Proposed GV-Cathay merger a sign of change for cinema industry

SINGAPORE - The news of the proposed merger between Golden Village and Cathay, the largest and third-largest cinema chains in Singapore, is a sign of the strong competition from streaming services, experts tell The Straits Times.

The move comes after revenue losses suffered by both chains due to the Covid-19 pandemic, which closed cinemas from March 27 and hobbled their reopening on July 13 with social distancing seating restrictions.

Golden Village Multiplex runs 14 cinemas here. Media company mm2 Asia manages Cathay Cineplexes, which operates eight cinemas.

Under current numbers, this would make the combined business a titan with 22 cinemas, dwarfing Shaw Theatres, the next largest player with nine cinemas.

The chains stated in the filing that they hope a merger will bring in more investors and create economies of scale.

Mr Thomas Chia, director of independent distributor Lighthouse Film Distribution, believes film fans in Singapore will benefit from the merger.

It signals traditional cinemas remain agile and are willing to take bold steps to keep consumers loyal, he says.

"I just hope they will continue to support a variety of films, big and small. A wider variety will attract a wider group of filmgoers."

Cinema operators are also hurting from the lack of major releases, which have been postponed to next year because of lockdowns in the United States and elsewhere.

Another blow to the cinema industry came last week when Warner Bros, the studio behind the upcoming Wonder Woman 1984, announced that the superhero movie, along with its entire 2021 slate of films, will be released on the HBO Max streaming service at the same time as theatres in the US.

Upcoming Warner titles include the science-fiction blockbusters Matrix 4 and Dune.

Film distributor Warner Bros Singapore declined comment when approached by ST.

The move follows Disney's decision to release the period fantasy Mulan on its Disney+ streaming platform in the US in September, an experiment that could pave the way for more streaming releases of its major films.

Mulan was released in cinemas here in September. Wonder Woman 1984 will be released in cinemas here on Dec 17.

It has not yet been announced when HBO Max will be available in Singapore. The Disney+ service is expected to roll out worldwide over the next two years, according to reports.

Industry professionals told ST that cinema chains are bracing themselves for the fallout when these services do become available here, which could see Disney's Star Wars franchise and films from the Marvel Cinematic Universe make their way to the Disney+ service shortly after opening in cinemas.

Marvel's Avengers: Endgame (2019) smashed several box office records, including for opening weekend ($7.52 million) and cumulative total ($19.5 million).

Film fan Wayne Heng, 29, a finance executive, says that if the merger happens, he hopes that "the cinemas pass on the savings from the economies of scale on to people like us".

For him, watching movies is a social activity to be shared with his wife and friends. "I enjoy the cinema experience, which I can't get from streaming."

The proposed merger has to be approved by shareholders of both companies as well as government agencies, among others.

Golden Village chief executive Clara Cheo says in a statement: "Cinema operators are facing tough times today amid the advent of online streaming apps, the growth of social media video content and the Covid-19 pandemic.

"We need to adapt in order to succeed and GV, being a leading cinema exhibitor with several firsts in the local movie industry, is confident that the proposed merger will enable us to provide continual access to a wider range of offerings for our consumers."

Mr Chang Long Jong, group chief executive of mm2 Asia, says in a statement: "In a world where consumer demands are constantly evolving, entertainment in terms of content and distribution must too evolve to better serve the market."

Despite the Covid-19 situation, he notes that the company's films have done well in terms of box office takings and awards.

"Cinemas must evolve beyond being content distributors to bringing the best entertainment experience to our consumers," he says. "This merger will better help us to achieve this."