Last year, two Hong Kong movies exceededHK$100 million (US$12.9 million) at the box office, setting new records. However, this achievement failed to significantly alleviate the challenges faced by movie theaters in the region.
Viewership is declining, and movie theaters are shutting down. According to the Hong Kong Theaters Association, the number of cinema seats has dropped from over 125,000 across 112 theaters at their highest point in 1994 to fewer than 40,000 seats spread among just 56 theaters today.
The city's movie theaters suffered greatly during this time. Covid-19 pandemic , forced to shut down for approximately 200 days annually while continuing to cover rental costs and employee wages, leading to significant financial losses throughout the sector.
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Meanwhile, streaming services like Netflix and Disney+ have gained popularity, enabling users to view their favorite content whenever they choose from the comfort of their homes.
People in Hong Kong are simply not going to the cinema compared with how they used to, mirroring trends elsewhere.
Cinema chain UA closed down in 2021, amid the pandemic, after 36 years in Hong Kong. It had six cinemas before it shut.
Last year's two big hits - The Last Dance and Dusk of the Fighters: Trapped Within - brought crowds back to the cinemas, but were not enough to reverse the trend.
Last year, the city's movie theater earnings dropped to HK$1.34 billion, marking the lowest figure in 13 years, as reported by the Hong Kong Box Office Limited.
At least nine cinemas closed last year, including two each from the Golden Scene and MCL chains. Three more announced their closure in the first three months of this year.
"Cinemas have to look at average revenue across the entire year, not just one or two films that do very well," said Crucindo Hung Cho-sing, chairman of the Federation of Motion Film Producers of Hong Kong.
The total box office takings of about HK$1.3 billion was spread across nearly 300 screens. "Every cinema made a loss if we divide the revenue among them," Hung said.
For the industry to break even, annual takings had to be at least HK$2 billion.
"There is still a massive gap," he said.
Hung said Hong Kong films were not the only source of revenue for cinemas in the city, as they also screened films from mainland China and abroad.
US-made productions had the largest share of the market, but receipts from American films dropped from about 75 per cent of the box office takings in the past to around 40 per cent last year, according to Hung.
So while Hong Kong films brought in slightly more last year, that increase was more than offset by the decline in takings from United States films, making for the worst box office performance in years, he said.
Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, pointed out that the decrease in box office revenues was due to fundamental factors, with one major reason being the growth of streaming services. These platforms have altered how audiences choose to watch movies.
"Nearly every household now maintains accounts with these platforms, and people often consider whether they should go to the cinema or opt for watching movies from home via on-demand services. That’s one major change that emerged during the pandemic," he stated.
He further noted that an increase in Hong Kong residents crossing the border for shopping, dining, and leisure activities on the mainland, as well as traveling overseas, was not beneficial. With many inhabitants away from the city, fewer people were available to attend movie theaters.
Ng stated that filmmakers who recognized the influence of streaming platforms on their box office revenues started to adapt their strategies.
For instance, entertainment conglomerate Disney previously allowed its movies to vie for audiences both in theaters and on its streaming service, Disney+.
Ng pointed out that they have altered their approach and no longer release all productions on Disney+ immediately, ensuring that certain audiences watch them in theaters first.
The decrease in cinema attendance is not specific to just Hong Kong.
In January, mainland box office tracking platform Dengta Data reported that 57 percent of moviegoers visited cinemas just once throughout the past year. The total attendance declined to 1.01 billion people, marking a decrease of 22.3 percent compared to the prior year.
According to a media report, Australia was home to approximately 460 cinemas last year, which represents a decrease of 41 theaters compared to 2021.
A report from the British research company Omdia, released in April and highlighted by various news organizations, indicated that AMC Entertainment, which is the biggest movie theater chain globally, shut down 169 theaters after late 2019 and intended to launch 60 new locations.
Jeannette Chan Wing-wai, senior director of retail at JLL, said some shopping malls in Hong Kong had reduced rents for cinemas, especially during the pandemic, but expensive leases remained one of the biggest fixed costs that played a part in the wave of cinema closures.
"At its peak before the pandemic, rents for cinemas could range between HK$3 million to close to HK$6 million a month in some of the busiest areas in Hong Kong," she said.
Rents at shopping centres saw a 36.3 per cent decline from the last quarter of 2019 to the last quarter of 2024, with some landlords giving cinemas even bigger reductions as anchor tenants.
Chan expected overall rentals in shopping malls to slide further this year, with lots of empty shops across the city.
Kenny Ng Kwok-kwan, an associate professor at Baptist University's Academy of Film, said social media had helped to retain interest in cinema, alerting Hongkongers to films worth watching.
"Young people - including young couples and families - still go to the cinema, especially for popular and entertaining films, blockbusters and some local films with high box office takings," he said.
He mentioned that elderly individuals rarely visited movie theaters unless they were looking to benefit from early bird specials.
He further noted that for those middle-aged, life’s stresses frequently result in a lack of inclination towards amusement and artistic pursuits.
Observing that the film distribution and production sectors were tightly intertwined, he proposed that fostering a more dynamic domestic filmmaking sector could also be advantageous for the city’s movie theaters.
It would be beneficial for cinemas if the government spearheaded efforts to bolster the Hong Kong film industry both domestically and globally.
Ng suggested that instead of focusing solely on the domestic market, the government should explore expanding into foreign markets. Increased revenue from larger box offices combined with international stardom for local celebrities could have a significant positive impact.
He noted that Hong Kong movies have limited visibility internationally, and suggested that the Trade Development Council assist by motivating producers to participate in film festivals, including screenings of classic Hong Kong films, to increase global recognition of local cinema.
In the end, however, the crucial issue was whether viewers would come back to occupy theater chairs.
Accountant Thomas Li, who is in his thirties, informed the Post that he hadn't visited the movies in the last two years and favored watching films from the comfort of his home via the streaming service Netflix.
"I am not bound by the cinema schedules and can watch whenever I like. I could be having a meal, ironing, doing the dishes or enjoying a glass of wine," he said.
He maintained a list of movies to see and would keep an eye out for them in the inflight entertainment options whenever he traveled.
"If the film is not really to your taste in the first 10 minutes, you can switch to another one immediately. You can't do that in a cinema, you've committed to it because you've paid," he said.
Harry Mitchell, a British pilot in his sixties who has lived in Hong Kong for a decade, said he paid about HK$200 a month for Netflix and Amazon Prime Video subscriptions, and that had halved his cinema outings from twice to once a month.
"I tend to pick only special movies to watch at the cinema, that benefit from either a particularly immersive experience with enhanced sound effects or visual presentations that you couldn't get on a home television," he said.
His latest visit to the movie theater was to see the Hong Kong film. The Last Dance He could savor it without any interruptions or phone calls distracting him.
He mentioned that going to the movies had turned into something extraordinary.
He mentioned, 'Going out for the night, it’s about being sociable, experiencing things differently than you would at home,'.
Hung from the film producers federation stated that for the movie industry, the continuation of cinemas was crucial.
He stated that while production companies may sell their movies to streaming platforms as a means to keep their businesses going, the scale and outcomes of these productions differ significantly.
Producers and directors find it significantly more challenging to enhance their reputations if their movies are exclusively released online. For them to gain recognition within the industry, their films must premiere in cinemas; only then can they achieve greater respect once these films become successful.
The spokesperson for the Federation of Hong Kong Filmmakers, Tenky Tin Kai-man, stated that the film industry is currently undergoing transformation. While he anticipates an increase in cinema closures throughout this year, he believes it does not signify "the end of the world."
"I'm uncertain about how many more will shut down this year, but a few certainly will, and by the end of the year, the situation should stabilize somewhat," Tin stated.
He mentioned that independent cinemas, rather than chain theaters, were more prone to closure because they didn’t have the negotiating strength needed to get favorable terms.
Nor were they part of companies that also made films, such as Emperor Motion Pictures, which ran the Emperor Cinemas Group, he added.
Tin said he did not think that having fewer cinemas was a sign that the industry was doomed.
He stated, 'We hope the viewership and ticket sales don’t decrease anymore. However, with fewer movie theaters around, the ones still standing should have better chances of making it.'
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The article initially appeared on the South China Morning Post (www.scmp.com), which serves as the premier source for news coverage of China and Asia.
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