HONG KONG — The multiplexing of Southeast Asia is clearly having an effect. Last year, while most of the world went into B.O. retreat, Malaysia, where cinema building has been rapid, experienced a 32% growth spurt.
In Vietnam, new complexes being built by Envoy Media-backed MegaStar have begun to broaden a small and sclerotic market. This allowed distributor UIP last month to switch local releasing partners and to shift from flat fee sales to a more modern revenue-sharing system.
Next in line for a sea change could be Indonesia, where a near-monopoly in the exhibition sector was handed to the 21 Group in the years following the fall of the Suharto dictatorship. While 21 Group has not been idle in adding small, in some cases highly luxurious, cineplexes, upstart group Blitz is now building the country’s first genuine eight-screen, and in some areas larger, multiplexes.
Vietnam, Indonesia and the Philippines have some way to go to catch up with regional market leaders Singapore and Thailand. The city-state of Singapore not only has high screen density, it has a high annual attendance rate of 3.6 visits per person and boasts 27 screens equipped with 2K digital projectors out of a total of 156 in the country.
Thailand’s growth spurt may now have peaked, but the country has seen screen numbers almost double over the past 10 years, and auds have followed. Merger of Major Cineplex and EGV in 2004 created one of the largest circuits in Asia — 260 screens out of Thailand’s 550.
New building has given the opportunity for local films to expand their potential, which, as many territories have shown, then drives B.O. and film attendance to new peaks. Last year, Malaysian films grabbed 11% of their local market and Thai movies 35% of theirs.
But the exhibition picture, like most other business sectors in the region, is far from uniform. The Philippines has one of the largest circuits around (SM Prime), but new screens have merely replaced old ones and local industry has continued a long-term decline.
To keep growing, developers need to keep building — Malaysia added three new multiplexes in 2005 and is due for another big one at the end of 2006. But they cannot simply wait for demographics and macroeconomic conditions to deliver them a bigger market. Plexes are also a capital-intensive business serving a smallish segment of the population. Much of Southeast Asia cannot afford the price of cinema tickets, and poor rural populations are not near the shopping malls where hardtop construction is concentrated.
The region’s exhibs also need to find ways to persuade potential auds to watch movies in cinemas rather than on TV or on discs that are often pirated.
Katharine Wright, analyst at Dodona Research, is confident they will. “South East Asia … is set to continue to be among the world’s fastest-growing cinema markets.” In Malaysia, Singapore, the Philippines and Thailand, she forecasts growth of 30% between now and 2010, producing a market worth $440 million.