China's holiday box office plunges by 23% as theaters push prices to record highs
- The seven-day Lunar New Year holiday that ended Sunday is typically the biggest week of the year for new movie releases in China, the largest box office in the world.
- However, the total holiday box office dropped by 23% versus last year, while ticket prices rose by 8%, according to online ticketing site Maoyan.
- The box office slump comes amid sluggish consumer spending in China and increasing policy support for domestic films over foreign-made ones.
BEIJING — Chinese consumer spending on movies plunged during the Lunar New Year holiday last week as theaters raised prices to record highs.
The seven-day holiday that ended Sunday is typically the biggest week of the year for new movie releases in China, the largest box office in the world. Eight Chinese-made films debuted this year.
However, the total holiday box office of 6.04 billion yuan ($951.1 million) marked a drop of 23% compared to 7.84 billion yuan for the same period in 2021, according to online ticketing site Maoyan.
Tickets were on average 8% more expensive this year versus last year, the data showed. The average price per ticket on one day during the holiday reached 56 yuan ($8.80), the highest on record going back to 2017.
"A lot of consumers were complaining [it was] unaffordable for the entire family to see [a] movie," said Gao Huan, Beijing-based managing director at consulting firm Alvarez & Marsal. "Moviegoers, especially those who have a lower willingness to pay, actually decided to stay at home instead of going to the cinema."
Covid-related travel restrictions and neighborhood lockdowns have weighed on Chinese consumer spending over the last two years.
Overall tourism consumption during the holiday was 3.9% lower than in 2021 — at 289.12 billion yuan, according to the Ministry of Culture and Tourism. That's well below pre-pandemic levels, and about 56.3% of tourism consumption in 2019, data showed.
Ting Lu, chief China economist at Nomura, pointed out that this year's drop in the holiday box office comes off a high base in 2021, when the Lunar New Year coincided with Valentine's Day.
Covid-related restrictions and generally weak consumer demand made it even more difficult for ticket sales to remain so high, he said in a note. "Anecdotal evidence shows that cinemas may have intentionally raised ticket prices in anticipation of much softer sales than last year, in order to compensate for the expected loss in profits."
Alongside a global rise in inflation, prices for consumer goods in China have edged higher. But a roughly 1% year-on-year increase in consumer prices last year is far below the 8% climb in movie ticket prices.
This year's Lunar New Year box office of about 6 billion yuan was a touch higher than the 5.9 billion yuan recorded for 2019, the data showed. Theaters were essentially shut during the holiday in 2020 as seven films delayed their releases due to the coronavirus pandemic.
China-made films dominate
Two years into the pandemic, China's movie theaters have had to deal with intermittent lockdown measures, as well as changes in the availability of films.
Chinese-made movies have grown their share of the local market, thanks to government policies that restrict the distribution of foreign-made films while supporting homegrown titles. The gap widened during the pandemic with the share of foreign-made films falling to about 16% since 2020, down from well over a third in years prior, according to official Chinese data.
The increasing share of locally produced content may negatively affect China's overall box office, Gao said. "The cinemas are having much bigger pressure to break even," she said, noting that means they need to look for other income sources or raise ticket prices.
The top-grossing film during last week's holiday was the newly released "Watergate Bridge," a sequel to last year's high-grossing film about Chinese soldiers fighting American troops during the Korean War.
Another new release, a Chinese comedy called "Too Cool to Kill," ranked second by gross box office, according to Maoyan data.
Foreign films that made it to Chinese theaters last year included "Fast and Furious 9" — which ranked fifth nationwide by box office — as well as "Dune" and James Bond movie "No Time to Die." But no Marvel superhero film has come to China since 2019.
The China Film Administration announced in November it aims for domestic films to take at least 55% of the local annual box office, and about 50 Chinese-made films to gross at least 100 million yuan a year.
— CNBC's Sarah Whitten contributed to this report.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of "F9" and owns Rotten Tomatoes.