Cinema complexes expand, market still large enough for newcomers
The cinema market was estimated to have modest value of US$6 million in 2008, but the figure soared by 10 times in 2013 and exceeded the US$100 million threshold in 2015, according to CGV.
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The first thing Blue HK, an investment fund from Hong Kong, did when entering Vietnam was pour money into Beta Media, a business that develops a cinema chain.
Andrew Vallis from Blue HK in HCMC said the fund saw the great potential of the entertainment market in Vietnam. He noted that markets in some provinces and cities remain unexploited, saying that the ‘low ticket price, high service quality’ strategy being followed by Beta Media will work well.
With the investment from Blue HK, Beta Media plans to open six more cinema complexes in Thanh Hoa, Bac Giang, Dong Anh district of Hanoi, Nha Trang, HCMC and Long Xuyen this year, raising the total number of complexes to 10. The figure is expected to double next year.
CGV Vietnam recently opened a new cinema complex at Parkson Dong Khoi Shopping Mall in district 1, HCMC.
Not only expanding its network in large cities, CGV also is investing in small provinces. It plans to open 12-15 new cinemas every year, including four to five in small provinces.
It is expected that it would have 55 complexes by the end of 2017, the figure much higher than the targeted 30 complexes CGV set in early 2014, when it changed the name of 13 MegaStar complexes into CGV.
According to CGV, the Vietnamese film market has been growing very rapidly from US$6 million in 2008 to US$100 million in 2015.
CGV’s CEO Dong Won Kwak said the entertainment market has been growing by 20%, a relatively attractive profitability for investors. That is why CGV continues to expand its network with investment capital far higher than profit.
He went on to say that one person in the US and the Republic of Korea goes to the cinema four times a year, while the figure is 0.2 in Vietnam. This means there are still great opportunities for investors to develop.
Galaxy Cinema, Lotte Cinema, BHD and Cinebo have also joined the race of opening new cinemas as the market is open in many provinces. In the competition, Beta Media is a ‘newcomer’. However, its CEO Bui Quang Minh said the market is still vast.
Regarding profitability, an analyst said the investment rate for one cinema complex is US$2-7 million, while it takes 3-6 years to take back the investment capital. Tickets, food and ads are the three major sources of revenue for cinemas.
