Summary of Key Points:
The box office revenue during the summer season of 2026 has rebounded (exceeding 8.5 billion yuan, with daily revenues exceeding 100 million yuan for 30 consecutive days), but cinemas are accelerating their efforts to diversify their income sources beyond ticket sales (by selling merchandise, providing dining services, and reusing their facilities). The reason behind this is the inherent profit ceiling of the traditional box office model: after sharing the profits, cinemas receive a small portion due to high fixed costs, expired seats, and reliance on uncontrollable film content. While non-ticket revenue has higher margins, it requires cinemas to acquire new capabilities (such as supply chain management and operational skills). In the future, cinema competition will shift from focusing on box office performance to emphasizing comprehensive operations, with metrics such as customer spending per visit, space utilization efficiency, and member loyalty rates playing a crucial role.
Detailed Analysis:
1. Why Do Cinemas Seek Additional Revenue Sources Despite Rebounding Box Office Sales?**
Many assume that higher box office revenue means greater profits for cinemas. However, this is not always the case. Take a $100 movie ticket as an example: 5% goes to the national film fund and 3.3% to taxes, leaving $91.70. Of this amount, the film producer takes at least 43% ($39.40), with cinemas and theater chains dividing the remaining 57% ($52.30) between them. Even after these deductions, the actual profit for the cinema is significantly reduced.
The cost structure is even more challenging: rent for the venue, purchasing projection equipment, and renovation expenses are all fixed costs that must be paid regardless of whether the theater is full or not. For instance, in 2025, depreciation and amortization alone accounted for 25.5% of Jin Yi Cinema's revenue, with labor and utilities accounting for another significant portion. Although a rebound in box office sales can increase income, the profit margin remains low after deducting these costs.
There are two additional major limitations: expired seats (which become useless once the movie starts) and the unpredictability of popular films. Therefore, even with increased box office revenue, the traditional model's profit potential is limited, necessitating exploration of other revenue streams.
2. How Are Cinemas Generating Non-Ticket Revenue?
Cinemas have realized that the value of a movie ticket goes beyond the share of profits; it also provides an opportunity to attract audiences to the physical theater space. They are exploring four main areas for non-ticket revenue generation:
- Upgraded Merchandise Sales: The profit margin on items like popcorn and cola is already high (Jin Yi Cinema reported 71.6% in 2025), and now they have expanded into selling official merchandise, trendy collectibles, and licensed food products. Fans are more willing to spend money on items related to their favorite movies.
- Extended Visitor Stay: By introducing gaming and XR experiences, cinemas can increase visitors' stay time by 40 minutes to an hour, allowing them to purchase more goods or participate in activities. In some cases, non-ticket revenue accounts for up to 30% of total income at certain cinemas.
- Facility Reuse: Unused theaters or lobbies can be utilized for events such as esports competitions, family activities, VR experiences, or corporate bookings. Some cinemas even cancel movie screenings during lunch hours to host small performances.
- Customer Relationship Management: By establishing membership programs and organizing themed events, cinemas can better understand their customer base and engage with them, especially when there are no major films on screen.
3. The Challenges of Generating Non-Ticket Revenue**
Although non-ticket revenue offers higher margins, it requires cinemas to acquire new skills and overcome several challenges:
- Cross-Cultural Skills: Selling food and merchandise involves managing food safety, supply chains, and inventory management. Licensing and selecting products, as well as managing inventory turnover, are also essential.
- New Cost Challenges: Selling licensed merchandise requires paying royalties to copyright holders, and expanding retail operations increases rental costs. If events rely on third-party platforms, there are additional fees. Moreover, when popular IPs lose their appeal, excess merchandise can become inventory that ties up cash.
- Scale Barriers: Large chain cinemas have advantages (such as bulk purchasing, shared membership benefits, and easier access to IP partnerships), while smaller cinemas face difficulties in replicating these strategies. For example, Wanda plans to open 300 new beverage stores, which is unattainable for smaller venues.
4. What Will Define Future Cinema Competitiveness?
The future of cinema competition will focus on the ability to "manage time and space effectively":
- Customer Value: How much can each visitor spend within the theater (e.g., on merchandise or drinks)?
- Space Efficiency: How efficiently can the theater's facilities be utilized (lobbies, theaters)?
- Time Slot Utilization: Can non-box office activities generate revenue during off-peak hours (such as lunchtime or weekdays)?
- Customer Loyalty: Can cinemas retain customers through membership programs and direct communication with them?
Policies are also encouraging cinemas to adopt tailored approaches: central business district cinemas can engage in retail and advertising, community cinemas can focus on family events and corporate bookings, and art cinemas can organize special events for movie enthusiasts. A one-size-fits-all approach will no longer be effective.
In summary, cinemas are evolving from mere film projection venues into comprehensive entertainment complexes that generate revenue through various services and space utilization. The key to success will be the ability to effectively manage time and space to provide a valuable experience for visitors.
In One Sentence:
Cinemas are transforming from places that simply show movies to integrated entertainment platforms that attract and retain audiences, with profitability stemming from the services and experiences offered beyond ticket sales.