Automatic ticket vending machines in a cinema. (Photo: VCG)
China’s movie market saw another year of fast expansion in 2018 and many believe it is on track to become a global powerhouse with the potential to transform the world entertainment landscape. However, Jane Shao, founder and president of Lumière Pavilions, a premium movie theater chain in China, said that, aside from its explosive growth, China’s film industry still has quite a few challenges lying ahead, especially the woes of small-sized cinemas.
First of all, Shao agrees that China's film industry has made big strides in box office revenue. She pointed out that in terms of screen numbers, China is the largest movie market in the world, with more than 50,000 screens. That's compared to 42,000 screens in the US China grossed 60 billion yuan, or $8.7 billion in box office revenue in 2018, while the US recorded a total of 10 billion dollars in ticket sales.
Shao also shared her thoughts on how China's movie business is coping with the current market and what kind of role the government can play to help the whole industry grow healthier.
"A lot of small cinemas are lying about their ticket sales numbers. And they are punished by the government as a result. The number of cinemas in China is expected to climb to around 10,000 at the end of this year. But only 30 to 40 percent of them are able to bring five million U.S. dollars in ticket revenue. Cinemas that cannot make this amount of income are losing money. However, they are still around. Their doors remain open. That can only mean one thing – they are faking their box office numbers," Shao said.
Shao also pointed out that the Chinese government is trying to save those small movie theaters from digging deeper holes financially for themselves by pushing for consolidation. The move could lead to many small-sized cinemas going out of business.
There are too many movie theaters in China now and the number of screens a theater has on average is four to five, Shao added. That's not enough if seven or eight new films come out in the same period. Those small movie theaters cannot survive off this. The money they earn cannot even cover the basic needs of their daily operations.