What is the future for post-discount era domestic films?

BEIJING - Since 2014, when online cinema ticket sales exploded, Chinese moviegoers have been a bit spoilt, with websites offering tickets for as little as 9.90 yuan ($1.48), a fraction of the face value.

Audience buy ticket at low price, so companies must dip into their own coffers to foot the rest of the bill.

From this year, however, these offers are becoming few and ticket price stands at about 35 yuan.

China's box office revenue hit 12.429 billion yuan from June to August, nearly the same as last year's 12.431 billion yuan for the same period, according to the film fund office of the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT).

However, of that total revenue, domestic films earned 4.7 billion yuan in the first half of 2016, 3.2 billion yuan less than that in the same period last year.

Bubble in ticket sales

It will come as no surprise that e-commerce companies want to stake their share in the booming film industry.

"Alibaba and Tencent invested huge sums of money to offer discounted tickets just to encourage people to book tickets online," said Zhang Wenyue, an employee of dianping.com, China's major online consumer guide.

Film producers also got in on the act. Despite the huge outlays associated with offering discounts, their motivation was often financial -- larger audience numbers would result in more exposure, resulting in more investment for the next project, or higher box office takings, which would affect the price of listed companies.

Figures from Analysys, a data analysis company, show that box office takings for 2015 on the mainland reached 44 billion yuan, with nearly 5 billion yuan of that earned from ticket discounts.

Although movie ticket prices vary from state-to-state in the US, a two dollar ticket is a rarity.

"In New York, the ticket price is about 15 dollars for adults," said Chen Fengqi, a US-based film and media postgraduate student.

Not for the long run

On July 22, Alibaba Pictures warned that it looked set to lose 400 million yuan in the first half of 2016, almost three times more than the same period last year, mainly because of ticket discounts.

"It is a great cost for Internet companies to offer discounts. It is impossible to continue this way," said Huang Guofeng with Analysys.

Another reason for dropping box office sales for domestic films is their quality. Moviegoers are reluctant to pay bills for tired, boring tropes.

In August this year, six out of 13 domestic movies were romances. The audience want more.

Developing film

Chinafilm.org and the China Film Producers' Association have issued a guideline on film ticket marketing and sales, which made it clear that the price of a ticket should not be lower than its agreed value. Effectively drawing a line under the practice of discounted tickets.

Although the phasing out of discounts will impact box office sales in the short term, it offers a rare opportunity for change. Production houses will now have the opportunity -- not to mention the funds -- to explore different approaches to storytelling, and support rising talent.

"The outlook is not dim this year, but it was overheated last year," said Peter Chan, a Hong Kong-based director.

He said that film market should be rational in the post-discount era, and focus on high-quality, rich content.

Tong Gang, deputy head of SAPPRFT, said that films are soft power that can help promote and develop culture and, currently, discounted tickets overshadow this.

The government must strengthen supervision and encourage better-quality filmmaking, Tong said.