Domestic flicks bringing in bigger bucks

Such returns are expected to entice more investments.

But such investments remain risky, Kang says. Only about 10 percent of the 700 films China produces annually earn profits.

The industry needs to understand the market. China's film sector has entered the Internet era and embraced rapid changes in not only financing but also marketing, Kang tells media.

Youth and romance films account for half of last year's highest-grossing films. Filmgoers' main demographic is people born after 1990, with an average age of 21.5. So film companies must cater more to their pop and Internet culture.

They're teaming up with video websites to capitalize on their Web strategies and big data advantages.

Major sites like Youku Tudou and iQiyi have also established their own film companies to more deeply penetrate the market.

But many insiders bemoan local productions' quality.

Domestic films account for less than 50 percent of the first half of the year's box-office earnings. This is driving filmmakers to improve content and technology.

Local films have faced tough competition, as Hollywood has produced many exceptional movies in recent years, critic Li Duoyu tells media.

Yet Chinese films still enjoy great potential "as the cake gets bigger", he says.