Source: China State Council Information Office 3
Most Chinese people don’t go to the cinema, and at the same time, many Chinese movies never see the big screen. But a mobile cinema venture could solve these problems, Smart Cinema CEO Jack Gao told China.org.cn in a March 13 interview.
Empty theaters and unwatched films
According to the executive, the Chinese film industry is booming but the huge market potential is yet to be realized, whether for domestic or foreign markets. The emergence of Smart Cinema is intended to solve three major challenges for Chinese film industry, which include limited theater coverage and declining audience visits to movie theaters. As Gao pointed out, “Nearly 80 percent of Chinese people don’t go to cinemas.”
As for the third problem, “Last year more than 3,000 film projects were registered and 1,080 films made. Only 36 percent of the finished films had the opportunity to go to cinema chains, and 65 percent of them never saw the light — didn’t reach a single viewer or sell a single ticket,” he continued. He explained that consumers today tend to prefer the flexibility of watching movies at home, rather than going at a fixed time to a fixed venue.
Gao voiced his concern. “The average attendance rate of Chinese cinemas last year was about 12 percent, a decline from 17 percent years ago, which means nearly 90 percent of seats in Chinese theaters are empty.” He went on to say, “But this is not only in China. Worldwide, the attendance rate in cinemas is declining year by year. So we have to increase ticket prices to support box office revenue, and this year’s Spring Festival season was very typical.”
These challenges have made him more passionate about the development of his Smart Cinema enterprise.
This new app could change everything
Dr. Jack Gao is an industry veteran. He was the former president of Microsoft China, and between 2006 and 2014 served as a senior executive for News Corporation, 21st Century Fox, Star China Media, Bona Film Group and Phoenix Satellite TV. From 2015 to 2017, Gao ran the overseas acquisition and operations of Wanda Cultural Industrial Group, as well as being the interim CEO of Legendary Entertainment and the director of AMC Entertainment Holdings.
Last year, however, he gave up all these past glories and announced the launch of Smart Cinema last May, a concept and app that, in his view, can disrupt, transform and complement the Chinese film industry.
“Smart Cinema, simply put, is part of the Chinese film screening system,” Gao explained. Unlike normal video streaming sites and video-on-demand services, Smart Cinema turns people’s mobile phones into screens in an innovative way and transmits new releases that have been approved by China’s film authorities and are being screened in theaters. Currently, films are put on video platforms months or even years after they finish their run in theaters, but Smart Cinema provides the chance for users to watch films on demand even while those films are in theaters, once the distributors agree to put the films on both platforms. The Smart Cinema app will be operated the same way as a theater, meaning one ticket buys a one-time viewing, and the income generated on the app will be automatically included in the official Chinese box office statistics, rather than as part of online streaming revenue.
An upgraded 2.0 version of Smart Cinema will be released on its first anniversary, May 9, 2019. According to Gao, virtual reality (VR) technologies will also be made available to give the users an unprecedented movie-watching experience, where they can watch the film with family and friends at the same time in a virtual “cinema” and have chats and other social communications when they all put on VR headsets. Gao also shared with China.org.cn that the company has also invested a lot of money and effort into anti-piracy control, and so far, not a single film has been pirated from Smart Cinema.
Smart Cinema has explored other possibilities as well. Not long ago, they worked with the Qingdao government on a film cultural event where residents can choose the app as a platform to watch 26 films screened only to residents of the city of Qingdao. More than 500,000 movie tickets were distributed to local citizens. At the same time, there were films targeting teenage audiences, and more than 15,000 students participated in a movie-viewing and review-writing event held by the local education department during their winter vacation.
Reaching new audiences at home and abroad
Gao added that China has 114 million people from ethnic minority groups, but only about 40 movies are made targeting them each year. “And there’s no showing arrangement for those kinds of movies in commercial theaters. We need to deliver these films to targeted audiences, and we can try to translate and dub mainstream blockbusters into minority language versions.”
Since it was launched, Smart Cinema has screened 107 films on its platform, mostly lesser-known features, ethnic minority films and art-house films. Though there are no blockbusters so far, Gao believes “the situation will get better and better, when the production companies and distributors see the potential and scale the Smart Cinema will develop into, they will have interest in putting their super blockbusters on our platform.” Earlier this year, the total number of tickets sold on the platform reached one million.
Gao also noted that one of his considerations in creating his mobile cinema venture is the 60 million overseas Chinese, “especially the kids studying in North America,” he said. “When a Chinese domestic production becomes a hit, they are dying to see it, but can’t find it on foreign websites due to overseas copyright restrictions. But their demand is huge.”
Based on his past experience, Gao knew the channels to distribute Chinese films overseas are monopolized by six major Hollywood studios, and that Chinese films could not reach the world effectively without a large-scale distribution channel. But Smart Cinema might provide a solution, as it has already landed in Italy and Spain and will be released for North America, South Korea and other markets later this year.
“Smart Cinema also has translated subtitles for all those Chinese films, which will help the films reach foreign audiences as well as overseas Chinese people. And you don’t have to find a screen in New York to present a Chinese film — all you need to do is just turn on your phone screen,” Gao said. He believes that as everyone has a mobile phone, Smart Cinema will help reshape the monopolized global film distribution system and help more Chinese stories see the light of day.