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As Coronavirus Spreads, China Makes Costly Choice to Shut Thousands of Cinemas

Patrick Frater, Vivienne Chow and Rebecca Davis

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China closed swathes of cinemas on Friday in response to the outbreak of novel coronavirus, which started in the city of Wuhan and has now killed 26 people. The closures come a day after the distributors and producers of the seven major blockbusters that had expected to launch from Jan. 25 cancelled their films’ releases.

Chinese New Year is the commercial high point of the cinema industry year in mainland China, with well over $1 billion of box office revenue normally anticipated to flow through turnstiles in a week of celebration and family gatherings. It is also the peak time of year for internal travel, when typically half of China’s 1.4 billion population return to their hometowns to be reunited with family.

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To prevent the spread of the disease – which may have originated from bats, but now appears to involve human-to-human transmission – Chinese authorities have now put 13 cities in Hubei province into a form of lockdown. The quarantine measures affect some 33 million people, as the number of confirmed cases across the country has mounted to over 800.

Cinema chains closing their theaters include Wanda, Dadi, Lumiere Pavilions, Emperor, Bona and CGV. But, for the moment, the closures are not nationwide, nor total. China counted some 70,000 screens in 11,000 complexes at the end of 2019.

B. Riley financial analyst Eric Wold said that before the closures, IMAX cinemas in China were expected to contribute about 43% of IMAX’s total global box office in the first quarter — about 10% more than the annual average contribution because of increased sales during the new year holiday.

“While there is always the chance that this is a short-term reaction to the coronavirus outbreak, and these theaters could re-open shortly should conditions improve in the country, we would not be surprised if these closures were more lengthy, to err on the safer side,” he wrote in an analyst note.

The closure of IMAX theaters during the new year could potentially reduce B. Riley’s global first quarter IMAX box office projection of $294 million by more than $20 million, he added, with each subsequent week of closures reducing it a further $9 million beyond that.

Chinese cinema operators received a directive from government regulator the Film Bureau ordering theaters to remain open unless local government authorities had insisted on closure. The populous and prosperous province of Guangdong is one where the regional branch of the Film Bureau ordered blanket closure of movie theaters for the duration of the Chinese New Year (a.k.a. Spring Festival) holidays. There are 17 confirmed coronavirus cases in the province so far.

“According to the current requirements for the prevention of new-type coronavirus pneumonia in our province, theaters will be closed from now until the Spring Festival holiday. Each theater company should guide and urge its theaters to implement measures for refunds and suspension,” the Guangdong authority said.

Lumiere Pavilions said it was still operating two complexes in the cities of Yangzhou and Danyang, both in Jiangsu Province, as of Friday afternoon local time. Both are located within complexes operated by the Golden Eagle department store chains.

Cinemas still in operation have announced disease prevention measures like the wiping down of seats and countertops, with some on Thursday also offering free masks.

Meanwhile, moves are being made to entertain those stuck at home. Xu Zheng’s comedy “Lost in Russia” will be made available online for free from Saturday, the first day of the lunar new year.

And the Publicity Department of the Communist Party of China and the National Radio and Television Administration announced Friday that copyright owners of 10 TV series have donated the rights of their programs to Hubei and Wuhan TV stations “to boost the spirit” of people remaining in cities that have been locked down. These titles include shows that sing praise for medical professionals.

China has also moved to shut down other venues and cultural activities, such as typically very crowded temple fairs. As of Friday, this included Shanghai Disneyland, the Forbidden City, Beijing’s Bird’s Nest Stadium, the National Museum of China, and portions of the Great Wall and the Ming tombs, both popular tourist sites.

The country’s civil aviation authorities and state rail operator have also both said they will offer full refunds for all trip cancellations nationwide, in hopes of helping to curb the spread of the virus during a holiday travel period that is known as the largest annual human migration in the world.

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