Cinema chains continue to expand as blockbusters keep packing them in

KUALA LUMPUR, Dec 14 — Do we go to the movies to escape our everyday reality? Local cinema chains are banking on Malaysians doing just that in these economically challenging times as they continue their expansion plans.

Recently, Malay Mail Online spoke to consumers in the Klang Valley who mostly pinpointed entertainment—including visits to the cinemas — as the area where they have cut spending to counter the rise in living costs and the knock-on effects of the Goods and Services Tax (GST).

Some even admitted to streaming movies from the Internet.

But Golden Screen Cinemas (GSC) Sdn Bhd, which operates the largest cinema chain in the country, said it did not experience any “immediate impact” from the GST as the new consumption tax’s introduction in April coincided with the beginning of summer when many blockbuster movies are released.

“The cinema business is very content driven. Ultimately the movie is the driving factor for consumers and it depends on what movies are on offer per month,” a GSC spokesman explained, noting an increase in its box office collection for blockbuster movies that was matched by a slight drop for non-blockbuster movies.

Observing the “reality” that the public have become “more selective about the movies they watch”, GSC said it has seen a “slight decrease” of its ticket sales and admission.

“However overall we have still recorded positive growth due to the opening of new cinemas. At present we are at 33 locations and the forecast till year end is positive,” the spokesman told Malay Mail Online in an email interview late last month.

It added that it was expecting “positive ticket sales during the upcoming year-end holiday season” with its amazing line-up of movies such as the much-anticipated Star Wars: The Force Awakens, The Good Dinosaur, In the Heart of the Sea, Alvin & The Chipmunks: The Road Trip and Ip Man 3.

Although GSC said the cinema industry outlook is “still rather healthy”, it expects 2016 to be a “challenging year” due to expected rise in living costs and consumers likely becoming more conservative in their spending.

“Cost of living is expected to increase which will affect overall public sentiments and consumer spending habits. Consumers may become more cautious about spending money and will tighten their purse strings. We have not tried to predict consumer spending levels, rather our challenge and focus is to retain our existing customers and acquire new ones.

“For us, the key thing is, GSC will continue to engage customers via affordable pricing, exclusive content and innovative movie-going experience. Cinema-going culture in Malaysia is very strong and we see this trend continuing,” it said.

As the first cinema operator in Malaysia to cross the 300-screen mark nationwide with 302 screens currently under its stable, GSC is set to continue its expansion next year with two new multiplexes at the Selayang Star City Mall and Johor Baru’s Paradigm Mall, as well as four and three additional cinema halls at Mid Valley Megamall and Summit USJ respectively.

Another leading cinema chain in Malaysia, TGV Cinemas, said its ticket sales have not gone down and highlighted that it has not collected the GST rate of 6 per cent from its customers.

“There has not been any noticeable drop post-GST. Our ticket price remained the same as before GST was implemented. This is because TGV Cinemas absorbed the cost of GST for our ticket prices.

TGV expects next year’s line-up of “great movies” such as Gods of Egypt, Deadpool, Batman v Superman: Dawn of Justice, Captain America: Civil War, Alice Through the Looking Glass and Warcraft to boost its ticket sales.

“We are also venturing into alternate content which we have successfully introduced to moviegoers,” the spokesman said, citing as examples its screening this year of concerts by British band Take That and British singer Ed Sheeran plus the “live” screening of the Dota2 computer gaming championship and documentaries for young learners.

This year alone, TGV added four new cinemas — at D’Pulze Cyberjaya, Setiawangsa’s AEON Mall AU2, Sunway Putra mall and AEON Taiping — and currently has 32 multiplexes and 251 screens with more than 42,227 seats nationwide.

Next year, TGV plans to open in four new locations with their first IMAX theatres in East Malaysia at Kuching and Kota Kinabalu, as well as non-IMAX theatres at Sunway Velocity Mall and Klebang.