Fast and furious? China's stalling box office points to consumer slowdown
By Adam Jourdan
SHANGHAI (Reuters) - China's cinemas are showing signs of weakness, a concern for policymakers who had looked to stellar box office receipts over the last half-decade as a sign consumers were picking up some of the slack from ailing exports and manufacturing.
Ticket sales dropped 10 percent in the second quarter of the year versus 2015, the first dip in around five years and a far cry from stellar growth at the start of the year. July sales slumped further, data from box office tracker EntGroup showed.
Stalling sales suggest belt-tightening by China's consumers is hitting even small luxuries and everyday discretionary spending, a concern for the Hollywood producers wooing China and for Beijing as it struggles to stoke domestic demand.
"Cinema tickets are expensive and now there are lots more places to find movies, so everyone is choosing to stay at home and watch films online," said Zhang Fuling, 25, a service worker at a state-owned firm in Shanghai.
Zhang is not alone: visits to cinemas fell 15 percent in July, after growing more than 50 percent last year and at the start of 2016. Average ticket prices have also dropped to the lowest level in more than five years.
Some analysts point to a recent crackdown on producers subsidizing or buying up unsold tickets to inflate box office sales as also weighing on the sector, though similar campaigns failed to dent growth in 2014 or 2015.
With China's official data viewed with scepticism by some economists, any indicators that may offer a snapshot of the state of the real economy are eagerly watched.
Increasing domestic consumption is key to Beijing's efforts to rebalance the world's second biggest economy away from its long-running reliance on trade and government spending. Continued...