China's box-office boom, which has seen theatrical revenue rise by 20 percent a year, has been accompanied by a jump in people using online systems and cellphones to buy their movie tickets.
Anything that makes it easier for Chinese audiences to get tickets to go to the movies is good news for Hollywood studios trying to break into the world's second-biggest film market. According to statistics from research group Entgroup, the number of people paying for movie tickets online rose 42.9 percent in the past year, while the number of those who pay with their cellphones increased by 109 percent.
Last year, total box office was $3.54 billion (21.7 billion yuan), and 16.7 percent of purchases were made through online services, for a Chinese record of $590 million (3.64 billion yuan), the research firm found.
David Lim, CEO of Beijing Weiying Technology, part of Tencent's WeChat instant messaging service, told The Hollywood Reporter that his company began operating eight months ago and has sold four million tickets so far. "Within eight months, we have increased our business twenty-fold," says Lim, speaking in his company's offices in a tech park in Beijing.
WeChat now has more than 600 million registered users, of which 438 million are active users. Beijing Weiying sells tickets to 3,000 cities.
"WeChat is the biggest online social media community. We are primarily a ticket-selling platform, and merchandising platform, like Fandango. We are also developing a vertical movie business, selling ticket merchandising and ancillary products," Lim said.
The average ticket in China costs around $6.50, but the opening-night prices for tickets for a Transformers- or a Godzilla -style tentpole is around $26.
"We charge commissions to the cinemas. We also help with promotions, and we get paid by the movie companies. Plus we are also investing in movies," Lim added.
"In China, the entertainment industry has been growing very rapidly. If you look back 10 or 20 years, there was very little consumption by people of culture or entertainment," he added. "For those traditional businesses, they are not ready for such great opportunities. But the Internet companies take the chance and have grown very rapidly, as fast or faster than their U.S. counterparts. We have a huge population and it's more efficient for us to do business here."
Fu Yalong, a research manager at Entgroup, told a recent culture and entertainment summit organized by the company that most people are buying online because it's cheaper, although many like it because they can book the seats they want.
While much of the focus of developing the Chinese film market has been on big cities like Beijing, Shanghai and Guangzhou, there are over 160 cities in China with more than 1 million people
"Data shows that people living in smaller cities are contributing more to online purchasing and the total box office, especially when it comes to group purchases," said Fu.
Zeng Xing, vp of Maizuo.com, said in China these days the cellphone has become almost part of the human body. "Buying a movie ticket on your phone is becoming a habit, since a lot of buying decisions are made instantly," Zeng told the Entgroup conference. "I think Chinese audiences are very sensitive to price. Buying online is cheaper than buying in the cinema."
Two-thirds of online ticket sales were made on cellphones.
Maizuo has seen annual revenue increases of 30 percent, compared to an overall increase of 20 percent. Last year, 72 percent of purchases were made on PCs, but this year around 70 percent of movie ticket sales were on cellphones.
"One big reason is that nowadays almost everyone has a smart phone," Zeng said. "Secondly, mobile payment has been made possible by Alibaba and WeChat — making paying and buying online has been a habit for people in China. Thirdly, it is just so easy to buy a ticket with your phone, you can do it any time you want, and it only takes a few minutes."