Mediocre movies, fewer discounts cited for lowest holiday turnout in decade
Movie ticket sales in China sunk during the National Day holidays for the first time in a decade, a sign of a turning point for the movie industry, analysts said. They said that the sluggish box office could be blamed on the end of subsidized online sales and a growing appetite of Chinese moviegoers for higher-quality offerings. Some private capital is preparing to withdraw from the movie sector due to weaker market expectations, but experts noted that the move may be a boon for filmmakers. Also, industry insiders said that the movie sales slowdown will lead to an industry reshuffle and make movie producers refocus on the true value of film.
It has just been six months since the blockbuster The Mermaid shined on the movie market with 3.4 billion yuan ($505 million) in box- office sales, yet the glory days for the Chinese movie industry already seem gone.
Even the National Day holidays, traditionally a golden period for stellar box-office receipts, saw their edge fading.
The seven-day holidays from October 1 to 7 experienced the first ticket slump in holiday sales in a decade, pulling in 1.58 billion yuan, down 14.6 percent year-on-year, despite 15 movies premiering close to or during the holiday week, according to latest figures from the China Box Office website.
In contrast, ticket sales during the National Day holidays in the previous two years had grown at an astonishing 70 percent on average year-on-year, with revenues reaching 1.09 billion yuan in 2014 and 1.85 billion yuan in 2015, according to domestic movie site mtime.com.
The summertime box office, another lucrative period for ticket sales, has also been sluggish. During June to August this year, box-office receipts took in 12.43 billion yuan, paling in comparison to the 12.47 billion yuan drawn last summer, according to Beijing-based movie consulting firm EntGroup.
"After years of robust growth brought by demographic dividends, such a fall in sales this year is not a surprise," Chen Changye, a veteran entertainment industry insider, told the Global Times on Sunday.
"Apparently, a turning point for Chinese movie industry has arrived."
In the near future, a slowdown in Chinese movie houses is also expected, Huang Guofeng, an analyst from Beijing-based consultancy Analysys International, told the Global Times on Monday.
Many factors
Experts said that the box-office slide is partly because of fewer discounts offered by mobile ticket-booking applications, backed by tech giants including Alibaba Group Holding Ltd, Baidu Inc and Tencent Holdings Ltd, which drove up ticket prices this year.
For example, the average price for a movie ticket in the first quarter of 2015 was 17 yuan, but rose to 22 yuan the same period this year, according to EntGroup. It was also quite common to find tickets online for 9.9 yuan a year ago, media reports said.
"In 2015, the online platforms burned around 4 billion yuan to subsidize the movie market, a bonanza for local films," Zhang Qiang, CEO of Alibaba Picture Group, said at the Changchun International Movie Festival on Thursday.
"However, this year, the amount has fallen by at least 50 percent."
As discounts evaporated, "consumers are less motivated to purchase tickets", especially when the domestic economy is experiencing a downturn and less-expensive alternatives for entertainment like Internet TV series, online movies and online live broadcasting have sprung up and quickly filled up the market vacancy, Chen noted.
Besides, Chinese consumers are becoming increasingly selective, rational and mature in their movie choices, Chen said, noting that this year the market has fewer "dark horses," a major powerhouse for theaters, compared with preceding periods, due to local films' disappointing quality.
For example, the average score for the top four blockbuster holiday movie offerings on popular fan-rating site douban.com, is 5.3 points out of 10 based on the calculation of the Global Times, suggesting a lower-quality domestic films.
Another interesting note is that The Operation Mekong, a movie rated 8.2 points on douban.com, was ranked in the third place for the first three days of the holiday week, but climbed to the top on the fourth day with increasingly positive reviews on the Internet.
As of Monday, the movie has brought almost 1 billion yuan, according to mtime.com.
Chinese moviegoers are no longer blindly buying into well-known characters or "fresh meat" - the young attractive male star, Huang explained. "Instead, the online reputation is shaping the box-office sales."
Doomed outlook or reshuffle?
Because of China's fairly recent steady box-office performance, some analysts had predicted that China would overtake the US as the world's biggest movie market by 2017, according to the Wall Street Journal.
Industry observers also estimated at the beginning of 2016 that China's total box-office revenue this year could exceed 60 billion yuan, according to CCTV.
However, as of October 12, box-office sales only stood at 37.5 billion yuan, making both the two targets impossible to achieve, Huang noted. Even whether the box office can catch up with the 44 billion yuan of 2015 is still suspect.
The grim outlook has led to the fleeing of private investment from the movie production industry, Chen said.
For example, listed Internet company 37 Interactive Entertainment Technology Co announced Friday that it will give up a long-awaited 100 percent share purchase deal worth 1.2 billion yuan for film producer China Wit Media Co, due to "uncertainty over the film industry," according to a statement the company sent to the Shanghai Stock Exchange on Friday.
Despite the diminishing market, not every filmmaker and industrial player is weeping and sighing.
Although the marriage of the private sector with the movie-making industry has provided abundant capital to spur technological innovation, their divorce may actually benefit the sector's sound development in the long term, experts noted.
"Private investment has somewhat kidnapped film production to meet their desire for quick returns, which in turn led to a surge of low-quality movies in the past years," Huang said.
With the withdrawal of speculative hot money, the private investment left in the sector is from those who are enthusiastic and upbeat about the industry, according to experts.
Also, those investments are more likely to flow to artistic and creative movies like literary film, the kind of genre where directors are given great autonomy over casting, scripts and production, said Chinese film director Jia Zhangke at the movie festival.
Meanwhile, the rise and fall is just a normal industry adjustment process, which Hollywood has also experienced few years ago, experts noted.
The fluctuation of the box office in 2016 "can be compared to an industry rebirth," where movie bubbles are squeezed out and unqualified productions are weeded out, Zhang Hongsen, head of the Film Bureau of the State Administration of Press, Publication, Radio, Film and Television, said at the movie festival.
Besides, "it provides the filmmakers with an opportunity to refocus on the nature and true value of film, that is, how to tell a good story," Huang said.
He also called on filmmakers to apply "the spirit of craftsman" into movie production.
"For filmmakers, it's the worst of times, but it's also the best of times."
