People buy tickets at a movie theater to watch Furious 7 in Nantong, Jiangsu province. (Photo/China Daily)
As Internet players scramble to carve out a slice of China's booming film sector, cinemas in the world's second-largest movie market are undergoing a rapid transformation, starting from the way they sell tickets.
"We have seen an explosive growth in the number of people who have migrated to online platforms to purchase tickets since last August," said Li Chao, marketing director at Beijing Jinyi International Cinema's Zhongguancun Branch.
"In January, over 47 percent of our visitors bought their tickets online, surging from 21 percent last December," Li said. "To meet the growing demand, we set up dozens of new ticket vending machines by teaming up with online platforms."
Beijing Jinyi is one of thousands of cinemas in China experiencing the new trend. A recent report by Beijing-based Internet consultancy Analysys International reveals that over 45 percent of cinema tickets on the mainland were purchased online last year.
The active engagement of Internet companies, the report said, has spawned 40 online platforms dedicated to selling movie tickets. The lion's share goes to Maoyan, which is owned by Meituan.com, a group-buying site financially backed by Alibaba Group Holding Ltd. It has almost 17 percent of this growing market, while Shanghai-based ticketing website Gewara.com occupies second place with a 7 percent market share.
Social networking heavyweight Tencent Holdings Ltd is also cashing in on the booming sector. Its Wechat platform, China's most widely used online chatting application, started to offer ticketing services in 2013 and sold 5 percent of all movie tickets last year.
The intensified push by Internet enterprises to lure film buffs comes amid both the exponential growth of China's movie industry and the increasing popularity of the O2O (online-to-offline) model in the service sector.
Figures from the State Administration of Press, Publication, Radio, Film and Television show that the total box office in China reached 29.6 billion yuan ($4.8 billion) last year. A decade earlier, in 2004, mainland box office receipts were a mere 1.5 billion yuan.
Annual growth from 2004 to 2014 was approximately 40 percent per year, making China the world's second-largest cinema market, only after North America.
In fact, Chinese Internet companies started to display their ambitions regarding the movie industry as early as 2011 when joint purchasing, then the most common form adopted by online ticket-selling platforms, ignited consumers' enthusiasm for movies and cultivated their habit of purchasing online.
But after several years of cash-burning, some ticketing websites came to the conclusion that group buying is not a long-term strategy.
Liu Yong, CEO of Gewara, said that instead of providing the lowest price, it aimed at offering a package of services to customers.
"Booking seats in advance, offering route-mapping and providing detailed information about restaurants and parking lots nearby have become prerequisites rather than bonuses to attract audiences," Liu said in an interview with iheima.com, a website helping startups connect with venture capital investors.
However, facing mounting competition, not all cinemas welcome the entry of Internet players. Market experts say that although group-buying draws a large number of people who would otherwise be kept away by high prices, it could leave cinemas overstretched.
Cao Yong, deputy manager of Beijing UME International Cineplex's Anzhen branch, said: "Some cinemas that rely on ticketing sites to lure film-goers are often poorly equipped and unable to provide proper services."
"Lacking the capacity to handle the influx of visitors, they choose to sacrifice the audience's viewing experience," Cao added, citing examples of cinemas without air conditioners, having limited resting places and dirty toilets.
But as an increasing number of people flood to the Internet for movie tickets, Cao said: "UME cinemas have also partnered with online platforms on the condition that the tickets can't be sold at prices lower than what our VIP members enjoy."
