Non-box office revenue is the new growth point for cinema chains in China. It is not uncommon for some cinemas to turn profitable in a sluggish market on the back of non-box office revenue.
Chen Shaofeng, head of the Fenghuo Cultural Research Center at Peking University, said: " Among all categories of non-box office revenue streams, film-related derivatives are likely to generate long-term profit."
"On-screen appeals, accessories, conventional toys, and plush toys are important revenue sources as they can be sold even after a film's theater release. China is still at a very early stage in the business. Most Chinese cinemas are still betting heavily on ads aside from box-office receipts.
"But take a look at the world's leading film studios. Sales of film-related derivatives can contribute up to 70 percent of their annual revenue."
Chen said Disney's revenue from studio entertainment, including box-office sales, was only $9.99 billion in 2018, accounting for only about 17 percent of its total $59.43 billion revenue.
Instead, Disney earned a large part of its business from media networks, parks and resorts, and consumer products. Among those, revenue of consumer products and interactive media was $4.65 billion, and parks and resorts netted $20.3 billion in 2018.
"Film-related derivatives' development is on the rise in China with the success of animation hit Monkey King: Hero is Back and Ne Zha. It is also a good thing that Chinese audiences have increasing awareness of intellectual property of film-related derivatives," Chen said.
Source: China Daily
