2013, and Hong Kong had the one of the lowest proportions of cinemas per head of the population in Asia. In 2013, cinemas became unevenly distributed. Over 28 per cent of the seats were in the West Kowloon shopping area, and some districts had no cinemas at all.

Since then, there has been a big change in the exhibition business. Between 2013 to 2018, the number of cinemas increased from 43 to 56, a net increase of 13 cinemas.The total number of seats has bounced back to over 40,000 seats.It’s also interesting to note that most of these new cinemas were not located in the major business or shopping districts.They were close to residential areas,like the cinemas in the 1980s.

Eight locations were already used for cinemas, and were redeveloped. Some of these cinemas only had one or two screens, and they were being split into four or five screens. This increases the choice of movies for the audience, and also makes it easier to fill up the cinema.Together with more comfortable seats and competitive ticket prices, they hope to draw audiences back from going to cinema in the city centre. To build customer loyalty to these cinemas, they usually start out with extremely low introductory ticket prices, and they organise community events to bolster regular attendance.

There are a few reasons behind the increasing number of cinemas. Firstly, the change in the property and rental market.The extremely high rents resulted in high prices, which depressed sales in shops. Cinema rental becomes more affordable when rents decrease.What’s more, landlords enjoy the guarantee of steady rental, as cinema leases tend to run for 10 years. This kind of security makes landlords feel more comfortable in a declining property market.

There are more cinema circuits entering the market.In 2010, there were five major cinema circuits: Broadway, United Artists, Multiplex Cinema, Golden Harvest, and Newport. In mid-2013, Cinema City, under Pegasus Entertainment Holdings, started their first cinema by taking over the best performing theatre, UA Langham Place in Mongkok, and renaming it Cinema City Langham Place. Cinema City expanded their cinema network to five theatres in two years. Pegasus moved into the cinema business to develop and strengthen their distribution business. With their own cinemas, Pegasus can more easily distribute their own productions.

The strategy seems to be shared by Emperor Movie Group, one of the major distributors,and a big local producer. Emperor entered the cinema business by transforming two floors in a shopping mall from a CD store to a five-screen cinema.Although Emperor only runs two cinemas, it’s expected that it will open at least threemore this year, and this will turn it into a player in the local market.

It’s expected that there will be at least four more cinemas opening in Hong Kong this year, three of them located in residential areas. In addition, a 12-screen cinema, including IMAX, is expected in the heart of the Tsim Sha Tsui shopping area. It seems like the cinema scene is going to continue to develop in a healthy way for the foreseeable future.
Ryan Law