The film industry, once vibrant and crowded with eager moviegoers, is currently grappling with significant challengesWhile there are occasional hits, the overall performance of the movie market has been rather underwhelmingAttendance levels have dropped considerably, leaving cinemas in a precarious position as they rely heavily on ticket sales for revenueThe decline is concerning, and it urges cinemas to rethink their strategies in order to adapt and thrive.

At the recent Shanghai International Film Forum and Exhibition, cinema professionals from across the country gathered to exchange ideas and insightsA common theme emerged from these discussions: the need for cinemas to diversify their operationsMany industry insiders agree that reliance solely on film screenings is no longer a sustainable practiceAs the landscape shifts, the importance of creating additional revenue streams has become all the more crucial.

Heavy economic pressures are evident, especially with the recent release of a highly disappointing box-office performance during the Dragon Boat Festival, which yielded only 380 million yuan—marking the worst results in a decade, aside from the pandemic-impacted year of 2022. According to Deng Yonghong, Vice President and Secretary-General of the Urban Cinema Branch of the China Film Distribution and Projection Association, the data confirms a downward trend in both the total number of moviegoers and their frequency of visits.

In light of these developments, cinema operators have been forced to innovate if they wish to keep their doors open

This transition towards a diversified business model is not merely optional; it has become a necessityIndustry leaders, such as Wang Yan, General Manager of Sichuan Pacific Film Management Company, emphasize that the consensus now is clear: cinemas must pursue varied revenue sources and cannot rely exclusively on film box office returns.

Several key strategies for achieving this diversification were discussed among professionalsFor one, it is essential to liberate conventional thinking about the cinema experienceHuang Bin, Deputy General Manager of Happy Blue Ocean Film Culture Group, entertained the notion that cinema has historically adapted over timeThe way films were once screened in cafes or community halls demonstrates the evolutionary nature of cinematic experiencesIt suggests that cinemas too must evolve, ultimately appealing to a broader audience.

To thrive in a challenging market, it is crucial for cinemas to reduce their dependence on only blockbuster films

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Huang points out the potential for cinemas to generate revenues even when the overall box office is underperformingThe goal is to create a venue that offers various experiences beyond just watching movies—an environment that entices visitors to explore other activities, enhancing their overall experience.

With the physical space of cinemas as their unique advantage, operators have started to explore the concept of spatial entrepreneurshipThis involves reimagining cinemas as community entertainment spaces that can accommodate various forms of contentChen Hua, General Manager of Wanying Film Industry in Shenzhen, noted that many cinemas have downsized their screening rooms from 7-10 to only 5-6 in response to sluggish ticket salesHowever, it does not have to signify an endInstead, it can represent a transformation toward inclusivity by establishing operations that add more value.

Operating and programming strategies also play a crucial role in this diversification of cinema functions

Su Jia, Vice President of Huaren Culture Group, emphasized the willingness to host a variety of events, including concerts, esports competitions, and sports broadcasts, which not only enhance engagement but also create new revenue opportunitiesA notable case is when cinemas began to cross-promote live performances, such as stand-up comedy shows, tapping into a younger, more dynamic audience.

In cities like Beijing, a burgeoning scene of live performances in cinema settings is gaining tractionCollaboration between cinema operators and production companies can materialize in different formats—whether it be a flat rental fee or revenue-sharing arrangements, providing a steady stream of supplemental income.

At Happy Blue Ocean, partnerships have allowed the hosting of over 100 concerts in a single year, demonstrating a successful blend of genres that keep audiences coming back

Similarly, integrating theatrical performances into cinematic spaces, particularly children's theater, has proven to be lucrativeThe audience demand for family-oriented content has surpassed expectations, driving ticket sales and boosting overall profitability.

Nevertheless, the multi-faceted operation model presents its own challenges, calling for innovative tactics to sustain cost efficiencyChen mentioned instances where his team capitalized on special occasions by organizing immersive experiences rather than sticking rigidly to single showings of a filmFor instance, a car brand hosted a Women's Day event that combined a movie screening with a series of engaging activities, resulting in elevated profit margins that exceeded projections.

Notably, some cinemas are taking audacious steps, like introducing hotpot dining experiences within their facilitiesHan Chunhui, General Manager of Beijing Juhe Movie Culture Development Company, explained that the integration of dining into cinema viewing not only enhanced customer experience but also opened avenues for increased sales