Mtime’s web site attracts about 160 million unique monthly users, and its mobile ticketing platform has about 10 percent market share.
A slowdown in box office growth in 2016 hasn’t stopped Wanda Cinema Line from increasing revenue for its expanding global film empire as it eyes off further avenues of growth through acquisitions and investments in merchandising.
On Monday, Wanda Cinemas’ CEO Zeng Maojun shrugged off the industry’s recent box office slump and indicated the company intends to add about 150 theaters this year.
“The slowdown in box office sales this year has provided us with better opportunities and valuations for acquisitions,” Zeng told reporters in Beijing. “As the market is cooling off from the previous three years and some of the hot money is leaving, we will emerge stronger.”
By some estimates, Dalian Wanda Group already holds about 18 percent of the country’s screens, making it the largest exhibitor. The break-neck growth isn’t slowing down, with China now on track to surpass the U.S. in number of screens imminently, according to analysts at IHS Markit.
China had 39,194 screens compared with an estimated 40,475 in the U.S. as of the end of September, according to the research firm. Screens have been going up in the country at a staggering rate of 27 per day this year alone.
The CEO said he expected this year’s box office revenue to hit approximately RMB 47 billion, which is just shy of an already re-adjusted target. “The goal of RMB 50 billion is almost impossible to realize,” he said.
Wanda has been on a tear of late, acquiring company after company in China and abroad. But it was their deal last summer to take an equity stake in Mtime.Com and all its operational entities for US$350 million in cash, that Zeng and Mtime CEO Kelvin Hou, a former Microsoft executive, were emphasizing on Monday.
Mtime has been described as China’s answer to Fandango, IMDb, Rotten Tomatoes, Entertainment Tonight and Mattel all rolled into one. Most major U.S. studios have made use of the platform’s marketing power at one stage or another.
Mtime’s web site attracts about 160 million unique monthly users, and its mobile ticketing platform has about 10 percent market share.
The partnership has given Wanda a stronger digital capability that it hopes to leverage to drive electronic ticket sales and merchandise sales as well as Mtime’s coverage of media and movie marketing.
Digital ticket sales are the primary platform for consumers to buy tickets but merchandise revenue still only makes up a small proportion of China’s overall film industry pie. China’s market for licensed movie goods has remained underdeveloped for some time, with many analysts expecting it to grow at speeds similar to box office growth in recent years.
“We have noticed that the number of the 90s generation and the post-2000 generation who purchase tickets online has increased in the past three years,” Zeng said. “So Wanda Cinemas needs to be able to provide a one-stop service to satisfy younger customers’ various needs including online ticketing and film merchandise.”
Zeng said the two companies will combine their retail stores to create 50 to 60 outlets across China where, in addition to their cinemas, they will sell the merchandise. Globally, Wanda will sell merchandise in its cinemas in the U.S., Europe and Australia.
Merchandise related to veteran Chinese director Zhang Yimou’s The Great Wall will be sold through Amazon.com globally, said Zeng. Mtime is establishing factories and logistical operations to manufacture and deliver the goods across the country.
Mtime has a team of over 40 international designers who have developed product lines based on partners’ intellectual property. The first tranche of merchandise for the Matt Damon starrer was on display at Monday’s press conference.
The company signed a deal with Legendary to be the exclusive Chinese merchandiser for Warcraft earlier this year. It sold more than $10 million in Warcraft-themed goods before the film had even opened, according to the company.
The company already has merchandise rights from studios including Universal Studios, Marvel Studios, Warner Bros.’ and Disney and boasts over 800 different product lines.
— Additional reporting by Qingyuan Wang.
