Opinion Sense And Nonsense Cathay-Golden Village merger: Covid-19 forces bottomline move but will not kill romance...

Cathay-Golden Village merger: Covid-19 forces bottomline move but will not kill romance of the cinema

Sense And Nonsense by Tan Bah Bah

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News of a proposed Cathay-Golden Harvest merger reminds me starkly that to some people, the cinema industry may have become just another bottomline business. The fact – that it is simply business – was clearly illustrated by the fact the first news outlet to pick up the merger announcement was The Edge, a business and financial news weekly, not quite the big media boys who had to follow up very quickly and even acknowledge The Edge’s “scoop” in their catchup stories.

The Edge reported on Dec 9: “Just a week after announcing a possible spin off separate listing of its cinema business, entertainment company mm2 Asia is in talks to merge this business, operating mainly under the Cathay brand, with competitor Golden Village.

“As part of the deal, the parties aim to bring in new investors to help beef up the combined entity, which is going to be the largest cinema operator in town.

“mm2 Asia now runs eight Cathay cinemas in Singapore, and 14 in Malaysia. The potential merger partner, Hong Kong listed Orange Sky Golden Harvest Entertainment (Holdings), runs another 14 cinemas under the Golden Village brand in Singapore. The Hong Kong company, previously known as “Golden Harvest” runs a total of 35 cinemas with 285 screens in Hong Kong, Taiwan and Singapore.”

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There was a time when East Asia’s cinema industry (including film-making) had a certain glamour about it. It was not only about profits and losses. The personalities behind the companies were larger than life newsmakers.

Before Golden Harvest, the three sets of movers responsible for shaping the industry used to hog the headlines. They were always seen at every other entertainment event involving the film stars from their studios.

Seldom a month would go by without media coverage of Loke Wan Tho, the Shaw brothers (Run Run and Runme) and Raymond Chow in the company of stars like Lin Dai, Li Li Hwa, Chen Ping, Regina Ip, Tanny Tien Ni, Nora Miao, Maggie Cheung, Rosamund Kwan, to name a few. When kungfu went international because of Bruce Lee, that was when the Hong Kong film industry became a major force to be reckoned with.

The cinema magnates were powerful people.

Their cinemas were packed. They got bigger and bigger and in order to fill these 800- or 1,000 seat behemoths, the big studios had to resort to mass appeal blockbusters. When cinema tastes changed, as filmgoers demanded something more than the same old lower common denominator fare (translation: no-brainer films), the industry tried to survive through building cineplexes (mix of large and small halls) which could accommodate the more arty films that appeal to a smaller audience segment.

The industry went through the usual transitional phases, as ownership changed hands from first generation to second and third generations. With that consolidation, not unexpectedly, the scions of these chains probably saw themselves as financial custodians of the family businesses rather than super entrepreneurs out to change the world. They were more cautious and businesslike, operating mostly out of the limelight. Also, I think the Cathay and Shaw founders have been giving back to society through the charity foundations that they have set up and their descendants would be involved in these. It was not as if they have disappeared.

The question, however, has always been: Is the cinema business a dying one?

I do not think so.

It was hard hit by the VCDs in the 1970s/1980s. Pirated versions of major films could be bought and shown at home. Film production companies decided to go for the same day screening across the globe to blunt the piracy menace. When piracy and the copyright issue were brought under control through stronger enforcement, cinemas started to breathe again.

At the same time, making cinema-going a distinctive lifestyle option brought new life to the industry. It became all about the experience. Spanking new cineplexes – complete with luxury class sections, lounges and seats – got the film fans out of their home couches.

The opening of new shopping malls near MRT stations helped tremendously. For example, two of the adjoining malls at Paya Lebar – SingPost Centre and Paya Lebar Quarter – now house cineplexes. Despite Covid-19, they and other cinemas have reopened, with certain seating restrictions and usual precautions.

We have not got the 2020 data on cinema-going in Singapore yet. They are not going to be happy reading.

From The Edge report alone: “For the six months ended June 30 this year, Golden Village’s Singapore cinema business made a loss of HK$16.9 million (S$2.9 million) on revenue of just HK$137.4 million, due to circuit breaker measures, The Edge Singapore reported. This compares with operating profit of HK$70.6 million and revenue of HK$401 million for the year-ago period.

“mm2 sank to a net loss of $22.4 million for the half-year to Sept 30, from a net profit of $9.18 million in the year-ago period. This comes as revenue fell by 83 per cent year on year to $19.9 million, hurt by safe-management measures that limited operations in its core cinema and events businesses.”

It would appear that the proposed Cathay-Golden Harvest merger makes business sense. There would be economies of scale plus greater financial stability during an uncertain economic climate.

Whatever the anticipated bad results for 2020, cinema going is not a dying industry. Far from it. Piracy did not kill it. VCDs did not kill it.

Ironically, Covid-19 may have forced films fans to realise this: Getting cooped up in a room or house watching films on a smartphone, laptop monitor or a TV screen day after day is no replacement for an outing in a cinema. Certain types of films require a cinema hall platform. I cannot imagine Lord of the Rings, or the Star Wars or Avengers series being suitable for other than the big screen. You can’t share the same anxiety with other watchers about the antics of Golum or absorb the depth of Yoda’s wisdom any other way.

Cinema going is more than a business. It is still an irreplaceable out-of-the-house leisure activity.

 

Tan Bah Bah, consulting editor of TheIndependent.Sg, is a former senior leader writer with The Straits Times. He was also managing editor of a local magazine publishing company.Follow us on Social Media

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