China Regulators Urge Cinemas to Diversify Income Beyond Box Office

The National Film Administration and the State Administration for Market Regulation recently issued a joint notice on promoting diversified operations and enriching the cultural development of cinemas. The notice calls for new demand to lead new supply, and new supply to create new demand, advancing innovation in cinema business models, formats, and services. It requires cinemas to reduce their reliance on ticket sales as a single source of revenue and adapt to evolving audience expectations through diversified operations. For a long time, box office revenue has been the primary pillar of cinema operations. The supply of quality films and the heat of release schedules directly affect attendance and financial performance; the more a cinema depends on box office receipts, the more vulnerable it becomes to fluctuations in the seasonal calendar. Meanwhile, relying solely on traditional screening services can no longer fully meet the new demands of audiences. For many viewers, going to the cinema is not just an audiovisual experience but also a cultural leisure activity. Since the same film often plays at multiple venues simultaneously, audiences compare not only showtimes and ticket prices but also the waiting environment, screening atmosphere, and quality of service. Cinemas possess physical space and visitor traffic, providing a basis for expanding their offerings. Promoting diversified operations allows them to make fuller use of existing premises and audience flow while safeguarding their core business. As new business formats are introduced, spatial utilisation and crowd management become more complex, requiring optimised layouts and processes for ticketing, waiting, and exiting to reduce queues, congestion, and disruption. Diversified operations also relate to the role of cinemas in stimulating urban consumption. Many cinemas are located in commercial complexes, distinctive streets, or cultural tourism destinations, already within areas of concentrated consumer activity. Cinemas and surrounding businesses each have their own focus; through joint events and linked membership benefits, they can complement each other's services and enrich consumer choices. Audience traffic can drive nearby spending, while well-developed commercial amenities also help cinemas attract more visitors. Diversified operations must be pursued without deviating from the core business. A cinema is, above all, a place for film viewing; projection quality, orderly screening, and basic services are its foundation. Expanding into new formats must not undermine the film-watching experience or cross operational limits. Different cinemas vary in location, audience profile, and management capability, so each should identify its own positioning based on its conditions and develop distinctive features within a framework of compliant operations.