【China】China’s film market faces challenges amid weak box office sales

China’s film market suffered a major blow with box office sales falling by 15 percent during the National Day period to 1.59 billion yuan (HK$1.84 billion), the first decline in a decade in the main holidays, according to online movie ticket seller Maoyan. This is a sharp contrast to a boom in 2015 when box office sales surged 48 percent for the year from 2014.

Beijing’s move to crackdown box office fraud, which has slashed discounts on online sales platforms, and the lack of top-grossing domestic movies this year contributed to the recent weak sales, analysts said.

China has passed the country’s first film law in November to punish the fabrication of sales and other data. Under the new rules, the maximum fine for falsify ticket sales data will be 500,000 yuan and the illegal earnings of film distributors and cinemas will also be confiscated.

Some ticket-selling machines were closed due to the decrease in the audience number.

Ticket subsidies – bubble burst in Chinese film market

China’s film industry has experienced a phenomenal growth in the past few years, fuelled partly by the deep discounts offered by online ticketing platforms. The annual ticket sales increased rapidly to 44.1 billion in 2015 from 13.1 billion in 2011, data from Maoyan showed.

Shi Chuan, the vice-chairman of Shanghai Film Association, said ticket subsidies benefited the film market by attracting more audience who wanted to pay lower price for a film.

Movie producers and distributors subsidize online ticket sellers so they can offer discount tickets to promote their films and boost box office sales numbers. However, the discounts have been curtailed following China’s new film law.

The supervision institution of China’s film market has strengthened regulation on ticket subsidies after the Chinese film distributor of Ip Man 3, a Hong Kong martial arts movie, was found making up ticket sales of the film. The distributor’s license was suspended.

Shi Chuan said that tighter rules and regulations is one of the reasons that the ticket sales number fell during the summer vacation and national holiday.

Film production quality declines

In a popular movie critic website Douban, there are 72% of Chinese films rated below 5 marks (full mark is 10) in the first eight months of 2016, indicating the quality of most of the mainland Chinese movies are below average.

There is also a trend that an increasing number of young stars participate in acting in films produced in mainland as film producers found that huge amount of fans are willing to buy tickets to see their idols in the cinema. This phenomenon propels film producers to employ more young idols with huge amount of fans in the film regardless of their immature acting skills.

Man Shu Sum, the associate director of Academy of Film in HKBU pointed out, “The audience is not foolish and their taste is changing all the time. The film producer should always adjust their strategies to meet the favor of the audience then they can make profit.”

On the other hand, the overheated capital investment in film market may change film producers’ mentality, which makes them pay less attention to the content of films causing the decline of film quality, according to Zeng Maojun, the CEO of Wanda Cinemas spoke on Shanghai International Film Festival. There are estimated 314 Chinese films being displayed in mainland China’s film theaters last year while the quantity raised to 339 Chinese films this year, gathered from mtime website.

From the statistics by WIND Info, a China’s financial information service, since 2015, a number of listed companies turned eyes on film and television industry. There were 125 mergers and acquisitions reaching 92.7 billion yuan made by China’s enterprise in the film and entertainment industry.

Man believes that a good film should evoke resonance among audience. “The whole package of film elements are equally important including actors and actresses, settings, and plots,” He said.

Reporting by Jasime Zhou, Editing by Pamela Lin

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