Warner muscles in on China’s plex flex

Chinese B.O. to triple in five years

HONG KONG — Mainland China’s B.O. will more than triple in the next five years, but Warner Bros Intl. Cinemas is the only U.S. exhib chain in the country positioned to profit from that growth, according to a study.

“Cinemagoing East Asia,” by analysts at U.K.’s Dodona Research, says the rise in China’s turnstile take from 2 billion yuen ($250 million) in 2005 to $925 million by 2010 makes the territory the fastest growing in the region.

That puts it ahead of Taiwan, which is on the recovery track, and South Korea, which is forecast to continue to grow strongly.

Dodona forecasts that East Asia’s five main territories — Japan, South Korea, China, Taiwan and Hong Kong — will jointly deliver admissions growth of 33% in five years.

However, South Korean and Japanese exhib chains are suffering, due to an aging population and are turning to China for corporate expansion. Chains already investing include CJ-CGV and Kadokawa.

Report also highlights high adoption rates for digital cinema. With more than 200 digital screens, China is a leading player. Equipment has been installed in upscale plexes and good locations.

“Digital cinema provides the best prospect for a more open industry in China, which is the key to increasing the supply of films, encouraging more investors and expanding the market,” said report author Katharine Wright.

South Korean and Japanese chains are also going digital. Megabox has digital in all 16 theaters of the world’s busiest multiplex, the COEX in Seoul; CJ-CGV plans to convert its circuit this year; Tokyo Recreation and Toei both have one digital system at each of their sites.

Report is gloomiest about Hong Kong, where industry is nowhere near as strong as it was a decade ago. But Dodona says the Film Guarantee Fund and the Closer Economic Partnership Arrangement with China offer its production sector hope for recovery.

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