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The film market continues to recover. In the first half of 2024, the domestic New Year's Day, Spring Festival, and May Day box office data have all returned to the 2019 level. In June, the national movie box office declined both year-on-year and month-on-month, but this was mainly affected by the lack of high-quality film supply and the temporary suspension of the increase in average ticket prices. With the increase in the supply of high-quality films, the industry may continue the recovery trend in the first half of the year.

By Hu Nan

The Chinese film market has recovered rapidly. According to Maoyan Professional Edition data, in 2023, the total box office of the Chinese mainland film market was 54.927 billion yuan, a year-on-year increase of 83.48%. Its value has not yet recovered to the level of 2018 and 2019, but it is almost the same as the total box office of the film market in 2017.

The number of moviegoers and screenings have also recovered. The total number of moviegoers in the film market was 1.298 billion, an increase of 82.56% year-on-year, and the number of screenings was 131 million, an increase of 28.08% year-on-year. As the first year after the epidemic, it set the highest level of terminal screenings in film history. In addition, the popularity of domestic films has also increased significantly. According to Maoyan Professional Edition data, in 2023, the top ten movies at the box office were all domestic films, with a total box office of approximately 26.642 billion yuan, accounting for 48.50% of the total box office of the national film market that year.

Entering 2024, the Chinese film market continued to recover, and the box office data for the New Year's Day, Spring Festival, and May Day periods have all matched or exceeded the 2019 levels. However, as the beginning of the summer season, the box office for the Dragon Boat Festival period in 2024 was only 384 million yuan, which is not only far lower than the pre-epidemic level, but is only slightly higher than 2022.

In fact, there is no need to worry too much about the weakening of the Dragon Boat Festival movie market. Judging from the data, the main reason why the Dragon Boat Festival box office was lower than expected was the lack of high-quality film supply and the temporary impact of the increase in average ticket prices. With the increase in the supply of high-quality films, the industry may continue the recovery trend in the first half of the year.

Recovery and change

According to Maoyan Professional Edition data, from January to May 2024, the total box office of the Chinese film market was 21.671 billion yuan, an increase of 6.412 billion yuan compared to 2022, but compared with 2019 and 2023, it decreased by 5.469 billion yuan and 460 million yuan respectively. Judging from the data, the recovery of the Chinese film market seems to have slowed down.

However, it should be pointed out that the characteristic of the Chinese film industry is that there is a high degree of congestion in the release of films during popular periods, while there are fewer films released during ordinary weekend periods. As a result, the box office performance of most popular periods is good, but the cumulative total box office performance is average.

According to Maoyan Professional Edition data, the total box office of the domestic film market in the New Year's Day period of 2024 was 1.536 billion yuan, an increase of 981 million yuan compared with the New Year's Day period in 2023, and exceeding the market peak of 1.271 billion yuan in 2018; the number of moviegoers also recovered to 33.3 million, exceeding the 2019 level; the average ticket price dropped from 44.00 yuan last year to 41.80 yuan, and the trend of rising ticket prices has temporarily eased. Judging from the New Year's Day data, the Chinese film market has recovered healthily.

The subsequent Spring Festival period continued the healthy recovery trend of the New Year's Day period, with a total box office of 8.051 billion yuan, an increase of 1.285 billion yuan and 2.147 billion yuan compared to 2023 and 2019 respectively; the number of moviegoers hit a new high in nearly seven years, reaching 163 million; the average ticket price was 49.10 yuan, a decrease of 3.20 yuan compared with the same period in 2023.

During the May Day holiday in 2024, the growth of the film market slowed down, but many data such as box office, number of moviegoers and average ticket price were roughly the same as in 2019.

It is worth mentioning that in the first half of 2024, the Chinese film market has frequently withdrawn its schedules. The films "Mr. Red Carpet", "Let's Shake the Sun Together", "Nothing That Can't Be Solved by a Hot Pot", "Bajie: The Heavenly King", and "Yellow Pi: The Cat God of Wealth Falls from the Sky" have successively announced their withdrawal or adjustment of their schedules. According to Maoyan Professional Edition data, the main investors and controllers of the above five films are Huanshi Media and its affiliated companies, Lianrui Pictures, Baina Qiancheng, Huanyu Xingman, and Yuankong Culture.

During the same period, the box office hits were "Hot and Spicy", "Flying Life 2", and "Article 20", and their main investors and main controllers were New Classics Media, Tingdong Pictures, and Enlight Media. Through observation, it can be seen that the main investors and main controllers or their major shareholders of "Hot and Spicy", "Flying Life 2", and "Article 20" are all listed companies with a large number of film and television resources in the industry. For example, New Classics Media itself has strong production capabilities and is backed by two big trees, China Literature Group and Tencent Holdings; although Tingdong Pictures is not listed, its actual controller is Han Han, a director who has produced many hit movies, and the company's second and third largest shareholders are Alibaba Pictures and Bona Pictures, with shareholding ratios of 13.13% and 11.25% respectively.

In contrast, the main investors and controllers of the above-mentioned five withdrawn films and their major shareholders have relatively weak film and television resources, which puts them at a disadvantage in the competition for scheduling films during popular time periods, which means that market share may be concentrated on the leading producers.

No need to be overly pessimistic

The first month of the summer season was weak. According to Maoyan Professional Edition data, in June 2024, the total box office of the national film market was 2.23 billion yuan, a year-on-year decrease of -46.04%, and a decrease of 46.73% compared with the box office in June 2019. Among them, the total box office of the Dragon Boat Festival movie market was only 384 million yuan, a year-on-year decrease of -57.89%, and a decrease of 51.14% compared with the Dragon Boat Festival box office in 2019.

In terms of demand, many data do not seem optimistic. According to the data from Lighthouse Professional Edition, in June 2024, there were 11.8755 million screenings nationwide, up 6.38% year-on-year and down 3.17% month-on-month. The number of screenings hit a new high, but the average attendance was only 3.6%, down 43.75% year-on-year and 26.53% month-on-month. The number of moviegoers also fell 50.57% year-on-year to 43 million.

Judging from the data, the weakening box office in June is the main reason for the slowdown in the recovery of the film market in the first half of 2024.

It should be pointed out that although June is an important part of the summer season, according to historical data, the proportion of June box office in the total summer season box office is not high. According to Maoyan Professional Edition data, in 2019 and 2023, the national film market box office in June was 4.186 billion yuan and 4.133 billion yuan respectively. During the same period, the total summer season box office was 17.779 billion yuan and 20.572 billion yuan respectively. Through calculation, it can be known that the June film market box office accounted for 23.54% and 20.09% of the summer season box office respectively.

In addition, from the content perspective, the main reason for the downturn in the national film market in June was the lack of high-quality film supply. According to Maoyan Professional Edition data, there were 9 movies with box office revenue of over 100 million yuan in June. Among them, only one movie, "There is a Small Shop at the Edge of the Cloud", had a box office revenue of over 200 million yuan during the period.

In June 2023, there were only nine movies with a box office of more than 100 million yuan, but four movies with a box office of more than 200 million yuan. Among them, the box office of "Gone Girl" in June was 1.702 billion yuan, the box office of "Transformers: Rise of the Power Warriors" was 595 million yuan, the box office of "Spider-Man: Into the Universe" was 340 million yuan, and the box office of "I Love You!" was 268 million yuan.

Therefore, in the remaining two months of the summer season, if the quantity and quality of film supply can be improved, the summer season box office may still continue the recovery trend in the first half of 2024.

According to Maoyan Professional Edition, as of now, many key films are scheduled to be released during the summer vacation, including "A Quiet Place 3", "The Quiet Place", "The Umbrella Girls", "Successor Plan", "The Decoded", "White Snake: Floating Life", "Rebirth", "The Wrong Size", "Legend", etc.

It is worth mentioning that the movie "There is a Small Shop at the Edge of the Cloud" continues to make efforts. As of now, its cumulative box office has reached 492 million yuan; the reputation of the movie "The Silent Killer" has continued to ferment since its release. According to Lighthouse data, "The Silent Killer" had a box office of 376 million yuan in the first week after its release on July 3, and exceeded 900 million yuan on July 15. Moreover, Maoyan Professional Edition predicts that its total box office will be 1.591 billion yuan.

The movie "Catching Dolls" starring Shen Teng and Ma Li was also released on July 16. Maoyan Professional Edition predicts that its total box office will reach 3.773 billion yuan.

Public information shows that the main investor and controller of "Catching Dolls" is Xihong City Film and Television. Although the company is not a listed company with abundant resources, the producers of "Catching Dolls" also include Wanda Film, Maoyan Entertainment, Shanghai Ruyi and Alibaba Pictures. These companies have rich publicity, marketing and cinema resources. Therefore, "Catching Dolls" has the potential to become a dark horse in the summer season.

In addition, director Wuershan's blockbuster IP-adaptation masterpiece "Under the Alien" is scheduled to be released on July 26, and the movie "Decoded" directed by Chen Sicheng and starring Liu Haoran, Daniel Wu, and Chen Daoming is also scheduled to be released on August 3.

According to Maoyan Professional Edition, the main investor and controller of "Under the Alien" is China Literature Group, which has strong production capabilities. From 2020 to the present, it has participated in the investment and production of many blockbuster movies such as "Hello, Li Huanying", "Hot as Hell", and "The Killer Is Not Cool".

Although the producer of the movie "Decoded" is not as glamorous as "Under the Alien", the director Chen Sicheng has directed, produced, and participated in the production of many hit movies, including the "Detective Chinatown" series, "The Accidental Detective" series, and "She's Gone". Among them, the box office of the "Detective Chinatown" series was 8.743 billion yuan, the total box office of the "Accounting" series was 2.454 billion yuan, and the box office of "She's Gone" was 3.523 billion yuan, which provides a guarantee for the quality of "Decoded".

From this, it can be seen that in the remaining two months of the summer season, there will be a sufficient supply of high-quality films, and the weakness of the film market in the first month of the summer season will be improved.

This article was published in the July 20 issue of Securities Market Weekly.