Jack Gao, a top veteran film business executive, told China.org.cn that at present, China still must find ways to attract more people to cinemas, which is the key to film business recovery.

"I always emphasize that cinema admissions should be adopted as an important indicator of how the film business is doing," Gao said. 

In 2022, China's box office revenue was about 30 billion yuan ($4.35 billion), with 85% coming from domestic films, according to statistics released by the China Film Administration on Jan. 1. This fell well below the previous year's 47 billion yuan, and the market still lacks enough content to recover and grow.

"The figure of 30 billion yuan is hard-earned, especially due to repeated blows by waves of COVID-19. But what's more startling is the admissions. In 2022, total annual cinema admissions were 710 million, which was about 1 billion admissions less than what we had in 2019 (1.73 billion admissions). We lost 1 billion visits to cinemas – that's the problem," he explained.

For example, by the end of last year, the recent blockbuster "Avatar: The Way of Water" had more than 7.74 million admissions in South Korea, while it had 21.58 million admissions in China. 

"I knew the peaking outbreaks of the pandemic had an impact, but our Asian neighbor South Korea has a total population of only 52 million, meaning that 14.8% of their people went to the cinema to see 'Avatar 2,'" Gao said. "But we have more than 1.4 billion people. Therefore, the number of admissions meant that only 1.4% of Chinese people went to this film."

"This is more important than box office revenue because box office numbers can still look good due to inflation, different ticket prices, and some price hikes. But losing the actual visits and admissions, this is something to be urgently paid attention to and addressed," Gao continued. He then pointed out that despite China having more than 10,000 cinemas and the world's most 3D screens, its great cinema infrastructure only attracted around 1% of the total population to experience "Avatar: The Way of Water," allegedly the best 3D feature film in the world, at cinemas.

"Even taking our highest-grossing film, 'The Battle at Lake Changjin,' for example, it actually had 125 million admissions, a stunning figure. However, it also indicated that less than 10% of China's total population went to the cinema to see it. On a positive note, we can still work to get the other 90% of Chinese people to go to cinemas."

Gao, CEO of Smart Cinema and a former senior executive at Microsoft, News Corporation, and China's Wanda, has a special connection, experience, and emotional resonance with the "Avatar" franchise by James Cameron. In 2010, he was working for News Corporation, which once owned 20th Century Fox, the studio that made the original "Avatar." He helped the film get imported and released in China at that time, watching as it promoted the development of the Chinese film industry, especially in the building of 3D and IMAX theaters.

While the release of "Avatar: The Way of Water," which had grossed more than 1.3 billion yuan in China and more than $1.7 billion worldwide by Sunday, has once again helped China's cold film market to gain momentum, it was not the savior of Chinese cinemas that executives were hoping for. Gao added that while the pandemic situation was the main reason to blame, with more cinemas nationwide trying to resume business in time for the film's release, the film's sudden release and a very short promotional period had also impacted the film's profits in China. In addition, high ticket prices and some audiences' disappointment in the plot all added up and muted its success. 

"It may not be as big of a jaw-dropping and ground-breaking spectacle as the first film, but 'Avatar: The Way of Water' is still epic and something unprecedented in terms of filmmaking. If you are someone working in the film business, you know what I mean, and you should not mock it."

China's film market is now resuming, with more than 10,400 cinemas having opened their doors by Monday, accounting for 82.7% of all cinemas nationwide. However, before seven blockbusters, including the epic sci-fi sequel "The Wandering Earth 2" and Zhang Yimou's historical period film "Full River Red," open at Spring Festival (Jan. 22 this year), the three weeks from Jan. 1-21 will be defined by having no new releases.

The executive believed Chinese people are now entering a new era and stage to pursue spiritual satisfaction more than material happiness, and movies are a very important vehicle to bring such joy and reflection.

"Like 'Dying to Survive,' which was able to help reform China's medicine sector, this is what the art of film can do," Gao said. "No short video app or pure entertainment content can do this. China suffered from the pandemic, but most of its people also don't have the habit of going to the cinema frequently. If we want to build our movie business' national strength, we need to grow our audiences. If there are not enough people in cinemas, we shall never see the recovery."

China's movie tickets have become more expensive, going from 37 yuan, the average ticket price in 2020, to 42.1 yuan in 2022. Meanwhile, the average theater attendance rate declined year by year due to various factors, dropping from 8.1% to 5.8%. The high ticket prices for "Avatar: The Way of Water" and other Chinese blockbusters, especially during big holidays like Spring Festival, as well as the fact that there is still a lot of low-quality, similar, and repeated productions in the market, have triggered rounds of heated discussions and backlash online.

"The audience has only one standard: whether a film is good or not. We need more good content too, as bad content will drive audiences away. If this situation lasts, the audience will lose their patience and will not come back often. At that time, it will be very difficult and costly to invite audiences back to cinemas," Gao explained.

Solutions could be innovative and bold. Gao mentioned his Smart Cinema as a supplement, which provides a flexible film-watching model on mobile phones but still sells tickets online rather than other paid streaming service packages. He also talked of his previously proposed "super cinema" idea, which called for adding a layer of online streaming services to theaters and using mobile technologies to empower physical theaters. This way, "[Audiences] can watch a film first, then pay if they liked it. Cinemas can also provide membership services to allow such mechanisms while also making rules to prevent freeloaders. Artificial intelligence can now easily assist cinemas and analyze big data from audience behaviors. Such mechanisms can increase audience numbers further."

"I remember once going to watch a movie in an empty theater. There was one other girl, who asked the cinema staff if she could join me despite having a ticket for a later showing. The cinema staff allowed her to. We have such good infrastructure for movies; whether it's one person watching a film or 50 people watching a film, the marginal cost is zero. How can we let cinemas be empty like this?"

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