Golden era for cinema beckons

Vietnam’s cinema industry is offering great room for investors which was evidenced through Korean investors’ big ventures into this field.

“Going to the cinema for watching films has grown into a habit of many Vietnamese young people, a favourable development factor. We hope the market could hold on current 15-20 per cent annual growth in the next decade,” said Brian Hall, chairman of MegaStar Vietnam Communications Company.

MegaStar is the leading film distributor in the Vietnamese market.

At present, MegaStar operates a network with 10 state-of-the art cinema complexes with 54 projection halls.

“In South Korea, people go to the cinema an average 10 times per year, whereas in Vietnam, it is less than one time. Specifically, new modern cinema complexes centre around big cities, meanwhile those in many locations report poor performance,” said Binh Hanh Dan Company Limited (BHD) chief Ngo Thi Bich Hanh.

BHD is big business in the field owning two Ho Chi Minh Ciy-based modern cinema complexes. It also engages in film production.

Vietnam’s growing population and incomes offer rich potential for the growth of cinemas.

Accordingly, Ministry of Health’s General Department of Population and Family Planning statistics show that Vietnamese population would reach 90 million this year and will grow 12 per cent per year from 2014-2019.

Besides, urban dwellers only account for 32 per cent of total population in Vietnam, much lower than the rate in other countries, according to World Bank.

To have in place a modern cinema complex, investors reportedly need to inject at least VND10 billion ($476,000) for a projection room. Then, for a cinema complex with five projection rooms investment would be at least VND50 billion ($2.4 million).

Usually, cinemas are located in central business districts with a population density and good infrastructure. This is also a big challenge amid current fierce competition for retail and trade centre space, particularly in Hanoi and Ho Chi Minh City.

According to Galaxy Studio’s distribution director Trinh Thanh Tam, even with favourable rental rate, it would take up to seven years to recoup investment capital. 

Vietnam is now home to around 300 cinemas, 40 in Hanoi and Ho Chi Minh City, but generate 80 per cent of cinema market revenue, according to Galaxy statistics.