Box office takings in the world’s second-largest film market fell for the first time in half a decade, official figures released this week show.
The country’s box office dropped 4.6 percent in the second quarter of 2016, according to statistics from the National Film Development Funds Management Committee.
Total domestic box office takings between July 1 and Monday, July 25, amounted to RMB 3.76 billion, a drop of 18.6 percent from RMB 4.6 billion sales in the same period last year, according to Chinese box office site maoyan.com.
The official figures line up with data released by Beijing-based Ent Group last week that showed the market contracting nearly five percent in the second quarter.
The sudden slowdown follows a period of break-neck growth last year in which the country’s box office expanded 49 percent.
That rapid growth had many analysts predicting China would surpass North America as the world’s largest theatrical market by the end of 2017.
The drop, from a record 44 billion yuan ($6.6 billion) for the same period last year, is being blamed on a reduction in ticket subsidies made by film producers.
"After the subsidy decreases, the audience will not buy as many tickets as they did before,” Wang Changtian, chairman of Enlight Media told state news outlet, China Daily.
"This will show their real consuming capacity. In fact, the ticket price may be a little bit higher for them,” he said.
The practice, whereby moviegoers buy tickets at a discount and producers subsidize the remainder of the full price, has come under closer scrutiny after a series of scandals.
Domestic blockbusters such as Lost in Hong Kong, Monster Hunt, and Ip Man 3 were among a number of domestic movies suspected of inflating box office figures.
In an unprecedented move in March, Chinese regulators took legal action against distributor Dayinmu Film for their involvement in the manipulation of ticket sales for the movie Ip Man 3.