High-tech magnifies cinemas' scope

Domestic firms Guangzhou Jinyi Media Corp, Bona Film Group Ltd and Wanda have agreed to install 20 Cinity Cinema Systems in their cinemas across China.

In addition to high-tech, popular technologies like smartphone apps are boosting box-office receipts in China. Moviegoers find it convenient to pick and choose their seats and book combo deals online in advance at cheaper prices, although such discounts appear to be ebbing of late.

A film industry report from iiMedia Research said online film ticketing now accounts for 85.7 percent of the total film ticketing market. In the first quarter of this year, Maoyan mobile app alone accounted for 42.6 percent of total film tickets sold, while its competitor Taopiaopiao had 31.5 percent.

Now that they have stopped offering deep discounts on film tickets, thus contributing to slack box-office sales, which in turn added to the factors that squeezed profits of cinema firms, film exhibitors can no longer expect to boost profits merely by setting up more cinemas, Chen of Peking University said.

Agreed Neil Wang, president of consulting firm Frost & Sullivan China. He said in the past, whenever cinema companies found demand outstripped supply of screens, their reflex was to simply set up more cinemas. But that strategy would not work in the current market situation. For, as Chen explained, profits and policy support had enabled rapid expansion in the past.

"Now, the market is heading to saturation. Fewer cinemas are betting on filmgoers' habitual visits to boost profit. Instead, they are seeking new revenue growth through technology-embedded film screenings," Wang said, adding such shows can help attract big audiences even if tickets are priced higher.

"Many leading Chinese cinema chains are shifting their focus from box office-led revenue to non-box office-led revenue."

Chen of Peking University said many cinema companies have started seeing derivatives as a new revenue stream, though the sector still lacks a well-developed industry chain. "Intellectual property protection, copyright licensing… these are all challenges that need to be tackled to develop film derivatives into a sector.

"Going forward, there might be more tech innovations for cinemas to better deliver film content. Tech advancement has always been important to boost China's film market."