After the Chinese mainland set a new 44 billion yuan ($6.6 billion) box office record in 2015, many predicted that this year's box office would reach 60 billion yuan, allowing China to become the N0.1 film market in the world. However, studios may have to temper their expectations this year, as the market's growth rate has reached a new five-year low.
The total box office for the first half of this year is approximately 25 billion yuan, a year-on-year increase of 21.9 percent. However, compared to 2015's 50 percent year-on-year growth, this is a dramatic slowdown for the industry, according to data from the China Movie Data Information Network.
One of the reasons behind this slowdown has been the decrease in discount availability on online ticketing platforms. Last year, promotions for cheap tickets were one of the major weapons that online ticket platforms used to attract users and keep a foothold in the market. However, now that the user bases of these platforms have stabilized, the number of discounts for tickets have decreased. This has led to fewer people heading to theaters, as many moviegoers in China are less willing to see a film for full price.
It looks as if the Chinese market is gradually reaching saturation. According to a survey conducted by Fanink, a film industry research company, cinemas can now be found throughout the most populous areas in China.
Box office revenue from new cinemas have accounted for 20 percent of box office this year, while back in 2013 this number was 33 percent. The reason for this drop is that most new cinemas this year were built in less developed regions where people have limited funds to spend on entertainment.
Another issue facing the industry is that audiences are starting to feel that domestic films are all the same. For quite some time domestic film studios have been playing it safe, repetitively producing low budget romance and comedy films or films aimed at younger audiences.
So far this year only a few domestic blockbusters have tried to break outside the box, but have failed when it comes to quality. Trying to get by with fancy special effects alone, these films failed when it came to fundamentals such as character development, understandable plots or getting the audience to care. Audience ratings have been low, leading to this summer's box office to fall far short of expectations.
This downturn should be taken as a sign that Chinese filmmakers need to avoid making meaningless Chinese blockbusters.
A turning point
This slowdown has many in the industry worried. In fact the pressure has been so great that it has even influenced long-standing policy. In an effort to boost box office returns, this year a few Hollywood blockbusters were permitted entry into cinemas over the summer months, what have been traditionally known as the "months of protection" when only domestic films are allowed in theaters.
There are some industry insiders, however, that feel that this drop in growth is not necessarily a bad sign. In an article published on news site China Economic Net, Rao Shuguang, the secretary general of China Film Association, said that he feels that the Chinese film industry is reaching a turning point.
According to Rao, the domestic film industry is finally entering a more rational phase of development. Although the departure of short-term capital and speculative investment is sure to impact industry development, it also means the industry bubble will finally pop.
Rao wrote that this "turning point" is the perfect time for the Chinese film industry to reflect on ways it can improve content creation and its filmmaking competence. Focusing on quality over quantity is sure to push the industry to develop in a healthier and more sustainable way.
"This turning point in fact is a transformation. Although there will be growing pains for Chinese films during this process, we will have no reason to be disappointed with the Chinese film market," Rao wrote.
Rao pointed out that becoming the largest film market in the world should not be a goal of the Chinese film industry. In his opinion, if the industry focuses instead on improving the quality of its films it will in turn earn more recognition worldwide, which will lead to all other problems taking care of themselves.
