China’s cinema boom loses its lustre as sales slump

Some of the shine has come off the silver screen in China as a 15% fall in cinema attendance in July added to an ongoing box office downturn.

The slowdown comes in the wake of more than 50% growth last year.

Ticket sales in the three months to June fell by 10%, marking the first drop in as many as five years, box office tracker EntGroup said.

Average ticket prices have also fallen to the lowest level in more than five years, reports BBC.

Box office numbers are regarded as an alternative indicator of consumer mood and economic growth in China. The downturn suggested that Chinese consumers may be feeling the pinch and thus cutting back on discretionary spending.

The tourism sector is also seen as providing a similar insight and outbound tourist numbers have been flat this year.

Matthew Hassan, senior economist at Westpac, said: ‘If you can rule out other drivers then you`d have to say it`s a sign that consumers are becoming more cautious.’

Taking at Wanda Cinema Line - China`s biggest cinema owner - rose 12.8% in the second quarter - far below the 61.4% growth in the first three months.

The world`s second-largest economy is trying to reduce reliance on manufacturing and exports and expand consumption and the services sector.

China’s growth data is thought to be manipulated to meet official targets, meaning alternative measures such as energy consumption or box office takings are also watched by economists.
Growth market

Box office takings in China had been expected to soon overtake the US, which remains the world’s biggest movie market.

Rich Gelfond, chief executive of Imax, the big screen cinema group, said in December he expected China to have more screens and higher ticket revenues than the US by 2017.

China has more than 31,627 screens, while the US total is about 39,000. The box office slowdown this year could well delay that milestone.

Chinese investors have been on a buying spree over the past years, taking stakes in a number of western cinema operators and movie companies.

Dalian Wanda - the world`s biggest cinema operator - owns both AMC Entertainment and the Carmike cinema chains in the US.

Last month AMC bought the Odeon & UCI Cinema Group, bringing it under Dalian control.

The Chinese company, led by China`s richest man Wang Jianlin, earlier this year also took over Legendary Entertainment, the US maker of blockbuster hits such as Jurassic World, the Dark Knight Batman trilogy and Godzilla.