Jack Gao, Wanda’s head of international developments, says that the giant Chinese group is unfazed by the recent slowdown of the Chinese box office and plans to maintain an aggressive pace of multiplex building.
“The slowdown was not a surprise,” said Gao, group VP and CEO of international investments and business development at Wanda Cultural Industry Group. He was speaking Tuesday at the Chinese-American Film Festival Summit and echoed many of the same sentiments at the U.S.-China Film & TV Expo summit on Wednesday at L.A. Live. “We didn’t expect it to happen so fast, but you know what, it is a good thing.”
China’s theatrical box office had grown in an almost unbroken upswing for almost a decade, hitting an astonishing 49% growth rate last year, to finish 2015 with a total of $6.8 billion. This year started brightly and further records were broken at Chinese New Year in February. But from June onward revenues have flatlined and the year will likely end up with single figure or low double-digit percentage growth.
Cinema-building this year means that some 8,000 new screens are likely to go live this — down from an even higher figure last year. By the year’s end, the total in operation could come close to 40,000, putting China almost on a parallel with North America, albeit with a population of 1.3 billion, compared with North America’s 300 million-plus.
“Wanda will continue to build around 1,500 screens per year for the next decade,” said Gao. Its Wanda Cinema Line division is already China’s largest private sector cinema operator. “We see box office growth of a sustainable 15% per year over that time. That will make the China market possibly 2.5 time bigger than the U.S. The number of screen count could reach 120,000 screens. We remain very optimistic.”
In another sign that Wanda intends to build its way out of the current situation, the company placed an order for 150 more Imax screens in August.
Gao also hinted that Wanda expects AMC, its U.S. exhibition subsidiary, to complete its acquisition of Carmike Cinemas by the end of the year.