Biz blues may run deeper than per-plexing answer

Taiwan film market plunges

Battered by typhoons, earthquakes, an ailing economy and growing homevideo piracy, Taiwan is in danger of slipping from its perch as one of the world’s top 10 markets for Hollywood films.

Despite the downturn, exhibs and distribs are confident the market will rebound, with a slew of cinemas being built and developed after years of inaction.

Last year, Taiwan ranked as the 10th most lucrative territory outside North America for the U.S. majors, generating film rentals of about $72 million.

But in the first half of this year, the studios’ take plunged by 28.5%. One U.S. rep blames the deteriorating economy as well as DVD and VCD piracy. Another factor is a shift in business to well-financed indies such as Spring Cinema, which struck gold with Mel Gibson starrer “What Women Want,” and Mata.

Nationwide, ticket sales plummeted by 40% through the end of August, according to Spring general manager Oliver Chen.

Some exhibs say that while the attrition rate isn’t that severe, the downward trend is clear. United Cinemas Intl. president-CEO Joe Peixoto calculates admissions totaled 20 million last year, down from 25 million in 1999. He projects this year will wind up with around 18 million. For a population of 20 million, that means an average yearly rate of less than one cinema visit per person. With about 600 screens, the territory is underserved.

Another exhib estimates attendance in the capital city, Taipei (which reps about 80% of the territory’s B.O.), are off by 18%-20% this year.

Developing multiplexes has been a laborious process due to the scarcity of land, lack of major retail centers in cities outside Taipei and delays in getting planning permits.

The Warner Bros./Village Roadshow co-venture opened a 17-screen theater in Taipei — Taiwan’s first multiplex — in 1998. On Nov. 1, the partnership will bow a 10-plex in Kao-hsiung in southern Taiwan. It’s readying five cinemas for next year and two in 2003, which will give WB/Village a total of 97 screens in nine locations.

Village Roadshow managing director Graham Burke is bullish about Taiwan’s potential, likening it to South Korea, where the B.O. has spurted in the past few years, fueled by new screens.

“Audiences in Taiwan love U.S. pictures, and a large section of the population are fans of Chinese movies,” Burke says.

Last October, UCI unfurled an eightplex in Tai-chung, which Peixoto says will clock 1 million admissions in its first 12 months — exceeding expectations.

UCI aims to build at least two multiplexes in the next two years. Cinemark is due to launch its first site in Taipei next month.

“We’re taking a cautious approach,” Peixoto says. “We need to test the depth of the market. We don’t know whether it’s a growth market or whether multiplexes are redistributing audiences from existing (and aging) cinemas.”

Chen agrees: “The market’s potential will grow because the multiplex is a new concept and a revolution in Taiwan. But grosses overall won’t rise in the short term because grosses at existing cinemas will decrease faster.”

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